Hammond-Henry Hospital is navigating a period of financial pressure as operating expenses outpace revenues, with a draft audit showing a $4.87 million operating loss for fiscal year 2026. Financial statements for the first four months of fiscal year 2027 indicate continued operating losses, although hospital leadership says investments in technology, physicians, and expanded services are intended to strengthen the organization's long-term performance.
The hospital's financial position is detailed in its draft FY2026 financial audit for the year ending May 31, 2026, its unaudited financial statements for the four months ending September 30, 2026, and Tax Levy Ordinance No. 284, approved by the Henry Hospital District Board of Directors on October 20. Hammond-Henry CEO Wyatt Brieser also provided written responses to questions from the Geneseo Current concerning the hospital's operating losses, financial outlook, patient services, reserves, and capital planning.
Despite the reported losses, the hospital maintains significant cash and investment holdings. However, Brieser cautions that those resources must support ongoing operations, equipment replacement, facility improvements, and other long-term obligations.
Fiscal Year 2026: Expenses Outpace Revenue
According to Hammond-Henry's draft FY2026 audit, the hospital recorded approximately $62.11 million in operating revenue, compared with $58.16 million the previous year. Operating expenses, however, increased at a faster rate.
Before an actuarial pension-related adjustment, operating expenses totaled approximately $64.77 million, up from $58.52 million in fiscal year 2025. After including the pension adjustment, the hospital's operating loss increased from approximately $1.24 million in FY2025 to $4.87 million in FY2026.
The audit shows that operating revenue increased approximately 6.8%, while total operating expenses increased approximately 12.8%.
Brieser identified several factors contributing to the difference, including a $2.2 million actuarial adjustment associated with the Illinois Municipal Retirement Fund (IMRF).
"The draft audit includes a $2.2 million adjustment related to the IMRF actuarial outlook," Brieser explained. "This adjustment is outside the hospital's control and reflects a three month retrospective assessment of market conditions."
The draft audit identifies approximately $2.66 million in operating losses before the pension-related adjustment.
Brieser attributed much of the remaining loss to strategic investments, including transitions to EPIC for electronic health records, Multiview for financial management, and UKG for payroll systems. The hospital also recruited an orthopedic surgeon and two family practice physicians.
"These investments are intended to strengthen patient access and long-term performance, but they require time to reach financial viability," Brieser said.
Although the hospital recorded an operating loss, nonoperating revenue helped offset the financial impact. The draft audit reports approximately $2.88 million in investment income and $1.16 million in property tax revenue during FY2026.
After accounting for nonoperating activity and capital contributions, the hospital's net position declined approximately $903,000 for the year.
Operating Losses Continue Into FY2027
The hospital's unaudited financial statements for the four months ending September 30, 2026, show continued operating losses.
Hammond-Henry reported $21.74 million in operating revenue, compared with budgeted revenue of $22.50 million. Operating expenses totaled $22.35 million, slightly below the $22.56 million budget.
The resulting year-to-date operating loss was approximately $605,000, compared with a budgeted loss of approximately $56,000. After nonoperating revenue, the hospital reported an overall year-to-date deficit of approximately $12,000, compared with a budgeted surplus of $751,000.
September alone produced an operating loss of approximately $245,000.
While operating expenses were below budget on a year-to-date basis, lower-than-anticipated operating revenue contributed to the unfavorable results.
Brieser said the organization is evaluating targeted financial adjustments while maintaining patient access and supporting recently introduced services.
"Current results reflect several planned investments in physicians, equipment, and supplies," Brieser said.
Among those investments is the addition of Dr. Wakefield, who joined the hospital in September and is expanding general surgery access, particularly breast and thyroid services, with the possibility of a future wound clinic.
"These services require upfront investment and time to build sustainable volume," Brieser explained. "We are evaluating targeted adjustments to improve financial performance while protecting access, maintaining service quality, and avoiding actions that could impede the growth of strategically important programs."
Staffing Costs Remain a Challenge
Staffing continues to be a significant financial consideration for Hammond-Henry.
Brieser reported that contract labor expenses exceeded $180,000 in September, citing ongoing challenges recruiting and retaining healthcare professionals.
The hospital's September financial statement separately lists approximately $141,000 in the contract labor expense category, compared with a monthly budget of $700. The information provided does not explain the difference between that figure and the broader amount cited by Brieser.
For the first four months of FY2027, the hospital recorded approximately $454,000 in contract labor expenses, compared with a budget of $2,800.
"Nationally, there is a nursing shortage with expectations to worsen over the near future," Brieser said, referencing industry reporting on nurse turnover.
