Loading...
HomeMy WebLinkAbout2009-0721 Joint Council/ACH MIN Annual Joint Meeting of Council and Ashland Community Hospital Board of Directors July21,2009 Page] of3 MINUTES FOR THE ANNUAL ASHLAND COMMUNITY HOSPITAL MEETING , ASHLAND CITY COUNCIL July 21, 2009 Council Chambers 1175 E. Main Street Mayor called the meeting to order at 6:45 p,m. Councilor Voisin, Navickas, Lemhouse, Jackson, Silbiger and Chapman were present. Marie Donovan, Board Chair of the Ashland Community Hospital presented the annual report of the Board of Trustees. She stated that the past year has been focused on the hospital's financial challenges and the change initiative involving Wellspring Partners, Wellspring Partners has helped with the identification and implementation of approximately $6 million in annualized savings. In addition, discussions with the Board and Committees have included the following: . Revised role and responsibility statement for Board members . New committee structure and composition . Revised committee charters . Revised Board meeting agenda with increased focus on strategic planning, quality, and financial outcomes . Revised policies related to confidential and conflict of interest, and . New processes for Board self-evaluation and evaluation of the Chief Executive Officer As part of its governance initiative, the Board implemented two changes in Board membership, The Immediate Past Chief of Staff is now an ex-officio voting member of the board and the hospital's Chief Executive Officer has been defined as an ex-officio member with voting privileges. These changes are consistent with governance trends, Ms, Donovan noted that two Board members completed their terms on the Board: Doug Morrison and Dave Bernard and noted the appreciation of their years of service, Two new members were recently appointed to second four-year terms: Marie Donovan and Marty Lenk, The Board's Development Committee will be recommending a slate of officers to the Board for consideration at the July 28 meeting. Mark Marchetti, CEO of Ashland Community Hospital presented his portion of the annual report and noted that it had been a year of significant challenge and change for the organization. Mr. Marchetti provided statistical information on the care provided by the hospital and noted that a net patient revenue of approximately $49 million after deductions for contractual adjustments, charity care and bad debt. These deductions equaled 49% of total revenue, up from prior year's deductions of approximately 48%. This is a continuation of an upward trend over the past 5 years and reflects the hospital's growing reliance on reimbursement through the Medicare program. Annual Joint Meeting of Council and Ashland Community Hospital Board of Directors July 21, 2009 Page 2 of3 Total operating expenses for the year were approximately $50.5 million which resulted in a loss from operations of $1.5 million. Due to increasing financial pressures, Ashland Community Hospital (ACH) initiated in 2008, with the assistance of Wellspring Partners, an analysis of all aspects of the hospital's operations including labor and productivity, clinical and non-clinical supplies, contract services, physician services, third-party payor contracts, service lines and programs, and charge capture, billing and collection processes. As a result of this initiative the hospital's Memory Care Center and Outpatient Physical Therapy service was closed. Total staffing was reduced by 40 FTE's, vendor contracts were renegotiated and supplies usage was scrutinized. A wage freeze was implemented and the hospital's match to the 403-B employee retirement plan was eliminated. Issues related to wages and retirement plan contributions will be reevaluated by the Board of Directors later this year. The formal phase of the hospital's change initiative ended in March of this year which identified total annualized savings of approximately $6 million, The following key indicators of success were met: . Productive FTE's per Adjusted Patient Day dropped to 6.02 compared to 9.0 at the start of the project in July 2008 . Supplies cost as a percent of net revenue dropped to 18% from 23% . Days of revenue in accounts receivable reached 60 days, down from a high of 85 days . Use of high cost agency labor declined by almost 50% . Total average registration wait time dropped to 4 minutes . Patient account write-offs, defined as avoidable, declined by 80% Mr. Marchetti also noted that change is not easy or inexpensive and that the hospital had incurred one-time expenses related to consulting fees and restructuring costs of $2.5 million. He noted the positive financial position of the hospital and the confidence that the changes made over the past year has positioned the hospital to better meet the challenges in the months ahead. The 2009-10 budget was approved by the Board of Directors with operating expenses of approximately $46 million and a 3% positive operating margin. The budget incorporates productivity benchmarks and financial indicators defined through the hospital's change initiative. The following changes over the past year were noted: · Additional physicians were added to the medical staff in areas of gynecology, radiology, hospitalist services, podiatry and urology . New digital mammography equipment was purchased . The hospital's utilization management program was enhanced . Processes for quality monitoring and reporting was redesigned . A self-insured plan for employee health benefits was implemented, replacing the hospital's participation in the City-County Insurance Trust Annual Joint Meeting of Council and Ashland Community Hospital Board of Directors July 21,2009 Page 3 00 . The Health Resource center was opened, providing patients, visitors and the community with ready access to reliable health information . A new