Lawrence Memorial Hospital, 325 Maine.

Lawrence Memorial Hospital leaders expect to end 2010 in the black with an operating profit of $7 million.

But, that’s down 26 percent compared to the $9.5 million projected for this year, and 13 percent from 2008’s profit of $8.1 million.

“Overall, it’s a solid budget,” said Chuck Heath, finance committee chairman.

The Board of Trustees approved the 2010 budget on Wednesday morning during its monthly meeting.

Hospital leaders anticipate operating revenues of $172 million, a 7 percent increase over this year’s projected numbers. But, they also expect expenses of $165 million, a 9 percent increase.

“The budget reflects the reality of the current economic situation on hospital operations and the uncertainty of its future impact,” CEO and President Gene Meyer said. “While we are forecasting increases in inpatient days and outpatient activity, significant increases in bad debt and charity care will challenge the hospital’s bottomline.”

The hospital is committing nearly $9 million in projected write-offs for patients who apply for and meet requirements for financial assistance. This is an increase of 12 percent over 2009. That includes $2 million for people who are referred from Health Care Access, a medical clinic that serves uninsured Douglas County resident.

Salaries and wages are expected to cost $59.7 million in 2010, which is 10 percent higher than what’s budgeted this year.

“We have to maintain a salary level that will help us keep the excellent staff that we have,” Simon Scholtz, chief financial officer, said.

The hospital is raising its rates 5 percent to help offset inflation, the same as last year.

Operating income is reinvested back into the hospital through funding of capital expenditures and reserves.

In 2010, LMH plans to spend nearly $10 million on capital improvements. About half of the money will be spent on the old surgery area in the heart of the hospital. The laboratory will be expanded to take up part of the area. Plans also call for the Pain Management Clinic and Endoscopic Center to be relocated from LMH South to the area.

“We’ve been managing our expenses very closely,” Scholtz said. “It’s important to us that this hospital thrive for many years to come.”