Niki de Soto
On Friday, June 4, Fulton County Hospital administrator Joe Hammond shared some good news -- Dr. Ahmad Saab was granted his Arkansas Medical License and will be coming to join the hospital around the first of August. This, coupled with the news that Dr. Madhulika Krish has accepted an offer to join the team at Fulton County Hospital and is expected to arrive in late July, means things are definitely looking up for the hospital and for the overall medical care of the community.
At the hospital's Board of Governor's meeting on May 24, providing clinic space for the two incoming physicians was top on their list.
"We have gotten some input and drawings to renovate the clinic building on campus," said Hammond. "We would like to put both doctors into this building with Dr. Krish on the back side and Dr. Saab on the front side, and we've come up with a very workable concept."
Hammond went on to explain that he had approached Mike Clark with White River Planning and Development regarding a loan to cover the costs of the building renovations. "They have said that all they need is a brief description of what we plan to do with the loan and a board resolution with a cap on it," said Hammond. "With the debt that we have outstanding with White River, our amount that we would be able to borrow is between $125,000 and $130,000 and the resolution is made out with a cap of $200,000. As other amounts are paid down, we could borrow more up to the cap amount."
Some board members were curious as to why the hospital had not instead applied for a grant to cover the costs of renovations.
"The reason we aren't trying for a grant is because we don't have time," said board chairman Al Roork. "It would be some time in the fall before we knew if we were going to get it or not, and time is not on our side. We can't wait until the fall and maybe not even get the grant. We're talking about a $50,000 grant and we have a doctor that can be here in 30 days. We can't possibly get that building completely finished in 30 days, but we can have it substantially done in a month if we start now. The grant is not a sure thing at all."
Board member Jerry Blevins was disturbed by the fact that the renovation had been delayed until now, so soon before Dr. Krish's arrival. "I'd like to know why suddenly we had to remodel that thing," said Blevins. "You know, it's been sitting there for eight months. Looks to me that if you were going to do this, it should have been started eight months ago instead of waiting until we have to have it."
Hammond explained that the original timetable for Dr. Saab had been for a late August, early September arrival, giving them more time to complete the project. "With Dr, Krish accepting our offer and being able to be here in 30 days and already being licensed in Arkansas, that's much quicker than we expected," said Hammond.
Hammond said he felt comfortable saying the cost of the renovations would be around $130,000. Architects Doug and Herman Lee, who are also the architects for the proposed new Fulton County Jail, advised the board that to get all the areas needed into the existing space -- including three exam rooms, two doctor's offices, a triage area, procedure room and a lab -- a separate 31-by-32 waiting room would need to be added on.
"We finally have two doctors that are coming, and we have to do this right," said Roork in defense of the cost of the renovation. "In the grand scheme of things, $125,000 is not a whole lot of money to spend on this. These doctors have flawless backgrounds. We need to provide them with a proper environment. This is the most important entity in Fulton County, to Fulton County: for economic reasons and for life saving reasons. I hate to ask for more indebtedness, but this is a wise investment right here. This is an investment in the hospital's future and in the community."
Roork went on to add that he would approach the Fulton County Quorum Court about excusing the monthly rent on the building for two years. "I believe that they will, because they are all good citizens and are concerned about the hospital," said Roork. "I think we can look at it again after two years, and it may not be long enough, but right now it sure would help us."
Hammond also reminded the board members that both Dr. Saab and Dr. Krish would be bringing all of their office equipment and furniture with them, negating the cost for outfitting the clinic.
"We can discuss with them if we need to buy anything for them or not, but they are pretty much going to arrive fully furnished," said Hammond. "Both doctors are signing three year contracts, and both have a 90 day get-out clause for either party. The sign on loans and the moving expenses are contingent on them fulfilling those contracts. The sign on loan by percentage and the moving loan in total, so there is real incentive for them to continue on, making this an excellent investment in the hospital's future."
A motion was made to allow Hammond to pursue the loan from White River, and all agreed except for Blevins, so the motion carried.
In the financials report, Hammond pointed out that for the month of April, the hospital was showing a positive net revenue of $164,000. He attributed the rise in revenue to good management of an important funding ratio for the hospital -- that being the amount of allowable costs to Medicare patient days, as this ratio is what drives the hospital's per diem reimbursements.
"If for instance this allowable cost increases and patient days stay the same or decrease, then our cost per patient day goes up and consequently our reimbursement goes up, and that's totally contrary to the way a business on the square would run," said Hammond. "By the same token, if we were to manage the hospital in this next year like we were managing a hardware store, we have two new doctors coming in so our volumes are going to go up dramatically. If we say, 'I'm going to maximize my profits, and let the volumes go up dramatically, and cut costs to the bone and widen that margin to make a profit' you would traditionally think that was a good plan. But, if the medicare patient days side of the ratio gets really big and the allowable costs side of the ratio gets really small, then our per diem payment gets really small, which is totally contrary to how a normal businessman runs a business, but in cost-reimbursement, that's how that operates. Medicare is what pays for this hospital, so it is essential that we balance these, we monitor these and we manage these perfectly so we don't have to give money back, and we can continue to raise our per diem rates. I'd like to see the swing bed rate go up to $1,100 or $1,200 and our inpatient up to about $1,400 or $1,500. We have got to keep costs in this system, because allowable costs are our friend in this system. As we look at salaries, allowable costs and expenses, we need to keep in mind that they are not our enemies."