Medical Director and Program Manager were appointed to the hospital's Wound Center, and . Planning has begun for an automated time and attendance system The hospital has continued its evolution toward the Planetree model of patient-and family-centered care which strives to personalize, humanize, and demystify the hospital experience. The Planetree model was adopted by the Board of Directors in 2006 and is a key strategic imperative of the hospital. Recent accomplishments towards the creation of a more patient-centered environment were noted. In conclusion Mr. Marchetti stated that the hospital remains committed to the support of education and training for its staff and to the community. The greatest reflection of the hospital's mission to the community was the provision of approximately $9.4 million in uncompensated care in 2008-09, including $1.4 million in charity care, $2.7 million in bad debt write-offs, and a $5.3 million shortfall in payments through the Medicare program. Council voiced their appreciation to the Board of Directors and the care that is provided to the community by the hospital. was adjourned at 7:00 p.m. ~ Barbara Christensen, City Recorder " Ashland Community Hospital Annual Report to City Council July21,2009 Marie Donovan, Chair .-.---....., Good evening. I am Marie Donovan and I am the Chair of the Board of Directors of Ashland Community Hospital. Much of the work of the hospital Board over the past year has focused on the hospital's financial challenges and the change initiative undertaken with the help of Wellspring Partners, a healthcare consulting firm. The Board of Directors engaged Wellspring Partners in the summer of2008 at the recommendation ofthe hospital's senior leadership to help focus the organization on process redesign and change implementation necessary to better meet the challenges of a very difficult and complex industry. I am happy to report that this initiative has been successful, with the identification and implementation of approximately $6 million in annualized savings. In addition to assistance with operational issues, Wellspring Partners engaged the Board and its committees in significant discussions related to governance. Outcomes of these discussions include: Revised role and responsibility statement for Board members New committee structure and composition Revised committee charters - Revised Board meeting agenda with increased focus on strategic planning, quality, and financial outcomes - Revised policies related to confidentiality and conflict of interest New processes for Board self-evaluation and evaluation of the Chief Executive Officer As part of its governance initiative, the Board implemented two changes in Board membership. The Immediate Past Chief of Staff, who has attended Board meetings as a guest, is now an ex-officio voting member of the Board. Similarly, the hospital's Chief Executive Officer has been defined as an ex-officio member with vote. These changes are consistent with governance trends occurring throughout the hospital industry. With the designation of the Past Chief of Staff and Chief Executive Officer as members of the Board, no additional members are needed at this time. lof2 In June, two Board members completed their terms on the Board: Doug Morrison and Dave Bernard. The Board is grateful for their years of service and they will be missed. Two Board members were recommended to the City for appointment to second four-year terms: Marie Donovan and Marty Lenk. I would like to thank Council for their action on this recommendation, The Board's Development Committee met earlier this month and will be recommending a slate of officers to the Board for consideration at the July 28 meeting. With me this evening is Mark Marchetti, Ashland Community Hospital's Chief Executive Officer, who will provide a more detailed overview of the state of our hospital. 2 or 2 I Ashland Community Hospital Annual Report to City Council July 21,2009 Mark E, Marchetti, CEO June 30th marked the end of another fiscal year for Ashland Community Hospital. It was a year of significant challenge and change for the organization. Service volumes for the year were generally strong, outpacing prior year volumes in many areas. For the year ended June 30, Ashland Community Hospital: Admitted 1,813 patients Provided 6,542 days of inpatient care Delivered 362 babies Completed 4,031 surgeries and special studies Treated 9,957 patients in the Emergency Department Registered 60,412 outpatients Made 7,874 home health visits Provided 11,986 days of hospice care The hospital generated net patient revenues of approximately $49 million after deductions for contractual adjustments, charity care and bad debt. These deductions equaled 49% of total revenue, up from the prior year's deductions of approximately 48%. This is a continuation of an upward trend over the past 5 years and reflects the hospital's growing reliance on reimbursement through the Medicare program. Total operating expenses for the year were approximately $50.5 million. This resulted in a loss from operations of $1.5 million. In response to increasing financial pressures, Ashland Community Hospital initiated a major change initiative in the summer of 2008. Undertaken with the assistance of Wellspring Partners, a nationally know healthcare consulting firm, the initiative involved a careful analysis of all aspects of the hospital's operations including labor and productivity, clinical and non-clinical supplies, contract services, physician services, third-party payor contracts, service lines and programs, and charge capture, billing and collection processes. lof5 As a result of this initiative the hospital's Memory Care Center, an adult day program for dementia patients, and Outpatient Physical Therapy service were closed. Total staffing was reduced by 