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Friday, May 6, 2016

Fulton County Hospital board discusses staff cuts, partnership

Thursday, September 8, 2011

The Fulton County Hospital Board faced a long night when it met on August 29, hearing from two companies who specialize in turning around "distressed" hospitals, and meeting with department heads about staff reductions and spending cuts.

Department heads were previously asked to prepare job descriptions for their employees and determine what positions can be cut, as the board looks at staff reductions as one way to reduce expenses and deal with its debt issues.

Much of the meeting was done behind closed doors as the board went into executive session, calling department heads in, one by one, to discuss their recommendations.

The meeting began with attorney Jim Short telling the board that talks with Baxter Regional Medical Center and Ozark Medical Center are "coming along."

Both hospitals have expressed an interest in leasing the Fulton County Hospital or entering into other partnerships that could benefit both entities.

"I don't know if you want to set some sort of a deadline (for proposals)," said Short. "One of them is probably going to be able to make us some sort of a firm proposal within the next couple, three weeks."

The board responded that it did not want to receive any offer until it has a Sept. 6 meeting with its accounting firm, to receive an in depth analysis of the hospital's financial problems and its recommendations to insure that the hospital continues to serve the county.

Frontier Health and Quorum Health Resources, two hospital management specialists, made presentations about the services they provide.

Frontier Health is a small company that specializes in stepping in and turning around struggling rural hospitals.

"We immerse ourselves here and become a part of it," said James Stenger. "Let's build this place to where it needs to be and correct what the problems are."

Stenger added most of the hospitals they take over are facing massive debt and are days from closing when they enter the picture.

"What we have heard right here (the financial report) is one of the best case scenarios," said Stenger, indicating other hospitals the company has taken on have had worse problems.

Frontier Health CEO David Burns told the board to be cautious about allowing a larger hospital to take over operations.

"Another big hospital may be looking at you, Baxter, I think, may be one of them. Be careful," Burns warned. "The only thing most of them are looking for is how many of your patients they can get to Baxter."

Quorum Health Resources, a large Tennessee based hospital management company, analyzed public records regarding area hospitals before making its presentation.

Cindy Wise showed graphs indicating that patient admissions at the White River Medical Center had held steady over the past two years and Baxter Regional admissions were "declining," while OMC had increased its admission numbers.

"But look at Fulton County," Wise said. "You've lost 42 percent of your admissions in the last two years."

Wise said she understood that much of the decline could be blamed on the loss of a physician at the hospital, and that OMC was apparently taking patients from the hospital.

Wise also showed that, while the three other area hospitals had increased their rates, Fulton County Hospital charges had actually gone down.

"We need to look at some charges (at your hospital)," Wise suggested.

Wise said, for a free standing, independent hospital to survive, operational basics have to be right.

Having the right size staff, improved collection from departing patients, better collection of "bad debt," adding revenue generating services and having physicians that admit patients and "are going to grow and bring patients in," were identified as things Quorum Health would concentrate on if it was called on to manage the hospital.

The Quorum Health representatives offered to send a team of its employees to the hospital to review financial records and hospital operations.

The company would then present a report of its recommendations, and ask the board to consider hiring it to operate the hospital for a monthly fee.

"We have no intention of leasing the hospital," said senior vice-president Bill Donatelli. "We want board control to continue."

Board members asked questions after hearing the presentations, but took no action.

While the board has indicated it wants to hear from any interested parties, Baxter Regional and OMC have signed agreements with the board, giving them the first right to negotiate with the hospital.

In other business, the board heard the July financial report.

Since the board terminated administrator Joe Hammond and became more actively involved in day to day operations, accounts payable, or bills the hospital owes, have dropped from $650,000 to $484,000.

"We paid some bills today and we've gotten them down to $484,000, so we are trying to pay our bills, as we get money in," said Denice Innis, of the Finance Department.

Innis said the hospital had $110,000 in its checking account, as of Aug. 29, and expected to have $200,000 by the end of the week.

It appears that money will cover the next payroll and federal taxes, but leave little in the bank.

There was good news regarding a problem the board discovered after taking control.

$400,000 worth of patient bills had not been submitted because physicians were behind on their "charting" -- filling out patient information that allows bills to be sent.

According to Hospital Chief of Staff Dr. Rebecca Phillips, the backlog has been reduced by 75 percent.

As of last week, only about $106,000 in patient charges were waiting for physician paperwork to be completed.

At an Aug. 19 special special meeting, the board expressed concern that the hospital was operating a self-insurance health plan for its employees. There was worry that such a plan was a gamble and that switching to a traditional plan with a private insurer may be cheaper.

At the Aug. 29 meeting, board president Jerry Estes indicated he had received clarification on the hospital insurance plan, after doing some investigation.

According to Estes, the hospital is only partially self-insured, as a "stop-loss" insurer picks up a good portion of claims.

Estes said the board may still want to consider health insurance options, but he had been advised the hospital should not discontinue its current plan.

That is because, it may take up to four months to switch to a traditional plan and the hospital would be totally liable for all employees claims during the transition period.

Estes added information he received appears to indicate the hospital has saved money the past two years with the partially self-insured plan, and switching to Blue Cross would likely cost more than the hospital is currently paying.

The board agreed to continue under the current plan, and to invite insurance specialists to speak at a future board meeting.

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