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HomeMy WebLinkAbout2010-0720 Joint Council & ACH MIN ~ Joint Meeting Ashland City Council! Ashland Hospital Board July 20, 2010 Page I 00 MINUTES FOR THE JOINT MEETING ASHLAND CITY COUNCIUASHLAND HOSPITAL BOARD July 20, 2010 Council Chambers 1175 E. Main Street Mayor Stromberg called the meeting to order at 6:30 p.m. Annual General Meeting for Hospital Board and City Council. ' Councilor Voisin, Navickas, Lemhouse, Jackson, Silbiger and Chapman were present. Mark Marchetti, C.E.O. and Board Chair Doug Diehl, M.D. presented the annual report. Dr. Diehl reported that the hospital ended the year with a positive financial result. He stated that , the Board of Directors had spent much of their time and effort ensuring that changes implemented in 2008 and 2009 related to operating efficiency and labor productivity. The focus on financial indicators and operational benchmarks was increased and recognized that, Ashland Community Hospital is an anomaly which can only survive through careful attention to efficiency. The Board began a strategic planning process to help set direction for the coming years and noted concern for the future relationship of the hospital and its medical staff. A new committee was created for the new fiscal year, Board Medical Affairs Committee, which will be comprised of representatives of the Board and the medical staff. This will be a forum for sharing information and ideas between the two groups and for the consideration of strategies related to hospital- physician relationships, programs and services. Dr. Diehl noted re-appointments to the Board and the Officers. Chief Executive Director Mark Marchetti presented the overview from the past year. He reported that it had been a successful year despite service level being down which is attributable to economic downturn and increased competition. He noted the Ashland Community Hospital statistics for the fiscal year 2009-2010 year which included number of admissions, inpatient care, baby deliveries, surgeries and special studies, Emergency Department treatments, outpatient registrants, home health visits and hospice care. The hospital generated net patient revenues in excess of $48 million after deductions for contractual adjustments, charity care and bad debt. Total operating expenses for the year were approximately $47.5 million. This combined with non-operating revenues, resulted in a gain from operations of approximately $2.2 million, and a profit margin of2.43%. Mr. Marchetti reported that in 2008 the hospital conducted an organization-wide change initiative involving analysis of all aspects of the hospital's operations. Operational benchmarks and financial indicators were established based on industry-wide best practices and progress toward these goals has been significant in the past fiscal year. In addition, time and energy has been spent on the redesign ofthe hospital's quality management programs, quality indicators were redefined for all departments and processes for physician peer review are being evaluated. Increased emphasis has been placed on action planning and resolution and greater focus on government mandated reporting of outcomes data through Hospital Consumer Assessment of health care Providers and Systems (HCACPS) and Core Measures programs. He reported that the hospitals scores related to these programs have , Joint Meeting Ashland City CounciV Ashland Hospital Board. July 20, 2010 Page 2 00 increased. In 2010 the hospital aligned with a new accrediting body, DNV Healthcare Inc., which is a division of a larger international corporation known for quality 'certification, standards development, and risk management in a wide range of industries including healthcare. Standards are based on Centers for Medicare and Medicaid Services (CMS) Conditions of Participation. The hospital has continued implementation of its electronic medical record and is currently working on computerized physician order entry. The hospital also continues its implementation of the Planetree model of patient and family centered care. It is hoped that the hospital will achieve designation status through the Planetree Program by 2012. Mr. Marchetti noted other significant accomplishments at the hospital over the past fiscal year which included: Self-insured plan for employee health benefits, wellness services as part of employee health benefit program, growth in Center for Internal Medicine, growth in hospitalist program, renovation to several clinical departments, relocation of Patient Accounts Department to Talent, automated time and attendance system, more structured processes for patient insurance pre-authorization and up-front' collections, growth in comprehensive would program and recruitment of a Volunteer Coordinator to facilitate the recruitment, training, and scheduling of volunteers. The hospital remains committed to the support of education and training for staff and examples were noted. The hospital is committed to the community it services, it provides support for student health services in elementary and middle schools in Ashland and Talent, support for the Community Health Center and La Clinica del Valle, the City's Fourth of July and Festival of Lights, , celebrations. The Board of Directors is working with ECG Management Consultants for a strategic planning process to help set direction for the hospital. It is expected that the planning process will be