In July 3-9 issueBy Greg WellsTimes Journal Managing EditorABOVE: RC Hospital CFO Kim Kimsall watches as Dr. Jerry Westerfield makes an emphatic point.
RUSSELL SPRINGS - An operating loss of $91,800 put the last month of the Russell County Hospital's fiscal year more than $52,000 in the red. This means the hospital will finish somewhere around $207,000 to the good for the year according to the papers provided at this week's hospital board meeting.
In the budget presented for the coming fiscal year the members of the Alliant management team told the board they plan to finish next year with a profit of $782,404 overall.
Last year they told the board they would finish this year $1.08 million to the good, rather than the $300,000 they are presently projecting.
In the last two years, figures requested from the office of the hospital's chief financial officer show that, operations have been a loss of over $180,000 each year for the hospital, but the new budget promises an $813,119 profit next year.
This year the budget projected a $636,726 profit in operations. The projected loss is at best close to $176,000.
This year's budget, like last year's, was approved by the board. Unlike last year there were pointed questions from the county hospital board members about the provided budget.
First item questioned was $25,000 budgeted for a professional to develop a master plan that will guide the hospital's future expansion.
CEO Gary DelForge said the plan was needed, citing a recent review of the hospital's lab which listed it as substandard and requiring improvement or the hospital could lose accreditation.
A board member said, "We have so many equipment needs and so little money to spend, it gets down to 'do you want to spend $25,000 on a master plan or do you want to spend $25,000 on the things people need for the health of the community.'"
DelForge quoted the letter from the accreditation group, "This isn't going away this time without some action."
The accreditation group demanded a letter from the CEO and the board detailing how deficiencies would be addressed and a timeline for that or they would not approved the accreditation again in 2010.
DelForge indicated that even if no building was done in that time, a master plan would indicate that they were planning to address the space needs of the laboratory.
It was noted by Mike Hubbard, an efficiency specialist with Alliant, said that there are other laboratory accreditation boards if necessary.
Jeff Buckley, also with Alliant, said the board needs to move forward with a plan to address needs. He said the previous plan was a "Christmas list" of everyone's wants and no consideration given to what was affordable.
Any new plan needs to be detailed and include financial considerations and priorities.
Board Member Rodney Johnson asked about a feasibility study for what was needed and how to fund it.
DelForge replied that they can't examine the feasibility plan until they have a master plan to address needs.
"We need a lab and we need it now," said Dr. Westerfield, his voice rising in volume. "This place is noted for procrastinating - procrastinating - procrastinating."
He pointed to the display boards he brought with him to the meeting, "I've got sitting here over three or four master plans. We have a need and that need is for a lab and additional x-ray space."
The doctor's voice became louder as he said, "You put that (new lab) in now and you find someway or another to finance it. And then that buys us time. You can do that master plan whenever after that."
As he proceeded to pound the desk with his fist, Westerfield said, "This place is falling apart with no space. It must be built and I think it should be built now! I'm tired of this procrastination!"
Hubbard said the hospital's financial situation did not allow them to proceed as he was asking and suggested the matter could be discussed "in a civil manner."
To which the doctor responded, "Other hospitals are building and improving and we need to find a way to fund this."
Hubbard replied that, "Dollars and cents say we don't have ability to do it right now.
He had an opinion on how Russell County Hospital came to be in the situation it finds itself presently.
"Other hospitals have had consistency of leadership," Hubbard said. "We hop around from plan to plan to plan like a grasshopper and we never go a consistent direction. That's why I think a master plan is the best direction to go."
As they went past the master plan issue, Kimsal told the board there would need to be some increases in the hospital's billing rates for services and there would be three percent pay raises for employees.
The discussion continued on the budget proposal with the next issue being addressed was what Kimsal termed as, "productivity improvement and monitoring in the personnel area."
This piqued the board's interest and more detail was sought.
Kimsal deferred to Buckley who introduced Mike Karra, the Alliant clinician who said he had spoken with the department heads and they would be monitoring specific statistics such as number of procedures, patients' stays, prescriptions filled and so on to determine the hospital's actual staffing needs.
It seemed clear to some on the board that a reduction in labor cost of $250,000 would mean some real cutbacks.
It was noted that with overtime not out of the ordinary on an average week and only about three percent staff attrition that the management firm was talking about layoffs.
This they denied emphatically. "There is no termination," Karra said.
"Only time I've seen a hospital have to layoff is if they are going to shut the doors," Buckley added.
In all they were looking at reducing staff by the equivalent of 6 full-time positions, or 12 part-time or some equal combination of full and part-time staff.
DelForge said he has addressed this with department heads and explained that the hospital has had equipment needs they weren't able to address without tightening belts.
"You are overstaffed in some departments compared to industry standards," Buckley added.
In the end the board was told that the staffing changes were recommendations, that staffing changes would be up to them.
An improvement to the hospital's income was a "Geriatric Psych Unit," which Kimsal said was a "turn-key" proposal from an outside group which required only space to work in.
DelForge said the present administration building could be used and they could rent half of the old ambulance building for $1,500 a month plus the cost of modifications.
"We could have purchased that building. Payments would have been $1,000 a month and we couldn't afford that, but we can pay $500 a month more to rent it?" a board member questioned.
In the end that suggestion was quashed and though they consented to look at the new unit they were interested in them sharing space with other programs in the hospital.
Other issues addressed at the meeting were
The computer imaging for the radiology department, known as PACS, will be online this Friday Westerfield said.
DelForge said the new Chiller has been installed and training was conducted Monday.
"We needed it because that other chiller was really stressing out - back when it was 90," He added.
Buckley told the board that there has been no change in Anthem situation and they expect none until the 180-day termination notice period is nearly over.
That period is the waiting period in the hospital's contract with that insurance provider allowing for a 180 day period after the hospital gives them notice that they will no longer be participating in their plan.
The administration has said the impending termination was the only way they felt the hospital could draw serious negotiations from the Anthem Blue-Cross / Blue-shield provider. They have contended that their present compensation plan doesn't even cover the cost of the services they are providing.
"We are planning a meeting with Humana reps the third week in July. At least they're willing to talk. We do have an offer on the table and they're willing to come back to the table as is Bluegrass Family Health," Buckley concluded.
Westerfield's report on the medical staff was they felt that a new lab needs to be built.
"Obviously we need to replace that lab and have for the six years I've been here," Westerfield said. "If we built a new lab space out there in the courtyard we would be able to open up the lab space for a new x-ray room.
He said he had already obtained a quote from Branscum Construction for what it would cost to enclose that area and outfit it as a laboratory.
He did not elaborate on the proposed cost.
Westerfield concluded that with the lab relocated that space could be remodeled.
"We already have the x-ray equipment in storage and we could have another x-ray room," he said.
As for the monthly budget report, Ken Kimsal told the board the hospital was again below budget for inpatient proceeds and increased in uninsured patients, compared to last year, subtracted from the bottom line.
He said the hospital has a 55-day cash reserve and average receivables are 58 days from billing to collection.
After a secret session, hospital board members first took the administration to task and then ordered them to never again prepare press releases in advance of a meeting.
That movement came after members of the media questioned how such a release could be prepared with the board's decisions already listed, when the meeting had not even taken place yet.