Members Present: Guests Present: Staff Present: Tammi Hardy, Chair (via phone conference); Jim Bachrach, Vice-Chair; Duffie Harrison, Secretary; Robert Davis; Deborah Huckeba; Pat Conrad MD; Homer McMillan Pam Townsend, Adams Management Services (via phone conference) Ginny Griner, HR/ Med Staff Coordinator; Heather Guidry, Administrative Assistant; Ray Brownsworth, CEO; Craig Gibson, Plant Operations Director; Becky Gibson, DON TOPIC DISCUSSION Call to Order/ Approval of Minutes Jim Bachrach The meeting was called to order by at 9:00 am. ACTION Minutes from the 3/28/2013 regular board meeting were presented for approval. Motion made by Davis to approve minutes as presented, second by Huckeba. Motion carried unanimously. County Report Ray Brownsworth Brownsworth attended a county pre-budget workshop Monday. When asked about large, anticipated costs for the upcoming year, Brownsworth informed the commissioners of the following: o A 3% pay adjustment for all WMH staff is desired. o From a capital expenditure standpoint, matching funds will be requested for the rural EMS grant. A grant application was submitted to the state for re-chassis of one ambulance and a chest compression system. If the rural grant is approved, the 10% of matching funds will equal $11,739.79. o Desired equipment services include either an ultrasound unit or a digital mammography Page 1 of 8
unit. Brownsworth spoke with Franklin Needs yesterday regarding fundraising efforts for a digital mammogram machine. Considerations for funding include purchasing the equipment on a payment plan, and then funding the payments through fundraising. Brownsworth is looking on government websites for an ultrasound. The radiology staff will need to be trained on both the ultrasound and mammogram. It will be easier to train on digital mammography as the staff is already trained for analog mammography. Bachrach questioned the ambulance budget. Brownsworth stated the costs for the ambulance service are being tracked by separating the ambulance and hospital/clinic. This will assist with future requests for a larger county stipend. Currently, Brownsworth is attempting to regulate ambulance cost by controlling overtime. Additional EMS staff is being hired. Overtime is currently occurring when scheduled employees call-in sick. For all hospital departments, overtime must be approved by administration. Marcia Johnson brought up that the hospital has not made a payment towards the money invested by the county at the end of the DaSee administration. Brownsworth stated that WMH was unable to pay at the present time. Commissioner Sanders said the issue needed further discussion. Brownsworth is attempting to set an appointment with Commissioner Sanders in regards to community outreach. TMH Report Ray Brownsworth Laura Faison was unable to attend today s meeting due to a scheduling conflict. She will be here Monday. Faison is working to arrange rotating residents for primary care with WMH s clinics. Once this is accomplished, she will then focus on arranging for additional specialty care providers. Brownsworth is scheduled to meet with TMH administration. He will be requesting assistance with grant writing. Bachrach mentioned that there is a person locally who will assist with grant writing on a contingency basis. Medical Staff Report Dr. Conrad The draft minutes from the 4/16/2013 medical staff committee meeting were presented for Page 2 of 8
individual review. At the meeting, the medical staff deleted a few medications from the hospital formulary and streamlined medications for acute situations such as MI. Physician scheduling issues are somewhat improved, though admission rates continue to be less than desired. Conrad viewed a demonstration from CSS on their E.H.R. product yesterday. He did like the product. Chuck Edwards had favorable comments regarding cost in comparison to other competitors. Per Brownsworth, CSS and Healthland are the two companies whose E.H.R. products are in consideration. A final bid will be requested from both. Within 45 days, it is hoped that a recommendation for purchase will be made to the BOD. The proposed contract will be viewed by a law firm that is used by TMH. It is hoped that TMH can assist in obtaining a lowered or pro bono cost for the consultation. The estimated cost for the CSS E.H.R. is $450,000. A creative financing option is offered with an up-front payment of $50,000 and no other payments until meaningful use incentive money has been received. Once the incentive has been received, CSS would receive half. Over the next 39 months, as their software and services increase the effectiveness in collecting cash, 1/3 of the increased revenue would go to payment for the product, another 1/3 would go to payment for their billing services. The hospital would have to change from ARX to CSS billing services. At the end of the 39 months, any remaining balance would be written off. Conrad stated that he was in favor of equipment and services that will bring revenue, but for life saving equipment, an ultrasound is needed. Conditions that present at the ER such as arterial occlusions, ectopic pregnancies, testicular torsions, and blood clots can only be ruled out with an ultrasound. Currently, suspected conditions such as these have been responsible for transfers to other facilities. Typically, these ER cases are sent to Sacred Heart as an outpatient and return to WMH if an admission is needed. The expensive part of adding ultrasound services would be in obtaining an ultrasound tech. Conrad reinforced that Southland ER Drs would not take the responsibility of interpreting ultrasound imaging. Harrison asked about the status of an ultrasound purchase. Brownsworth stated that a business plan is needed to establish costs, and then the decision can be made to purchase the equipment and employ an ultrasound tech. Page 3 of 8