completed by fall of this year and a number of defined strategic and operational initiatives were noted. Mr. Marchetti stated that the future will be challenging for the hospital and the healthcare industry and the decline of reimbursement through the Medicare Program. The impact of healthcare reform is very uncertain and technology continues to evolve at a rapid pace and at great cost and pressure on wages and benefit costs. Completing his report, Mr. Marchetti stated that the hospital is confident that they are in a good position to meet the challenges ahead. City Administrator Martha Bennett commented on the six requested changes in the relationship between the City of Ashland and the Ashland Community Hospital. These options are on the agenda for council discussion during their Regular Council Meeting: Status of the official City Liaison as an ex-officio, non-voting member of the Hospital Board, increase of number of members of the Board of Directors to 14, hospital to provide mid-year reports to City Council, remove two of the financial benchmarks from the facilities Lease and the Definitive Agreement, add provisions to both the Definitive Agreement and Facilities Lease about other circumstances when the City should either consulted or should resume operation of the hospital and ensure that the language that indemnifies the City from liability is all three agreements meets the new case law. , Joint Meeting Ashland City CounciV Ashland Hospital Board July 20, 2010 Page 3 00 Mr. Marchetti explained that the hospital is continually asked what their role with the City is and voiced concern that a council member has the potential to entangle the City with hospital issues. He stated that a position on the Board whether voting or non-voting creates concern, that guests would be okay sometimes and suggested looking into a different reporting format. Mayor Stromberg and council members noted concern with not having awareness when there is no presence at the meetings by the City. Council agreed to discuss the issue further as an agenda item during their Regular Meeting that even mg. was adjourned at 7:00 p.m. ~~ arbara Christensen, City Recorder , Ashland Community Hospital Annual Report to City Council July 20,2010 Mark E. Marchetti, C.E.O, '" June 30th marked the end of another fiscal year lor Ashland Community Hospital. I am happy to report that after several years 01 disappointing financial results, the hospital ended the year with positive financial results. Service volumes lor the year were down in several key areas, including surgeries, admissions, and total outpatient visits, compared 10 both budget and prior year. This can be attributed to the generally poor state 01 the economy, the loss of employment and accompanying health benefits, increased out-of-pocket costs for consumers resulting from higher deduclibles and co-pays, and increased competilion from free-standing surgery and diagnostic centers. For the fiscal year 2009-2010, Ashland Community Hospital: o Admitted 1 A68 palienls o Provided 5,190 days of inpatient care o Delivered 300 babies o Completed 3,515 surgeries and special studies o Trealed 9.758 palients in the Emergency Department o Registered 57,250 outpatients o Made 7,920 home health visits o Provided 10,594 days of hospice care , The hospital generated net patient revenues slightly in excess of $48 million after deductions for contractual adjustments, charily care, and bad debt. These deductions equaled 48% of total revenue, up from the prior year's deductions of approximately 47%. This is a continuation of an upward trend of the past five or six years reflecting a growing reliance on reimbursement through the Medicare Program, increasing Medicaid volumes, and increasing bad debt and charity care. Total operating expenses for the year were approximately $47.5 million. This, combined with non-operating revenues, resulted in a gain from operations of approximately $2,2 million, and a profit margin of 2.43%. In 2008 Ashland Community Hospilal undertook an organization-wide change initiative involving a careful analysis of all aspects of the hospital's operations including labor and productivity, clinical and non-clinical systems, conlract services, physician services, service lines and programs, third-party payor conlracts and charge capture, and billing and collection processes. As part of this iniliative, operational benchmarks and financial indicators were established based on industry-wide best practices. I am happy to report significant progress towards these goals in the past fiscal year: Salaries and wages as a percentage of net revenue were 41 % for the year, down significantly from a high of 48% several years ago, although not yet at the goal 0138%. Pagelof4 , o Supply expenses as a percentage of net revenue have been on target at 17%. These expenses had been as high as 23%. o Net days of revenue in accounts receivable are on target 47 days. o Days cash on hand has increased significantly. o The hospital is fully compliant with required financial covenants, with a debt service coverage ratio of 4.52 and a current ratio of 2.27, In addition to a focus on operational and financial performance, considerable time and energy has been spent over the year on the redesign of the hospital's quality management programs. Quality indicators were redefined for all departments. Processes for physician peer review are being evaluated. New quality reporting formats