Board member Danny Perryman commented that it wasn't necessarily the medicare reimbursement that had caused the hospital troubles in the past, but the deficit between how much Medicare pays and the total costs for running the hospital which had caused headaches in the past.
"The thing with critical care access hospitals, the ones that are successful, is they diversify their service lines," said Hammond. "Some will do durable medical equipment, and I know of one that has opened an eye center and owns it. It is a wholly owned for-profit subsidiary of that hospital. And that's the trick of making up that gap. We're going to own two physician clinics over here, and they will be provider based clinics. Granted, there will be expenses associated with those. We're going to be getting the technical fees, everything other than the professional component will come to us from two of what I hope will be very productive physicians, and they will be part of the hospital. We're going to have costs associated with the clinic, costs associated with doing business, and we have to watch that and not let the patient days get away from us without putting additional allowable costs in there, such as new equipment in the swing bed hall or additional therapy equipment, or replacing equipment."
Hammond pointed out that the new Medicare adjustments had reduced the hospital's net loss down to $546,563, and remarked on statistics from the same period last year showing a drop in revenue of $532,000.
Board member Bill Pace then brought up his concerns regarding the budget.
"We as a board approved a budget back in July, and I'm concerned because we're just not paying attention to it," said Pace. "I'm looking at the budgeted revenue number of $18,200,000, and we've only collected $14,100,000 in revenue and we're not doing anything on the bottom line to offset that. We're almost $4,100,000 short of revenue on the budget, and the budget is supposed to be your guideline, and if your income is less you have to make your expenses less, and it feels like we're just completely ignoring the budget this year."
"I'm managing the costs, and watching our ratios," said Hammond. "You have to remember that we had a physician who lost his license three days after I came into this position, and it meant we lost 40 percent of our gross revenue, easily. In this business, a budget is a best guess estimate. We can certainly do a budget adjustment next year as well. So far, last month and the month before, we've been financially successful. The retro adjustment we received from medicare was a catch-up adjustment that covered a seven month period of underpayments. Our swing bed rates increased from $680 to $950 per patient day. Our inpatient per diem rate was increased from $860 to $1,000. So, we have had a rate adjustment, and that is what accounted for the $164,000 bottom line in the month of April -- one full month on these new rates. We are absolutely moving in the right direction financially, and we have some good momentum going and I, from the bottom of my heart, want to see this momentum continue. We are set to capitalize on what I believe are some of the only opportunities that we have, and that is to bring in two new doctors, get them set up in good surroundings that are good for the patients and the physicians, and it's not only good for the hospital, it's good for the entire region."
Hammond then went on to speak about a software program that would allow the hospital to manage their allowable costs versus Medicare patient days ratio on a daily basis.
"At the next board meeting I'm going to present a proposal from one of the top 20 accounting firms in the country that is for a program specifically designed for critical care access hospitals to watch this important ratio in a real-time basis," said Hammond. "It will show us how to adjust each day to maximize our opportunity with the cost reimbursement. The whole package with all the bells and whistles is $53,000 a year, including a cost report. And these cost reports are expensive. They run around $8,000 for each report that is completed. The eleventh commandment of healthcare is medicare giveth and medicare taketh away, and we have experienced both at this hospital, which is another reminder of how important it is for us to manage that ratio of allowable costs to medicare patient days."
The discussion next moved to the issue of parking at the renovated clinic. It was suggested that some additional parking be created adjacent to Dr. Kauffman's old building.
"There's probably ample room for 20 vehicles out there, and we could ask the county if they could grade it for us, and that would really help us out," said Roork. "Griffin has also been gracious enough to offer some employee parking down in his clinic parking area. About 10-15 people can park down there along the edge. On a well managed schedule, that should work well for us."
Next on the agenda, Hammond addressed rumors that have circulated regarding the number of full-time employees at the hospital. "I have heard some rumors and complaints to the contrary, but our full-time employees, not including vacation and sick hours which is a true reflection of the amount of work going on at the hospital, has remained steady for the past eight or nine months," said Hammond. Statistics presented by Hammond reflected a steady number of between 126 and 127 full-time employees over that time period.
Finally, hospital COO Tammy Friel updated the board members on the implementation of the hospital as a level 4 facility in the state's new trauma system.
"Arkansas is the only state that doesn't have a trauma system in place," said Friel. "About two years ago they started working on initiating one and about nine months ago we started an application to become a level 4 trauma center. We also made a separate application for our ambulance service. This past month we received $25,000 for the hospital and $9,413 for the ambulance service. That money is going to be used for the training of the physicians and the nurses in the emergency room and the EMS personnel and it can also be spent on equipment. All physicians working in the ER will be required to be ATLS certified, which is Advanced Trauma Life Support, and all the RNs working the ER have to take a trauma nursing course. In about a year from now, the Arkansas Department of Health will come and inspect us to see if we meet all the criteria to become a level 4, and if we haven't, then they'll make recommendations at that time. Each year, there will be money allotted by the state for training to keep us certified at a level 4, and most critical care access hospitals are applying as level 4's. There is currently not a level 1 trauma center in the state. UAMS is working towards becoming one, and Children's Hospital is looking to become a burn trauma center. The other hospital's applying as level one's are St. John's in Springfield and The Med in Memphis."
The next meeting of the hospital's Board of Governor's will be held on Monday, June 28 at 7 p.m.
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