"We are deploying multiple methods to combat the shortage but will likely have some level of contract labor within the hospital until the healthcare landscape makes these professions more accessible and their long term hire more possible," he explained.
Brieser emphasized the importance of employees to the hospital's operations.
"People are the most important asset to our hospital and right now, unfortunately, that asset is limited in availability."
The hospital's year-to-date financial statements also show that salaries, employee benefits, and contract labor collectively totaled approximately $13.77 million, exceeding the budgeted amount by approximately $242,000.
Patient Volumes Show Mixed Results
Patient activity varied across hospital departments and clinics during the first four months of FY2027, according to the September financial statements.
Emergency department visits exceeded expectations, with 2,455 visits recorded compared with 2,279 budgeted. Outpatient radiology procedures and therapy treatments also exceeded projected volumes.
However, outpatient surgeries and several clinic locations experienced lower-than-anticipated activity.
The hospital recorded 480 outpatient surgeries through September, compared with 767 budgeted. Kewanee clinic visits totaled 4,635 against a budget of 5,781, while Annawan recorded 456 visits compared with 521 budgeted.
Geneseo clinic visits exceeded expectations, with 9,103 visits compared with 8,898 budgeted.
Brieser acknowledged ongoing challenges at the hospital's Kewanee and Annawan locations.
"Patient volumes at the Kewanee and Annawan clinics have declined over the past several years," he said. "Contributing factors include provider and leadership turnover, staffing challenges, and barriers associated with the electronic health record."
He said Hammond-Henry has implemented multiple strategies during the past two years to improve performance in Kewanee, including adjustments to service offerings, marketing, leadership presence, access, and staffing.
"We expect stabilization and growth to take time and will continue building community awareness of the services available," Brieser said.
Regarding outpatient surgery volumes, Brieser explained that activity can fluctuate significantly based on physician availability, particularly at smaller hospitals.
"Necessary surgeon leave can materially affect volume at a hospital of our size, which is one reason recruiting a second general surgeon was a priority," he said.
Brieser also indicated that seasonal demand could improve surgery volumes as patients schedule procedures before insurance benefits reset on January 1.
Hospital Maintains Significant Financial Reserves
Despite operating losses, Hammond-Henry continues to report substantial financial assets.
As of September 30, the hospital's unaudited financial statements listed approximately $17.62 million in cash and cash equivalents and $44 million in investments classified as assets whose use is limited.
The hospital also reported approximately $114.63 million in total assets and $33.95 million in total liabilities.
Its September financial dashboard reported approximately 348 days of cash on hand, a measure of available liquidity relative to operating expenses.
Brieser emphasized that financial reserves are essential for managing the uncertainties associated with healthcare operations.
"Strong reserves are essential to manage changes in community needs, payer disruption, cybersecurity costs, capital building projects, equipment purchases, and benefit-cost inflation, including IMRF obligations at Hammond-Henry," he said.
He noted that the hospital's financial position compares favorably with many similarly sized critical access hospitals but has become more sensitive in recent years.
"Hammond-Henry's cash and investment position compares favorably with that of many critical access hospitals; however, our financial position is more sensitive and carries greater risk than it did two years ago and does not match the resiliency of larger systems," Brieser said.
He also cautioned that investments in technology can create temporary financial pressure.
"Investments such as EPIC demonstrate the hospital's historical financial strength and provide long-term value to the community, but they also create near-term costs and operational pressure," Brieser explained.
He noted that as the hospital continues optimizing EPIC workflows, the time required to collect patient accounts receivable may increase, potentially reducing cash on hand temporarily.
Brieser also pointed to the costs of medical equipment and facility improvements.
"I would offer to you that we are better than many like sized hospitals, but not sitting on any substantial cash or investment holdings," he said.
He cited an MRI upgrade costing more than $1 million several years ago and current improvements to the hospital's sterilization and processing department approaching $1 million. Future facility projects are also expected to require significant capital expenditures.
The FY2026 draft audit identifies approximately $43.85 million in investments designated by the hospital's board for capital improvements and expansion. The audit states that the board retains discretion to use these investments for other purposes, meaning they are board-designated rather than legally restricted in the same manner as donor-restricted funds.
The audit separately identifies approximately $4.5 million held by the hospital's foundation and in donor-restricted funds.
Brieser said the hospital expects to use its upcoming strategic planning and facility assessment process to determine how capital resources should be allocated.
Facility Planning and Future Capital Needs
Hammond-Henry is preparing to evaluate its future facility needs through a proposed planning agreement with Wold Architects and Engineers.