and dashboards have been implemented with greater emphasis on lracking and trending of data. Increased emphasis has been placed on aclion planning and resolution. Greater locus has been placed on govemment mandated reporting of outcomes data through the HCACPS and Core Measures programs. HCAHPS the Hospital Consumer Assessment of Healthcare Providers and Systems, measures consumer perception of Ihe hospital experience. Our hospital's HCAHPS scores have improved consistently over the year with ACH now at or above the national average in 8 of the 10 ten required dimensions 01 performance. The hospitals reporting of Core Measures, which measure compliance with care standards for selected diagnoses, has also improved with the hospital at or above goal in 19 of 20 indicators. Strong performance in these mandatory reporting programs is essenlial to the future financial success of the hospilal as outcomes reported through both Core Measures and HCAHPS are publically available and will form the basis for performance-based reimbursement expected in the future. In 2010 Ashland Hospital aligned with a new accrediting body. ACH had been accredited by the Joint Commission, which for many years was the only option for hospital accreditation accepted by the US Centers for Medicare and Medicaid Services (CMS). In September, 2008 CMS approved DNV Healthcare Inc. as an accrediting body for US hospitals. DNV Healthcare Inc. is a division of a larger international corporation known for quality certification, standards development, and risk management in a wide range of industries including healthcare. Like the Joint Commission, DNV's standards are based on CMS's Conditions of Participation. After careful evaluation 01 the accreditation program and approach offered by DNV, including discussions with hospitals that had gone through the DNV accreditation process, DNV was invited to conduct an accreditation survey at Ashland Community Hospital. DNV arrived on an unannounced basis on April 13 and conducled a three day survey. The survey wenl very well and the hospital has been accredited for a full three-year period. The hospital has continued implemenlalion of its electronic medical record. In 2002 ACH selected the Meditech System as its EMR platform. Initial phases 01 implementation included patient registration and demographics, order entry, charge accumulation and billing, In 2008 electronic nursing documentation was added. This past year a scanning and archiving module was implemented to allow for written documents to be incorporated into the electronic chart. We are currently working on the implementation of CPOE, computerized physician order entry, which will allow physicians to enter progress notes and orders electronically. It is expected that this will be operational by October 2010. Page 2 of4 / ) Throughoul 2010 the hospital conlinued ils implementation of the Planetree model of patient and family centered care. ACH affiliated wilh the Planetree Organization in 2006 and the Planetree model, which slrives to personalize, humanize and demystify the hospital experience, remains a key slrategic imperative lor the hospital. Recent changes toward the creation of a more patient-centered environment include: o Creation' of additional family and visitor comfort zones o The introduction of Reiki, Healing Touch and Aroma Therapy for the hospital's patients o Development 01 a Quiet Program to ensure an environment more conducive to sleep o Provision of patient Sleep Kits including ear plugs, eye masks and sleep socks o Implementation of a Comfort Shawl Program, providing hand knit or crochet shawls to patients, visitors and families who need a little extra care o Creation of a massage chair room for employee II is our hope that Ashland Community Hospital will achieve designation status through the Planetree Program by 2012. Olher significant accomplishments at the Hospital over the past fiscal year include: o Implementation of a self-insured plan for employee health benefits ending the hospital's long-term relalionship with the City/County Insurance Trust. o Incorporation of wellness services as part of the employee healIh benefit program. o Continued growth in the hospital's Center for Internal Medicine, with the addition 01 another full- time internist. o Continued growth in the hospitalist program. Hospitalists now provide care to approximately 80% of the hospital's inpatients. o Renovation to several clinical departments. o Relocation of the hospital Patient Accounts Department to offices in Talent. o Implementation of an aulomated time and attendance system, greatly streamlining the payroll process. o Implementation of more structured processes lor patient insurance pre-aulhorization and up-front collections. o Continued growth in the hospital's comprehensive wound program, leading to the receipt of a nation award for excellence in wound care. o Recruitment of a Volunteer Coordinator to facilitate the recruitment, training, and scheduling of volunteers. Ashland Community Hospital remains committed to the support of education and lraining for staff. In 2009- 2010, 18 employees participated in the hospital's tuition reimbursement program which provides employees up to $2,500 per school year lor luition, books, and fees. Five of these employees were involved in some level of nursing education. Hospital employees participaled in over 14,000 hours of continuing education through seminars, conferences, and