Medical staff privileges for Dr. McCready were approved by the medical staff. Approval by the BOD is requested. Conrad stated that he could address any questions regarding rotating residents, as he started at WMH as the same. Bachrach asked Conrad if the medical staff had any specific thoughts on marketing. Conrad stated that word of mouth from the ER is the biggest influence on marketing. Brownsworth stated that he would like to overlay with other methods such as advertising in the paper, speaking with civic groups, television spots, and publishing positive patient stories and health articles. A motion was made to approve Dr. McCready s medical staff privileges by McMillan, second by Davis. Motion carried unanimously. Debt Capacity Study Pam Townsend via phone conference The Debt Capacity Study results were reviewed in detail. The financial state of the hospital through February was annualized with the exception of transfers and tax income. Townsend reviewed the summary of adjustments/ assumptions made to the financial statement. o The sales tax subsidy was estimated to be $2,200,000 o Admission estimates were lowered through 2013 secondary to Dr. Miniat s departure. o An increase in swingbed admissions was anticipated with the increased nurse focus on promoting the rehab program. o A one-time pay increase of 3.5% across the board for staff was included. o With clinic changes, an additional 10 clinic visits per day were anticipated. With additional clinic visits, one in-patient admission per week was assumed. o A 2% sequestration payment reduction for six months was included. o Purchase of an electronic health record with increased annual maintenance fees was included based on previous estimates for purchase. o An annual purchase of $250,000 in capital equipment was included. o Inflation assumptions were projected forward to 2016 Page 4 of 8
Given that WMH is a CAH, Medicare and Medicaid reimburse the hospital 101% of the cost of providing services. Every time $100,000 is spent, the hospital is reimbursed about 61%. Additional depreciable assets and subsequent debt results in higher reimbursement, resulting in increased revenue and higher debt capacity. Townsend stated that if the BOD wished to continue with the pursuit of a $14 million loan, it could be accomplished but with a lot of work. Another feasibility study would be necessary. MacMillan questioned why it was assumed that lost admissions following Miniat s departure would not be recaptured. Townsend stated that only 50% of total historical Miniat admissions were removed. Brownsworth stated his intention to recover lost admissions. The addition of a physician with the clinic s move was not included in the study. Harrison questioned the inclusion of the ambulance service in the study. Harrison felt that it should not be included as it is legislative mandate for the county to fund ambulance service fully. Brownsworth stated that if the board wants to be aggressive and look for a $14 million loan, then increased county funding of the ambulance service would be necessary. MacMillan expressed that he thought the ambulance service was reimbursed dollar for dollar. Brownsworth stated that the ambulance is not cost-reimbursed by Mcr/Mcd. Bachrach stated that the actual cost of ambulance services needs documentation. Per MacMillan and Harrison, the capital fund voted on by the county was not intended to supplement the ambulance service costs. Brownsworth expressed that the county citizens are becoming disenchanted with the sales tax; a decision needs to be made as to how to prioritize the use of the capital fund. Hardy stated the hospital is bound by the referendum which listed building the Carrabelle clinic, improving EMS services, and then building a new hospital. Hardy is concerned with investing money into renovations for a building we do not own. She is still curious as to what is needed to make the 12 th Street building functional. Hardy then addressed the difference between county reimbursements of the ambulance service versus the actual cost. Several years back, the county was considering contracting the ambulance service to a third party. EMS staff, hospital staff, and the BOD recognized the anticipated decreased quality of EMS services for citizens of the county based on historical events. At that time, the board acknowledged that there would be a deficit of reimbursement and agreed to fund the extra cost. Hardy fears that if additional funding were requested, the county would again bid the ambulance service out to private company. Harrison would still like to see the costs broken out, and then the issue can be tabled if needed. Hardy feels the difference in ambulance cost and county Page 5 of 8
