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Hermann Area District Hospital Board of Director’s February 2019 Meeting Recap

February 25, 2019

The Board of Directors met in regular session with a group of employees and community present to hear discussion and offer input concerning the financial status of the hospital.  The Board reviewed January 2019 utilization.  Inpatient admissions were up 40%, surgery was up 58%, rehabilitation therapy services were up 16%, Hermann clinic visits were up by 12%, and patients admitted to the hospital through the emergency room were up by 68% all as compared to January 2018.  All the increases translated into gross revenue for January of almost $3 million, which exceeded every month in 2018.  This was due to the hard work of our doctors, providers, and support staff.

In contrast, for the year ending December 31, 2018, our pre-audit loss was $1,200,000 as compared to the audited loss of 2017 of $880,000.  The hospital and clinic gross revenue for 2018 was down by $2 million as compared to 2017.  The inpatient services were up by $800,000 while outpatient and clinic revenue were down by $2.8 million.  Medicare, Medicaid, insurance adjustments, bad debt, and charity care reduce the gross revenue by almost half so net revenue before expenses are $15.5 million.  We cut expenses in 2018 by over $700,000 mostly in salaries and purchased services.  Billing staff continues to work towards enhanced collections.  Days of cash in accounts receivable are back in line with other hospitals, we continue to have reports that other hospitals have been able to submit patient bills earlier than our hospital.  We will work with Cerner to enhance our collections efforts.  The Board questioned the amounts written off for collections in February which are the amounts due from patients.  Due to Health Insurance Portability and Accountability Act, HIPAA regulations, the Board is not authorized to see individual patient accounts, staff will bring back answers to their question next month.

Landmark is the appraisal firm that was engaged by the City of Hermann to conduct the appraisal of the Hermann Medical Arts building on West 6th Street, for the FEMA buyout.  Since last month, Landmark updated their appraisal at the city’s request to be based on pre-flood condition since the one released in December was inappropriately based on post –flood conditions.  The change in approach raised the appraisal by $78,000 up to $432,000.  The Board requested that prior to accepting the appraisal that administration check on other funding to replace the flooded facility.

The Board reviewed the current status of the efforts to improve the organizations net income.  Don Kalicak, who is helping us with our community assessments, has conducted 18 interviews.  Several people were very supportive of the hospital’s swing bed program and the outpatient rehabilitation therapy services.  He hopes to get a report back to the board in a couple of months.  Efforts to date through some revenue volume increases and mostly expense reductions should yield about $1.2 million dollar in changes or put the hospital and clinics at breakeven next year.  We are having to replace some staff in areas where resignations have left critical positions vacant like registered nurses and registration.

The Board recognized that last year employees donated $5,200 back to the hospital.  These donations are put in a fund which is used to enhance the facility.  In addition Hospital Services Group, the hospital association’s liability insurance carrier donated $1,000 in a matching donation.  Through the generosity of the Hospital Auxiliary new mannequins were purchased to improve CPR training for staff.  The Board declared the hospital’s old mannequins as excess property and authorized giving them to the Washington LPN School.  In monitoring Missouri proposed legislation, it appears that the prescription drug monitoring program could pass this session so Missouri would join all the other states in having a program that will effectively let doctors know what controlled medications a patient has received to avoid duplicate prescriptions.  The Board received notification from the City of Hermann that the city will have a proposition regarding street upgrades on the upcoming ballot.  The Board reviewed a grant proposal from the Missouri Department of Economic Development to explore ways to reduce to energy consumption of the hospital.  The Board requested that administration work with the Department of Economic Development to see if their proposal has merit.

Eric Eoloff, President of Mercy Washington, gave an update on activities in Washington.  Both their patient floors and emergency room have been very busy with patients with RSV and respiratory virus.  They still are having to utilize agency nursing staff.

Karin Wolking, RN, Home Health Clinical Director, gave a report that while activity was good in 2018 that January’s activity fell off by around 50%.  Part of the drop was due to a shortage in physical therapy staff which kept the agency from accepting some patients.  Home Health staff is well below staffing benchmarks so we were able to hire an LPN to assist with visits.

February was the month where Medical and Allied Staff bi-annually renew their staff privileges.  Based on Medical Staff recommendation the Board approved 71doctors and 11 allied staff.  In addition the Medical Staff voted Michael Rothermich, M.D. as President of the Medical Staff, Donald Swayze, D.O. as Vice-President, and Michele Neblock, M.D. as Secretary-Treasurer.  In addition the Board appointed Pietor Los, CLS, as Infection Preventionist.

The Board approved three contracts.  The first being a no direct cost agreement with the Hermann EMS Training Entity to assist in training EMTs.  Secondly the Board approved working with Hermann Family Drugstore along with other area pharmacies to lower the cost of medications.  Lastly the Board approved an agreement to maintain the radiology Picture Archive System which electronically stores images for slightly under $29,000 annually which hospital staff was able to reduce by $10,000 from the prior year.

The Board held a roll call vote to go into executive session to discuss personnel issues.  The Board took no action in the executive session and voted to come back into open session and then adjourned.