in-house educational offerings. Through the hospital's Mentor Program, implemented in 2008, six employees served as mentors providing a total of 1429 hours in support , and guidance. As a mission-driven organization, Ashland Community Hospital remains committed 10 the community it serves. Over the past year the hospital continued its support for student health services in elementary and middle schools in Ashland and Talent. Through the Ashland Community Hospital Foundation, support was Page3 of 4 .' . provided to the Communily Health Cenler and La Clinica del Valle. The hospital conlinued to support the City's Fourth of July and Festival 01 Lights celebrations. Perhaps the greatest reflection of the hospilal's mission to the community was the provIsion of approximately $12.4 million in uncompensated care in 2009-2010, including $1.4 million in charity care, $2.0 million in bad debt write-offs, and a $9.0 million shortfall in payments through the Medicare Program. In the late winter of 2010, the Board of Directors of Ashland Community Hospilal initiated a strategic planning process to set direction for the hospital in the coming years. The hospital is once again working with ECG Management Consultants who facililated the planning process in 2006 and again in 2008 and helped create the hospitals Medical Staff Development Plan in 2007. The process has included an internal assessment to better understand the hospital's core business, an assessment of the external environment, consideralion of physician perceptions and potential future physician-hospital relationships, and an assessment of community perception of the hospital and its services. It is expected Ihal this planning process will be completed by early fall of this year. Outcomes of the strategic plan will lead to the development of specific strategic goals and initiatives. In addition, we will focus on a number of currently defined strategic and operational initiatives over the course of the new fiscal year. These include: o Creation of a marketing plan o Finalization of a campus development plan o Detailed service line analysis and focus on cost accounting o Achievement of Designalion Status through the Planetree Program o Enhanced processes for case management, discharge planning and patient financial counseling o Conlinued locus on efficiency, labor productivity, and financial benchmarking o Increased focus on clinical outcomes and patient satisfaction There is no question that the future will be challenging for our hospital and for the healthcare industry as a whole. The percentage of the hospital's business reimbursed through the Medicare Program is expected to continue to rise, reflective of the aging demographic of the community. There is no doubt that Medicare reimbursement will continue to decline. The impact 01 healthcare reform is very uncertain. Technology will continue to evolve at a rapid pace and at great cost and pressure on wages and benefit costs will continue. We are confidenl, however, that the hospital is well position to meet the challenges ahead. Thank you. Page 4 of 4 ; Ashland Community Hospital Annual Report to City Council July 20,1010 Doug Diehl, M.D., Chair Good evening. I am Doug Diehl. I am the new chair of the Board of Directors of Ashland Community Hospital. After several difficult years I am happy to report that our hospital ended the 2009-2010 fiscal year with positive financial results. Our Chief Executive Officer, Mark Marchetti, will review the results of the year's operation in detail. Over the past year, the Board of Directors has spent much of time and effort ensuring that changes implemented in 2008 and early 2009 related to operating efficiency and labor productivity have remained in place and are effective. The Board has increased its focus on financial indicators and operational benchmarks based on industry best practices. The Board recognizes that Ashland Community Hospital - a small, independent, free-standing, community hospital - is a bit of an anomaly today and can only survive through careful attention to efficiency. The Board recently began a strategic planning process to help set direction for the hospital in the coming years. Of particular concern to the Board is the future relationship of the hospital and its medical staff. With hospitalists now caring for most of the hospital's inpatients and community physicians having few interactions with the hospital, it is important that the hospital and its medical staff create opportunities for collaboration and mutual support. For the new fiscal year the Board has created a new committee - the Board Medical Affairs Committee - which will be comprised of representatives of the Board and the Medical Staff and will be a forum for the sharing of information and ideas between the two groups and for the consideration of strategies related to hospital-physician relationships, programs and services. The Board has no new members of the new fiscal year. Three members of the hospital Board - Steve Minor, Anne Golden, and Carol Christlieb - where recently re-appointed by Council to second four-year terms. Marie Donovan, who served as Board Chair for two years, will serve the remaining two years of her term as Past Chair. Board officers for the coming year include Harvey Rey as Chair Elect, Valri Williams as Treasurer, and Anne Golden as Secretary. And now Mr. Marchetti will provide a more detailed overview of the past year. Thank you.