Brieser said the master facilities plan will be developed alongside the hospital's broader strategic planning efforts.
"The Master Facilities Plan, in concert with our Strategic Planning will evaluate multiple projects and priorities based on community needs, operational requirements, and financial feasibility," he said.
The planning effort is intended to identify potential improvements and establish priorities based on available financial resources and anticipated healthcare needs.
Brieser also encouraged residents to participate in a publicly available community survey.
"The planning process is intended to establish a fiscally responsible roadmap that ensures our facilities and resources continue to support the community's evolving healthcare needs," he said.
The planning effort comes as the hospital balances continued investment in facilities and equipment with financial performance that remains below its operating targets.
Hospital Board Approves FY2027 Appropriations
The Henry Hospital District Board of Directors unanimously approved Tax Levy Ordinance No. 284 on October 20, 2026, outlining the hospital's appropriations for the fiscal year running from June 1, 2026, through May 31, 2027.
The hospital's most recent property tax levy totals $998,953, according to information provided to the Geneseo Current. The levy represents a separate source of funding from patient services, investments, and other hospital revenue.
The ordinance identifies approximately $60.49 million in budgeted operating expenses and $67.51 million in estimated operating revenue. It also includes appropriations for capital equipment, facility improvements, bond payments, interest, and retirement-related obligations.
Among the amounts identified are approximately $1.39 million for hospital capital equipment, $695,200 for capital improvements, and $1.41 million for Illinois Municipal Retirement Fund contributions.
The ordinance reports a net appropriation cash flow figure of negative $920,489.
For context, the FY2026 draft audit reports approximately $1.16 million in property tax revenue. That amount reflects revenue recognized during the fiscal year and should not be treated as directly comparable to the most recent levy without accounting for the relevant tax periods and financial reporting methods.
All nine board members voted in favor of the ordinance, with no opposing votes or absences recorded.
Looking Ahead
Hammond-Henry's financial statements reflect an organization experiencing operating losses while continuing to invest in physicians, technology, equipment, and services.
The FY2026 operating loss was significantly larger than the previous year's, and financial performance during the opening months of FY2027 remained below budget.
At the same time, the hospital maintains substantial investments and liquidity, and several service areas continue to record patient activity above projected levels.
Hospital leadership has identified physician recruitment, expanded services, staffing stability, and improvements in operational efficiency as important components of its financial strategy.
The financial outcome of those investments will depend in part on patient volume growth, staffing costs, reimbursement collections, and the hospital's ability to manage expenses while developing additional services.
For residents of the Henry Hospital District, future financial reports will provide an opportunity to evaluate whether those investments produce the anticipated improvements and how the hospital balances its operational needs with its longer-term capital priorities.
Sources
Hammond-Henry Hospital, FY2026 Draft Financial Statements and Supplementary Information. Financial statements for the years ending May 31, 2026, and May 31, 2025, including operating revenues, expenses, pension-related adjustments, investment income, assets, liabilities, and changes in net position. Prepared by Wipfli LLP. The document is marked draft.
Hammond-Henry Hospital, Unaudited Financial Statements for the Four Months Ended September 30, 2026. Prepared and submitted for board approval by Chief Financial Officer Jodie Criswell. Includes operating results, budget comparisons, balance sheets, patient volumes, staffing expenditures, and financial performance indicators.
Henry Hospital District, Tax Levy Ordinance No. 284, Fiscal Year 2026–2027. Approved unanimously by the Henry Hospital District Board of Directors on October 20, 2026. Includes operating appropriations, estimated revenues, capital expenditures, debt obligations, and retirement contributions.
Wyatt Brieser, Chief Executive Officer, Hammond-Henry Hospital. Written responses provided to the Geneseo Current concerning FY2026 operating losses, FY2027 financial projections, staffing challenges, patient volumes, capital planning, and hospital reserves.
Henry Hospital District Property Tax Levy Information. Most recent levy amount of $998,953, as provided to the Geneseo Current. The applicable levy year has not been independently confirmed.
Becker's Hospital Review, "Bedside Nurse Turnover Reaches 18%." Healthcare industry reporting referenced by Brieser concerning national nursing workforce challenges. https://www.beckershospitalreview.com/workforce/bedside-nurse-turnover-reaches-18/
Becker's Hospital Review, "Why 43% of Hospitals Are Losing Money." Healthcare industry reporting referenced by Brieser concerning hospital operating losses and financial pressures. https://www.beckershospitalreview.com/finance/why-43-of-hospitals-are-losing-money/
