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Home My WebLink About2003-0715 Hospital Board AGMHOSPITAL BOARD ANNUAL GENERAL MEETING AGENDA Tuesday, July 15, 2003 at 7:00 p.m. Council Chambers, 1175 E. Main Street I. PLEDGE OF ALLEGIANCE II. ROLL CALL IH. STATUS OF ASHLAND COMMUNITY HEALTHCARE SERVICES BOARD REPORT IV. OPERATIONAL/FINANCIAL UPDATE V. ITEMS OF INTEREST VI. ADJOURNMENT Copies to Hospital Board Members JULY 2003 PRESENTATION TO ASHLAND CITY COUNCIL Focus on challenges to our hospital and in most cases, to all hospitals for: A. Financial Concerns B. Operational Concerns II. Financial Concerns: - Nearly $67M in charges - Over $32M in write-offs - Medicare = Over $20M - Medicaid = Over $3M Commercial = Nearly $7M - Bad Debt = Over $1.3M - Charity = Nearly $.5M - We and most all hospitals are paid well below our true costs for Medicare and Medicaid. - This trend is continuing and accelerating Fund Medicare Prescription Drug Bill as $130,000 a year reduction to us for 10 years proposed by the House : Outpatient tweaks of the APC's, just eliminating the C-Codes for high cost, high tech supplies like pain pumps and spinal cord stimulators is a $100,000 annual reduction to our hospital. These and other cuts coming on the heels of the Balanced Budget Act which reduced our Medicare payments $.5M for five years in a row. - Medicaid / Welfare (State of Oregon) - March 1st, cuts yielding over $.5M per year: 12% across the Board - Presumptive Eligibility - Outlier Eliminations More cuts in new budget If Type B funding = another $.5M to $1M per year payment reduction In Salem on June 6th, Senate Bill 540 referred to Ways and Means. - 100 OHP Standard patients would be paid in this priority: physician, prescription drugs, laboratory, X-ray services, medical supplies, mental health, chemical dependency, dental services, other services required by law, hospitals paid last. We estimate savings to the state of $104M and that cut plus the $150M federal matching - $254M in reductions in payments to Oregon hospitals at a minimum. This Bill, if approved, will result in a $550 reduction to us per year as a result of OHP Standard lives not covering hospital payments. - Both Regence BXBX of Oregon and Associated Oregon Industries recognize the impact this will have on Oregonians. - Reduction in coverage - Increased premiums on top of high deductibles - More Uninsured Workers - Oregon Hospitals Overall CY 2002 vs. 2001 Pt Days Rose 2.9% Medicare Admissions Rose 7.6% Medicaid Admissions Rose 6.7% Self Pay Admissions Rose 9.6% - All Oregon Hospitals CY 2002 vs. 2001 -Bad Debts "h 17% -Charity /h 38.57% = $107.7M Oregon hospitals are struggling under these wave after wave of reductions, a slow economy and increased uninsured seeking care in our Emergency Departments. But that's just an overview of our financial issues. Operational Issues: - BXBS and the Health Insurance Association of America both anticipate drug expenditures will at least double from 1999 to 2004 ($105B to $212B). HCFA forecasts total spending for drugs will be $336~ in 2010. Those $ have to come from basically flat or capped programs. Chronic disease care consumes 75% of healthcare spending today~ $774B in 2000. Its projected to be $1.07 Trillion by 2020 or 80% of healthcare spending. - Hospitals lack capital to expand. Long-term debt per bed in the US is up 74% since 1993, i.e., many hospitals cannot borrow more. We may be pursuing our first significant debt load in 25 or 30 years to help finance our next major decision. - Information Technology is in its infancy and the demands for information will drive up costs. This is an endless pit of spending and people like me wonder when the return will pay off in real dollars. - We'll expend $1M on a computer upgrade and training this calendar year. - Information as to what doctor or hospital we as consumers choose will be based on outcomes available on the internet. Communications between doctors and patients via the internet will increase, as will communication and the transfer of information to insurance companies and government payors will also increase. 2-Professional liability crises is not if at all. going away soon - MD's retiring early or dropping services. ED call coverage will grow as a concern for both hospitals and physicians. - Employee health insurance costs will continue to rise and employees will be looking for higher deductibles and copays to keep health insurance. 2003 is the year many employers are saying "This is our last year we can absorb double digit increases in our premiums." During the past 5 years, employer costs in the US rose 50%. 