Hospital board receives positive financial news

After a number of months of negative financial news, Monday's meeting of the board's finance committee and Tuesday's meeting of the board of directors received several pieces of welcome news.

For the first time since March of 2016, Nevada Regional Medical Center had a month in which it made money. In February 2017, NRMC had a positive net income of $17,702.

While that hardly offsets the December and January losses which were respectively, $493,001 and $232,926, it is nonetheless a positive development.

Wrote Chief Executive Officer, Kevin Leeper, in his monthly report, "It is a relief to have a month's bottom line ease into the black after a run of months that have failed to click on all cylinders, a month in which each service line held its own for an entire month's stretch."

On Monday, prior to reviewing each area of medical service the hospital provides -- the service lines -- Chief Financial Officer, Mike Harbor, pointed out three other measures showing improvement.

"Gross patient revenues were $8.1 million which exceeded every month in over two years and this was in a 28 day month," said Harbor.

The number of inpatients increased and with it, inpatient charges in February exceeded $3 million, for the first time since January 2015, with NRMC net revenues over $3.2 million.

Said Dr. Brad Copeland, local veterinarian, NRMC board member and chair of its finance committee, "It's nice to see good volumes. It's nice to see black numbers. We have a long way to go but this is a good first step."

The service lines to which Leeper was referencing include, the number of inpatient admissions for acute care and in the Behavioral Health Unit, the number of visits to clinics (Rich Hill, Sheldon, Now Care, Pain Clinic, etc.), visits to the emergency room as well as deliveries.

In each of these areas, for the month of February, the number of patients increased. Clearly, serving more patients is an important part of increasing revenue.

At February's board meeting, Bill Donatelli, Quorum Western Division Vice-President, presented a series of measures intended to be a turn around plan for the hospital.

"The first quarterly goal is to get your EBIDA to $150,000 month," said Donatelli. "This will provide you with the kind of revenue which will cover all your basic costs on a consistent basis, including your bond days cash on hand."

EBIDA is earnings before interest, depreciation and amortization. This is a conservative measure of the earnings of a business.

Achieving a certain level of revenues is not enough if costs are high. A consistent EBIDA level means revenues are high and costs are contained.

The December EBIDA was at $56,606 and January's stood at $55,613 while February's was $315,065.

As Donatelli told the board last month, "While there are cost savings to be found in a number of areas, the biggest bang will come from volume and revenue growth."

The current five-year contract with the hospital management firm, Quorum Health Resources, ends in November. The Nevada city council has hired James Sneed, an expert in rural hospitals, to provide an independent evaluation of the condition of the hospital.

Attending Tuesday's NRMC board meeting Sneed said, "Ninety-nine percent of a hospital's revenue comes from the end of a physician's pen." Referring to orders and prescriptions, Sneed, said he is looking at productivity, service lines, physician contracts and revenue realization among others.

At the close of Monday's board finance committee meeting, Leeper distributed a packet saying, "I'm asking you to study the contents of these pages before tomorrow's board meeting." The board received the packet at their Tuesday meeting which Leeper reviewed.

The packet's last few pages contain areas of potential savings while the first dozen identify a good number of sources for additional income or cash flows.

While the BHU remains largely full, it suffers from the fact so many of its patients have no insurance and little or no income. Currently, the unit is divided into two portions with 22 beds for youth and adults and eight set aside for geriatric psychology patients.

Said Leeper, "There is a real need for geriatric psych beds and so I am proposing that we do some remodeling on the third floor and change the patient mix to 15 regular and 15 geriatric beds. People will be helped and the unit will earn more."

Other ways proposed by Leeper, in conjunction with consultants at Quorum Health Resources, focus on utilizing the new Primary Health Clinic -- next to Dr. Lovinger's office -- to earn its higher reimbursement rates and help physicians to fully chart cases so that charges for the appropriate services can be billed and received.

In reviewing the financial reports, Harbor said February's profit would have been significantly higher but there were two large medical claims paid out for employees. The hospital self-insures but also has stop loss coverage -- catastrophic medical insurance -- which kicks in when a claim exceeds $85,000. Each of the two claims recorded on the hospital's books in February were under that limit but together totaled $155,000.

On the positive side, the hospital will receive a rebate accrued from its liability insurance program. This will total around $220,000 but likely will not be received until June.

Harbor also pointed out how most of the income the hospital receives in a given month comes on patient activity two to three months earlier.

Warned Harbor, "Since patient volumes for December and January were bad for us that means we will not see a huge turn around in receipts for several more months. And we see that in our liquidity, with our bond cash days on hand at 18.7."

Steve Branstetter, director of the Long Term Care Unit, consisting of Moore-Few Nursing and Barone Alzheimer Care centers gave another positive report.

"In February, Long Term Care had a net profit of $16,159 and year-to-date we are at a net gain of $131,721," said Branstetter. "While our cash dipped 26.9 days due to our financing of the Lovinger property, our cash days on hand stands at 219.9."

As of Monday, Moore-Few has a few empty beds while Barone's director, Angela Barrett, reported her facility is at capacity.

Turning to the purchase of capital items requiring finance committee review or approval, Long-Term Care asked to purchase lawn care equipment which will be used by their two facilities as well as the hospital. A comparison of costs between contracted labor and doing this in-house showed doing it themselves would save a significant amount of money.

The hospital received approval for the purchase of a new sign at the Rich Hill Clinic which is to be funded jointly by the hospital's auxiliary and foundation.

Prior to introducing a request to expand the computer network to the 627 S. Ash St. property, Copeland commented, "Sitting on the technology committee, I should warn you we have a number of IT (information technology) upgrade requests coming up. But then again, you're never caught up on IT."

The truth of that last statement was heard on Tuesday as Marci Hardin, director of IT services at NRMC related problems with the hospital's email system which uses a 2003 server. The system has crashed four times in the past two weeks with two of them coming on Tuesday. The board approved the immediate purchase of a new system at a cost of about $60,000, with most of that cost being for licenses.