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Tuesday, May 3, 2016

Cost cutting measures implemented

Wednesday, February 3, 2010

After facing yet another month of decreasing revenues and loss, the hospital board spent their meeting on Monday, Jan. 25 looking at ways to cut costs and expenditures. "The calculated loss for December is $216,430, and our year to date loss is $713,245," said Administrator Joe Hammond. "When you apply the amount from the contingency fund, those numbers drop to $189,176 for December and $388,702 for the year. Year to date, we have utilized $324,543 from the contingency fund to fund our operating expenses."

Hammond cited a drop in gross revenues across the board as the cause of the current downturn. "The drop in overall census is what is driving these losses," said Hammond. "If we stand still, we'll stagnate. We have to move forward, even though there are risks moving forward. We have to have more admitting physicians to this facility. I can squeeze finances, I can make cost cutting measures, but I cannot admit patients. I can't order labs, with the exceptions of Dr. Arnold, no one else in the room can."

One bright note for the hospital has been the opening of the new swing bed hall, which is averaging 9.5 days per patient, up from eight days previously. "Both patients and family have been very complimentary about that hall there," said Hammond.

Surveyors from the Arkansas Department of Health were at the hospital recently to conduct the facility's critical care access survey. "It was the first time they had been here in a little over four years," said Hammond. The survey lasted three days and cited several infractions, including outdated drugs on the swing bed hall, in the emergency department, and one of the crash carts and the endoscopy lab. They also indicated that the soiled linen room needs a one hour fire rating, and the best solution for the hospital will be to install fire sprinklers in that area. In the environment of care, humidity control in the endoscopy lab was cited as needing to be logged. EMS and the pharmacy both had no deficiencies. "In swing bed, our activity director needs to have some specific training in that," said Hammond. "Right now, we have an individual who is very good at it, but doesn't have the official training to do it." It was also discovered during the survey that one of the hospital's ancillary staff had allowed their license to lapse, and Hammond assured the board that a thorough review into the matter was being conducted.

Dr. Griffin Arnold, the hospital's chief of staff, then gave his monthly report to the board, focusing on ways to improve the hospital's bottom line. "The way to make this facility work is by the number of physicians feeding it stuff," said Arnold. "We're in a stalemate on that, especially in light of the things that have happened recently. One of the things that CEO Hammond and I talked about this morning is that we have to think outside of the box on this. We need to improve the overall feeling of quality to other surrounding physicians and improve on their ordering of services from our facilities. We need to speed up our turnaround times for them."

Arnold also focused on the great strides the medical records department has made in reducing the number of outlying charts. "We had $222,000 out just in charts in October," said Arnold. "That decreased to $200,000 (in November) to $153,000 (in December) to $11,000 (in January) on the acute care portion. The total number of charts out there, that is our total number of pending dictated charts, is 14. In the past, one physician has had 30 or 40 out at a time, so we have greatly improved." Arnold also praised the new swing bed hall. "Out of our seven beds, we have five people in," said Arnold. "One last thing to point out is the responsibilities of this board. Under section 5 of the rules and regulations for a critical care access hospital, it states that the 'governing body which shall be legally responsible for the critical care policies' of this facility. This board is legally responsible, and very important, and we have to take it very seriously."

As part of Administrator Hammond's expense reduction plan, beginning with the pay period starting January 31, the existing program which paid nursing staff 40 hours for only 36 worked will cease. "That was instituted 14 years ago during a nursing shortage," said Hammond. "It was a functional perk at that time, but it costs the hospital around $100,000 a year to do that, so we're going to an hour's worked to an hour's paid policy."

Board member Jerry Blevins voiced concerns over the cut in pay. "Some of these folks are just barely getting by -- it's going to cause them a hardship, and without them there will be no hospital," said Blevins.

Hammond responded that his responsibility "is to keep the doors of the hospital open." "I would personally rather work 36 hours than not have a job at all," said Hammond.

"Logically, if we're paying for people not working, that seems like a prudent way to cut expenses," said board chairman Albert Roork. "Any way we go, when we start cutting expenses we're going to inconvenience people, no matter what we do. This is not cutting personnel; it's letting everybody keep their job. We may be cutting them four hours, but we've done a lot for them too this year, such as cutting their deductible from $2,500 to $500. Bottom line is, you've had such a reduction in the amount of money that's coming in, you have to do something. And as painful as it is, the employees will understand. And when we get into a position where we are more financially sound, we can do something to reward them. But right now, the main thing is to keep the hospital open now."

Hammond stated that the dietary department had worked out a new ordering system with US Foods to save approximately $77,000 annually, plus implementing a tracking system to look at monthly cost per meal and cost per patient day. Hammond also discussed reducing inventory and going to a "just in time" ordering system. "We continue to look at all opportunities to cut costs; we simply have to," said Hammond. "I can't have a doctor here to start tomorrow, and I can't admit patients, so the things that we can reduce in expenses we have to do right now."

Finally on the agenda, the board was presented with both a quality assurance plan and a compliance plan that had been recommended by the medical director for approval. "The QA plan is geared toward putting on paper some planned direction on how to take care of and improve the quality of the facility," said Arnold. "As long as we're open for business, we'll find new ways to improve the quality here."

Both plans were accepted and the board went into executive session to discuss personnel matters. No action was taken upon resumption of the meeting.



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