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NRMC examines programs' profitability
Nevada Daily Mail
The Nevada Regional Medical Center board of directors held a closed session after its regular meeting Tuesday to discuss the profitability of each of the hospital's programs.
"I've been working on service line analysis, looking at where can we save money and where can we cut it," Interim CFO Craig Stewart said.
Stewart explained in service line analysis, the directors will examine the program's revenue, revenue deductions, direct costs and benefits to determine if the hospital can afford it. Some programs that lose money are necessary for operation, he added.
The study of program profitability comes after an effort to reduce the overall cost of operations through cuts in labor, supplies, materials and contracts for services. With $575,000 in monthly losses, the administration set a monthly cost reduction goal of $350,000 a month. So far 38 positions have been impacted through attrition, retirements, hourly reductions, and position elimination. CEO Judy Feuquay said around 20 positions eliminated had been unfilled.
Of the $350,000, $250,000 is expected to come through workforce cost reduction and $100,000 through operations cost reduction. So far $150,000 has been saved in labor, more than $10,000 in overtime and $3,400 in health insurance.
"These changes are permanent," Stewart said. "It's not going to backslide two months from now. It's not going back to the way it was."
Feuquay credited the reduction in overtime from 61 hours to 28 hours to the success of the float pool, shifting employees from one department to another based on hours. She said the hospital is starting to send staff home whenever volume is less in a clinic, including those on full-time employment who would normally work those hours.
"If you don't have the business, then you need to reduce the staff," she said.
Glenn Rogers attributed the losses to government funding cuts, inadequate reimbursements from Medicare and Medicaid, increasing bad debt and charity care and decreasing patient volume.
"Many hospitals have not rebounded from the recession," Rogers said. "Nationwide there are fewer patient admissions and a record amount of charity care and bad debt."
In other business, the board approved a $61,920 contract to Emdeon required by Hospice, a $132,000 contract with Ameritech Medical Services for radiological services, a $46,000 contract to Midwest Pathology Consultants for pathology services and $153,042 to Trust HCS for ICD-10 training, coding and implementation.
Holly Bush explained the federal government would require ICD-10 codes, codes for billing documents.
"Currently we're using numerical codes that are reflective of a certain type of diagnosis," she said. "There's about 13,000 of those codes, and about 4,000 procedure codes. We're moving to about 68,000 codes. Any of the leadership, all the billing services, all the coders, and all the physicians will have to relearn how to document code in billing. If you fail to prepare, it could be catastrophic."
Bush added she started with a $285,000 bid and worked it down to $153,042 to be paid in five installments.
In the financial strength report, Stewart told the board admissions were 14 percent higher than last month at 190, but still 8 percent lower overall for the year than last year. ER visits were 3 percent higher at 909, but still 2.7 percent lower than a year ago. He highlighted that 96 surgeries were performed last month, a much higher number than dating back several years. Clinic visits were 12 percent higher in December, but down 13 percent from last year. Total gross patient revenue was $7.5 million, with net revenue at 66.1 percent. For the first time this year, revenue per adjusted patient day is higher for a month, $3,072 rather than last year's $2,692. Expenses were 3.04 million for December. Net loss for December was approximately $324,000.
"The loss we've had the last two months has been significantly less than the loss we were experiencing for July through October," he said. "That means the ship is starting to turn the right direction. We need to get back to a breaking even point. We're not there, but we're getting where we need to be. After that point, you start to build profitability."
Catherine Hissink noted the budget passed in July reflected an expected 3 or 4 percent growth and asked if the budget had been adjusted.
"We still have quite a few months left in this budget year," she said. "Are we going to amend our budget to compensate for the projection that was too high and even now is higher than it should have been?"
Stewart suggested leaving the budget as is to save time.
"I'm not saying you can't do it," he said. "But that would take a lot of time. Do you want to spend time doing that or do you want to work on collecting money and things that will actually get the cost reductions in? We're telling people that just because it's in the budget doesn't mean they can spend it."
Feuquay said the hospital is moving forward on a partnership with another hospital.
"Tertiary representatives talked to us about how they have partnered with other communities," she said. "There are lots and lots of different partnerships. When you say partnership or affiliation, don't consider that a buyout. That's not what we're talking about."
Another program the hospital will implement is hospitalist care, medical physicians who specialize in the care of hospitalized patients and return patient care to family doctors once the patient is no longer hospitalized.
"We would hire someone to do nothing but concentrate on inpatient care," she said. "In doing so, what you normally see is admissions will go up and transfers will go down. This is something our community has not experienced because we've never had this. This is the way that hospitals are going. When you're putting this program into place, the willingness of local physicians to use it is really critical for it being successful. Our doctors are ready for it and want it."
She added the orthopedic clinic moved to Nowcare, the warehouse storage is being relocated to a garage on the hospital grounds to lower utility costs, the hospital will undergo an energy audit with no upfront cost, Cerner training is ongoing, an RN is assisting doctors and code entry and the administration is reviewing benefit and retirement costs. She also stressed the importance of keeping the behavioral health unit.
"We make money off behavioral health unit," she said. "There are beds all across Missouri shutting down, so it's a good service for us to have."
Wednesday was new board member Larry Bledsoe's first meeting.
In the Long-term health report, Steve Branstetter said Moore-Few and Barone had a profit of $28,927 in December, the census increased to 74.2 at Moore-Few and 32.9 at Barone.
In the quality report, Bush gave the hospital a high score in elimination of infections and patient safety.
"We recently completed our patient safety survey," she said. "The majority of the staff gets a patient safety grade of a B. The three highest scoring were teamwork within units, supervisor/management expectations and actions promoting organizational learning."