40 FTE's, approximately one-third of this through attrition. Vendor contracts were renegotiated and supplies usage was scrutinized. A wage freeze was implemented and the hospital's match to the 403-B employee retirement plan was eliminated. Issues related to wages and retirement plan contributions will be reevaluated by the Board of Directors later this year. The formal phase of the hospital's change initiative ended in March of this year. Overall, the initiative identified total annualized savings of approximately $6 million. Key indicators of success were met: _ Productive FTE's per Adjusted Patient Day dropped to 6.02 compared to 9.0 at the start of the project in July 2008. - Supplies cost as a percent of net revenue dropped to 18% from 23%. - Days of revenue in accounts receivable reached 60 days, down from a high of 85 days. - Use of high cost agency labor declined by almost 50%, - Total average registration wait time dropped to 4 minutes. - Patient account write-offs, defined as avoidable, declined by 80%. Of course, change is neither easy nor inexpensive. In 2008-09 the hospital incurred one- time expenses related to consulting fees and restructuring costs of $2.5 million. On a positive note, the hospital's financial position has begun to turn around with positive margins in three of the past five months. Furthermore, we are confident that the changes made over the past year have positioned the hospital to better meet the challenges in the months ahead, For the new fiscal year 2009-10 the Board of Directors has approved a budget with total operating expenses of approximately $46 million and a 3% positive operating margin, This budget incorporates productivity benchmarks and financial indicators defined through the hospital's change initiative. 20f5 .. While the hospital's change initiative occupied much time and energy over the past year, the hospital continued to evolve to meet the needs of patients, physicians and the community. - Additional physicians were added to the medical staff in the areas of gynecology, radiology, hospitalist services, podiatry, and urology. New digital mammography equipment was purchased. The hospital's utilization management program was enhanced. Processes for quality monitoring and reporting were redesigned. A self-insured plan for employee health benefits was implemented, replacing the hospital's participation in the City-County Insurance Trust. - The Health Resource Center was opened, providing patients, visitors and the the community with ready access to reliable health information. - A new Medical Director and Program Manager were appointed to the hospital's Wound Center - Planning was begun for an automated time and attendance system. Throughout all of this, the hospital continued its evolution toward the Planetree model of patient- and family-centered care which strives to personalize, humanize, and demystify the hospital experience. Adopted by the Board of Directors in 2006, Planetree remains a key strategic imperative of the hospital. Recent accomplishments towards the creation of a more patient-centered environment include: a restaurant style, foom service menu massage therapy services for patients the White Rose Program to identity patients at the end of life - the Care Partner Program to identify and involve significant others in the care process 30f5 installation of a labyrinth in the hospital's courtyard _ affiliation with the Ashland Artisans Association, for the display of the work oflocal artists, including participation in the First Friday Art Walk - creation of family and visitor comfort zones - recruitment of a full-time Chaplain Ashland Community Hospital remains committed to the support of education and training for its staff. In 2008-09 seventeen employees participated in the hospital's tuition reimbursement program, which provides employees up to $2,500 per school year for tuition, books and fees. Seven of these employees were involved in some level of nursing education. Hospital employees participated in 11,321 hours of continuing education through seminars, conferences, and in-house educational activities. The hospital implemented a formal Mentor Program for students involved in clinical experiences at ACH. Over the past year 15 employees served as Mentors for a total of 5,011 hours. As a mission driven organization Ashland Community Hospital remains committed to its community. In the past year, the hospital continued its support for student health services in elementary and middle school in Ashland and Talent and for the nursing programs at Rogue Valley Community College and Southern Oregon University. Through the Ashland Community Hospital Foundation, support was provided to the Community Health Center and La Clinica del Valle. The hospital's Community Health Education series continued. The hospital continued to provide support to the City's Fourth of July and Festival of Lights celebrations. Perhaps the greatest reflection of the hospital's mission to its community was the provision of approximately $9.4 million in uncompensated care in 2008-09, including $1.4 million in charity care, $2.7 million in bad debt write-offs, and a $5.3 million shortfall in payments through the Medicare program. 40f5 " . ""t ;~~ As the new fiscal year progresses, the hospital will focus on a number of initiatives. These include: Operating efficiency, labor productivity, and financial benchmarking Product standardization and supply utilization management Physician recruitment - Charge capture Service line analysis - Patient financial counseling and up-front collections Strategic planning - Campus Planning The big unknown, of course, is the outcome of discussions at the federal level related to healthcare reform. No doubt whatever happens, challenge and change will continue to be driving forces, 50f5