In Jan. 24-30, 2008 issue
By Greg Wells
Times Journal Managing Editor

RUSSELL SPRINGS - The Russell County Hospital's financial report was alarming to at least one of the board's members when it was presented during their monthly meeting.

Board Member Chris McQueary said that at this point in the present fiscal year the hospital was $160,000 worse off than it had been at this point in the previous fiscal year.

Chief Financial Officer Ken Kimsal said the hospital had a net loss last month of $60,417 and that put the hospital $5,206 in the hole for the present fiscal year.

Kimsal said labor costs had been up because of the holidays and vacations, but "we had a tremendous increase in bad debt."

He said that was due to a large increase in the number of people without insurance seeking services at the hospital, especially in the emergency room.

The indications were not good if the trend continues Kimsal said: "Worse case is we'll take a $50,000 a month hit going forward."
The members of the board were told that the cause or causes of the increase in "bad-debt" were being searched for and analyzed.
Kimsal explained that there had been a 30 percent increase in the number of hospital patients that didn't have insurance in last 6 months compared to what had been seen in the previous 6 months.

He said the hospital ended up with $312,000 in bad debt when they were expecting $213,000.

"I've never seen anything like this in the more than 20 years I've been working with hospitals," said Jeff Buckley, a vice-president with Alliant.
He and the other Alliant personnel said there was research underway to see if it was possible to understand the sudden up-surge and to see if other hospitals were experiencing the same thing.

Kimsal and Chief Operating Officer Gary DelForge said they would expect to have more information by the next board meeting.

The board, on DelForge's recommendation, had earlier held off on committing the recently received Medicare cost report reconciliation of $500,000 to payment on the hospital's debt load.

The money was paid to the hospital to make up for underpayment by Medicare through the year.

DelForge explained that the management firm was doing a detailed cash flow analysis to determine how much of that money should be kept in the hospital's accounts and how much should be paid toward the debt.
Kimsal explained afterwards that this was to keep the hospital from coming up short of cash and having to borrow cash short-term.

County Judge-Executive Mickey Garner went on record telling the board that the Fiscal Court and many in the community wanted to see the hospital apply all it could toward paying off the hospital's debt.

Dr. Jerry Westerfield, chief of staff and head of the hospital's radiology department, put himself and the hospital's staff on record as opposing the focus on paying off the debt.

"Everyone is expanding around us," Westerfield said referring to other area hospitals. "You must spend money to make money."

He explained that this was the position of the staff, as expressed in a recent staff-meeting vote, and that they were displeased with what he termed the administration's "poverty mentality."

It was after Westerfield's statements that Kimsal announced the un-expected loss for last month.

Before that DelForge had told the board that the hospital had saved over $172,000 by changing employee health insurance providers and that was part of over $412,000 in savings realized this year through the help of their new insurance broker.

The board was also told that the hospital's billing was now being done by employees at the hospital and that unless a bill went unpaid for 90 days it would no longer be handled by a collection agency.

DelForge said he expected it would bring in as much or more in payments and that it would greatly improve the hospital's relationship with patients.

Buckley also told the board that Alliant was bringing in a professional negotiator to address what they have said is an unfair contract with Anthem Blue Cross Blue Shield.

He told the board that Anthem is paying only 50 percent of the hospital's billed charges while other companies are paying 80 percent.

Also in the Jan. 16 meeting the board approved a $440,000 purchase of a digital system for the radiological department.

The new system known by the acronym PACS, which stands for Picture Archiving and Communication System, is designed to allow remote viewing of X-rays and other tests.

The board members were told by members of the Alliant Management team that the system was becoming essential for hospitals and the purchase was vociferously supported by members of the hospital's radiology department.