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Thursday, May 5, 2016

Fulton County Hospital fires administrator, faces financial hurdles

Tuesday, August 23, 2011

Photo/Richard Irby The Fulton County Hospital Board discussed mounting financial problems with department heads on Wednesday, Aug. 10. The board said it was dedicated to keeping the hospital open. It asked for help in cutting expenses and staff, as it seeks to determine whether Ozark Medical Center or Baxter Regional Hospital were interested in a "partnership," in which one of the larger medical providers would lease and operate the hospital.
Fulton County Hospital Administrator Joe Hammond is out, emergency measures to cut spending are in and talks with larger area hospitals about a partnership are around the corner.

Drastic action is being taken by the Fulton County Hospital Board of Governors to address financial problems that threaten continued operations.

August 9

Special Meeting

During an August 9 special meeting to discuss mounting financial problems, the board voted to dismiss administrator Joe Hammond.

The hospital lost $1.2 million in the 2009-2010 Fiscal Year and $1.3 million in the 2010-2011 Fiscal Year, which ended June 30.

Administrator Hammond had proposed a 2012 budget which hoped to reduce losses by $500,000, to $766,000.

The special meeting began with President Jerry Estes calling for Hammond to give a report on recent issues, which included problems making the first August payroll.

Before Hammond could make his report, board member Danny Perryman made a motion to go into executive session and the full board agreed.

After a short session in private, board member Bill Pace immediately spoke up. "Mr. Chairman, I make a motion that Joseph Hammond's employment with the Fulton County Hospital be terminated immediately."

Jerry Blevins seconded the motion and Hammond was ousted as Pace, Blevins, Perryman and Darrell Zimmer supported the motion.

Board member Sue Hertzog voted against Hammond's termination and Dr. Jim Bozeman abstained.

"I wish you the best of luck," Hammond said as he stood to make his exit.

As the meeting continued, Pace explained his belief that Hammond had hurt the hospital by failing to reign in spending.

According to Pace, the hospital owes hundreds of thousands of dollars to vendors who have waited more than 90 days for payment.

"When you don't pay your bills for two or three months and not another lender will take on a line of credit from you, we're just ruined financially. We're ruined," said Pace.

Perryman also blamed Hammond for hospital financial problems.

"As direct as we could (we tried) to tell him we have to cut payrolls, we have to cut expenses, something had to be done. He absolutely defied us in that," said Perryman.

Perryman criticized Hammond for failing to promptly notify County Judge Charles Willett and board members that the hospital did not have enough money on hand to meet the most recent payroll.

It was not until county government advanced its sales tax allotment and it used the remainder of a bank line of credit, that the hospital had enough money to issue paychecks.

Perryman called for immediate action to reduce spending.

"I think the first thing we need to do is pass the word to these departments and department heads to get their manpower streamlined and get this payroll cut back. We need to have a budget that balances, at least," said Perryman.

President Estes was frustrated that the board voted to dismiss Hammond before he was able to give his report, to update what he had done to address the financial crisis.

Denise Innis of the Finance Department was asked to confirm that some employees had been "let go" last week.

Innis said she was not sure of the exact number, but listed two or three employees dismissed in Admissions, one in Central Supply, one in Medical Records, one in Maintenance and a part-time "filer."
During the meeting, the board voted to ask department heads to furnish job descriptions of their employees and recommend positions that can be eliminated by August 22.

Another major topic of the meeting was whether the board should contact Ozark Medical Center in West Plains and Baxter Regional Medical Center in Mountain Home, to discuss whether they had any interest in leasing the hospital and running it in a "partnership" with the board.

"I have been on this board a little over two years. One month we were in the black. Every other month, we have been in the red. We've struggled, we've fought, we've scratched...It is my opinion it is time for us to discuss these things (a partnership)," Estes said.

Board member Hertzog agreed saying, "I think we've tried everything and we're still having trouble. I think the only choice is to go with another hospital, myself."

While the board voted to ask the larger hospitals for proposals, members said they would want limits on any lease agreement.

"I hope we are talking partnerships and not takeover here," said Perryman.

"I, for one, will not turn this hospital over totally to another facility for them to run without us having some say over it," said Blevins. "Normally, they take over a small hospital. They run it for three or four months and then they shut it down and then they're rid of it."

As the board seeks a new administrator and discusses possible partnerships, it faces some big immediate challenges to keep the hospital going.

When asked if she expected any "cash shortfall" when it comes time to meet the late August payroll, Innis said there could be difficulty but, at a special board meeting on Friday, August 12, Innis expressed optimism there would be funding to meet the August 19 payroll.

In addition, Innis told the board the company which processes payments for Medicaid and Medicare in our area is "changing their forms" and further reimbursements to the hospital may be delayed until after January.

"So we've got from August through December without any help from Medicaid?" asked Pace.

Innis said that was her un-derstanding, but she would "check and confirm what the auditors suggest on that."

Since more than 80 percent of all hospital patients pay through Medicaid or Medicare, payment delays would be a major problem for the cash strapped facility.

August 10

Special Meeting

On Wednesday, August 10, the hospital board met with department heads to announce Hammond's termination and the need for them to look for ways to cut expenses and reduce their number of employees.

"Fulton County Hospital is not...shutting its doors," President Estes told the employees. "This board is dedicated to the continued operation of this hospital."

Estes went on to say work to reduce spending will continue, the board will look for a regional partner to help bring financial stability to the hospital and will try to identify new services that will improve health care and bring in new revenue.

Department heads indicated one way to save money was to send employees home when patient levels do not require them to remain on the job.

Employees often are reluctant to leave, however, because, if they drop below a certain number of hours, they could lose their insurance benefits.

The board indicated it would look into that issue.

Board member Perryman asked for department heads to help them stop waste and identify jobs that can be cut.

"Our payroll is absolutely choking us," said Perryman. "I think we'll pull out of this, but we have to be partners."

August 12

Special Meeting

On Friday, August 12, the hospital board held its third special meeting of the week.

President Estes announced that both Ozark Medical Center and Baxter Regional Medical Center "indicated very much interest in partnering with us."

The board was asked to sign Confidentiality Agreements with both hospitals, agreements which would allow the hospitals access to financial records and other information regarding the Fulton County Hospital.

After much discussion, the board voted three to two to immediately sign the Confidentiality Agreements. It also agreed to hire Salem attorney Jim Short to serve as the hospital's agent, to work directly with the two other hospitals as they put together proposals for a partnership.

Short is needed to serve as a "go-between" the board and the hospitals, since the hospital no longer has an administrator.

Estes requested immediate action since it could take 60 to 90 days for the hospitals to make proposals, and he wants them to get started on their work as quickly as possible.

Board member Perryman expressed concern that, without major spending cuts, it will be hard to keep the hospital "liquid" until October or November.

"Our (financial) numbers, right now, show we've got to start now to reduce expenses to meet income," said Perryman.

Innis expressed certainty that there will be enough funding to meet the August payroll, and Estes said suggested spending and staff cuts should be compiled by September 6. That is the date the hospital's accounting firm will meet with the board and recommendations.

Since the hospital board must now be closely involved in day to day operations, more special meetings will probably be needed before August 29, the next regular board meeting.

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