100% in the last four years. Ours increased Patient Safety and Quality is a growing factor in our planning and spending. in our Hospital Boards across the country 4 most critical issues - Physician alliances and arrangements - Long-term strategic planning .- - Quality of care and patient safety - Employee recruitment and retention - Uncompensated care will increase, especially in outpatient Medicare - 62% of Hospitals in the US are at or over capacity. We certainly are .... and these include urban, rural, teaching, etc. - Access to charity is closing in the US, raising in Jackson County .... VOLPACT created by the Jackson County Medical Society. - Disease management is becoming a growth industry. Keep chronic patients healthier and out of hospitals. Use the internet to communicate with physicians and others. - 46% of hospitals plan to increase beds (2/3 in rural areas/h beds) Medical Malpractice rates will effect OB/GYN and anesthesia lacking. residency training with neurosurgery, Workforce - Oregon hospitals in September 2002 reported -1700 unfilled RN positions - 117radtech Shortage of physicians What do we do about these reductionsA ,~,nd' c,6'o//e_,~d~- 2 We do what we always do .... initiate new services that are recognized as needed by our medical community and our customers, our patients. New and expanded services begin with physician skill sets. Toward that end, our community is talking to a wide variety of physician specialties about coming to Ashland, e.g., Pediatrics, OB/GYN, Neurologist and Neurosurgeon, Orthopedics, Plastic Surgery, Oncology, Family Practice and Psychiatry. New services, drawing new residents to our medical staff and increasing utilization, have offset the payment reductions of the past. We look forward to yet another good year for our community hospital and for our medical staff. ///~ ¢, ~-.,,'~ Thanks for your time to receive our report. Ashland Community Hospital City Council Presentation Tuesday, July 15, 2003 Michael S. McGraw, CFO Ashland Community Hospital had a fairly good year, even with substantial reductions from Medicare and Medicaid. Utilization continues to increase: - Inpatient Census grew by 4% (233 Pd) - New Borns grew by 22% (107) - Surgeries & Special Studies Grew By 13% (626) - Outpatient Census Grew by 16% (7757) Ashland has had a steady pattern of growth in utilization over the last 3.5 years. In order to support this growth in utilization we have added 70 new employees over the same period of time. (227 6/30/00 to 297 6/30/03) Last year the hospital had Capital Equipmentpurchases of close to 1M dollars. - Needed equipment to keep pace with technology and replacement. Ultrasound Machine - $150,000 · Video Gastroscope- $ 20,000 · Radiology Viewer Units- $ 43,000 · 10 Patient Beds - $150,000 · Monitors- $12,000 · Anesthesia Machines (3) $ 90,000 In addition, the hospital invested in new brick and mortar to house a new MRI Service. (700K B&M & 600K MRI). The hospital has also undertaken the conversion to a new 700K medical computer system to keep pace with information storage. The hospital has attempted to maintain a debt free operation. Today the only debt the hospital is facing is its PERS obligation which has yet to be determined. Article 3 Section 1.6.3 of the Definitive Agreement requires the hospital's WC to be maintained at a ratio of no less than 2:1. At the present time its ratio is 5:1. After 23 years at Ashland Community Hospital this will be my last presentation. Retirement- Thank the council for maintaining a city that is a joy to live and work in. RECEZVED: 7/14/03 9:53AM; ->OREGON SHAKESPEARE FESTZVAL; #948; PAGE 07/14~i-~7~3 08'52 FAX 5414887417 ACH ADMIN 002 ASHLAND COMMUNITY HEALTHCARE SERVICES ANNUAl_ REPORI 2003 Increase in number of physicians in Ashland 2 Pathologists 1 Ophthalmologist (RetinaNitreous) 4 Family Practitioners I Emergency Room Physician I Gastroenterologist 7 Radiologists 2 Anesthesiologists MRI Suite Addition Approved the Construction of 10 Private Medical/Surgical rooms Satellite Laboratory Drawing Station Oregon Business Magazine Number 3 in the 100 best places to work- 2002 Number 14 in the 100 best places to work- 2003 Approved Employee Assistance Plan Employee Competency Report Employee Wage/Benefit Package surVived implementation of HIPAA · Currently implementing Meditech (electronic clinical system) · Approved FY 2003-2004 Budget and approved New Auditors Strategic Plan Update Women's Imaging Center Bariatric Surgery Oncology Services Pediatric Unit Diabetic Education Program Residential Hospice House · Board By-Laws Revisions · Three New Directors · New Board Officers · Providing Shuttle services for employees and physicians' offices · Peggy Cockrell Memorial Garden