reimbursement could be tracked and used for balancing the proposed amount that the hospital owes the county. Bachrach stated that he simply would like the county to be aware. In demonstration of the organization s value, Brownsworth pointed that the hospital provides many community services, which would not be provided by a for-profit organization. Further, 29% of what the hospital does is uncompensated care. Griner pointed out that during a public hearing with Lifeguard, the county instructed the hospital to add a 3 rd ambulance on weekends. The hospital agreed to fund the 3 rd ambulance for the weekends. Five days after the meeting, Shuler called stating we misunderstood and the county wanted the 3 rd ambulance 7 days per week. This cost was in addition to the cost agreed upon at the hearing. This resulted in the additional unanticipated cost being taken on by the hospital. CEO Report Ray Brownsworth Financial Report Financial statistics were provided regarding AR days, patient cash, billed charges, and insurance greater than 90 days from 01/2012 through 03/3013. Statistics for payer mix, Medicare greater than 60 days, AR balances and average days to bill were provided for 01/2010 through 03/2013. Revenues were overinflated for last year due to a general ledger error in regards to tax income. The reversal has been made, which shows as a negative balance for February. Also an additional $129,000 in EMS cash revenue had to be reversed. Brownsworth will ask for a correction to all statements from fiscal year start to present to show a true performance picture. The Income Statement ending 3/31/13 was reviewed in detail. o Total patient services gross revenue is $1.2 million, after contractual allowances the revenue is reduced to 1/2 of that amount. Bad debt and charity reduces the revenue an additional $202,000. Brownsworth is working to convert as much bad debt as possible to charity. Charity influences LIP and DSH payments. The financial counselor has been moved to a new office to increase focus on financial counseling. Bachrach questioned high charges for lab tests when the reimbursement from insurance companies is lower. Brownsworth recognized the need to adjust the chargemaster every few years, though it is more difficult to adjust to market prices now due to anti-competition laws. He is working with the lab staff to make appropriate adjustments to the charges. Hardy questioned the use of Page 6 of 8
Craneware which was purchased to facilitate chargemaster adjustments. Brownsworth stated that the Craneware system has limited use due to the fact that it is not as up-to-date as it should be, as well as the difficulty in data extraction. Brownsworth stated that he would not have recommended investing in this particular product. Mr. Roberson has used it intermittently. Brownsworth will research and validate the potential use of the Craneware system. If it is a functional system, the staff will need to bring the chargemaster current. Hardy wants to find out when the chargemaster was last updated. Brownsworth will bring the issue back to the BOD. Patient Satisfaction The March Patient Satisfaction Survey results were presented for individual review. Brownsworth and Dr. Conrad are currently in discussion on how to bring the patient satisfaction to the next level. CFO Applications Griner has emailed the CFO applications to the BOD. The next step is arranging for interviews. Hardy questioned how interview process will be conducted. Brownsworth has requested involvement from Bill Giudice, TMH CFO and Suzanne Hollar, TMH Director of Financial Systems. Interview options include Skype and face-to-face. Hardy requested as much of the BOD participation in interviews as possible. Hardy stated that historically TMH led the interviews and their choices did not particularly match what we needed for our area. Bachrach suggested the BOD proceed with the interviews with the same process conducted for the last CEO hire. Griner will make arrangements and facilitate the interviews with the board. Brownsworth requested that after collective recommendations, he would like to make last decision as he will be working closest with the CFO. Hospital CEO Report to the Board of Directors A public hearing is necessary to finalize HB711 requirements. Brownsworth will make arrangements. McMillan suggested that our lobbying group, FHA, should request reimbursement from the state for the expenditures made to meet the state mandate. Dr. Spurgeon was interviewed by Dean Watson MD, CMO TMH. Dr. Watson liked Dr. Spurgeon but remained unconvinced that there was a significant differential in physician versus RN influence to change referral patterns. Ray has notified Dr. Spurgeon that he will not be engaged as a Swingbed liaison, though when he moves to area, other areas of participation may be reviewed. Page 7 of 8
Old/ New Business Harrison stated that with decreased admission numbers seen after the loss of an area provider, the move of Weems West clinic should be expedited. Harrison would like Brownsworth to look at leasing another building. Tammi recommended other areas be considered, especially areas with higher traffic and visibility. Huckeba wants to see an emphasis on new hospital construction. Per Brownsworth, priorities must be established before moving forward. Discussion was held regarding the ability to keep CAH status if hospital location is moved. Bachrach questioned when the strategic planning will begin. The issue will be added to the next month s agenda. Adjournment Meeting was adjourned at 11:02 am. Page 8 of 8