'Critical Access' status puts hospital back in black

Thursday, September 21, 2006

The bottom line and the future of Community Hospital improved when it underwent what the McCook hospital's CFO called "a rigorous and swift process" to change its license during FY2006 and became licensed as a "Critical Access" type hospital on Dec. 1, 2006.

Troy Bruntz, vice president of finance and chief financial officer at the hospital, told hospital board members Wednesday morning that the new license allows cost-based reimbursement of Medicare and Medicaid inpatient and outpatient services provided by the hospital. Under the previous license, the hospital was paid much less than the cost to provide these services, Bruntz said.

He continued, "We feel this (the new license) accounted for most of our $1.8 million bottom line in 2006 (the fiscal year which ended June 30, 2006) and generated cash flows from operations to fund our capital asset needs during the year, while allowing us to reduce our long-term debt for the first time in many years."

Jim Ulrich, hospital president and CEO, was excited about the license change and the hospital's bright future. "The biggest change will be in the dramatic difference -- a positive change -- in our bottom line," Ulrich said, pointing out that the hospital went from a loss in net assets of $18,428 in FY2005 to an increase of $1,777,958 in FY 2006. The hospital showed an increase in net assets of $339,523 in FY2004.

Ulrich said this much-improved bottom line will mean great strides can be made in the hospital's efforts to purchase capital additions.

Bruntz said that, in fiscal year 2006, the hospital was able to purchase $1.8 million of capital assets such as new mammography and anesthesia machines, new laboratory equipment and additions to the information system. Updates to the emergency room and front lobby helped the hospital comply with privacy regulations.

Bruntz said, "With no need to continue borrowing for these additions, our long-term debt decreased by almost $300,000 from scheduled principle and interest payments.

Ulrich said increases in assets will enable the hospital to make even more improvements -- to the pods and patient rooms, to the operating room and surgery -- without borrowing money every time. "We'll reinvest these reserves back into our facility, allowing us to further our deliverance of care," Ulrich said.

Bruntz said that gross patient service revenue increased 3.3 percent from last year to $36.5 million. "Our write-offs for contracted allowances to gross charges decreased by 11.3 percent from last year, or $1.6 million, mainly due to our new status as a Critical Access type hospital, and represents the significant difference in bottom line this year compared to recent years," Bruntz said.

Bruntz reported that the hospital's cash and investments increased by more than $1 million to $2.2 million, and total assets increased from $16.1 million to $17.6 million.

Tom Carpenter, vice president of human resources and public relations, reported to hospital board members that the hospital has adopted policies banning concealed weapons in the hospital and the use of tobacco products on hospital property.

Carpenter said that while Nebraska law allows the carrying of concealed weapons, its also allows hospitals to ban them inside their facilities. McCook is among other hospitals that have are adopted similar policies, Ulrich said.

The ban will apply to all medical staff, employees, patients, visitors and vendors/suppliers, but will exempt law enforcement officers. Signs will be posted at all hospital entrances.

Anyone entering the hospital with a weapon will be asked to take it back to his/her vehicle in the parking lot, Carpenter said, or a safe will be made available in which the weapon can be placed.

This ban becomes effective immediately.

The ban on all tobacco products takes effect Feb. 1, 2007. Its purpose, Carpenter said, is to provide a healthy work and patient environment and promote healthy lifestyles and quality of life.

The ban encompasses the entire hospital campus on East H, he said, which is surrounded by city streets on all four sides. It also applies to hospital-owned facilities off the main campus.

In other action:

* Carpenter reported that Chase Crawford, originally from Arapahoe, has been recruited as a new pharmacist at Community Hospital. Crawford will join the hospital staff March 1, following his graduation from the University of Nebraska Medical Center School of Pharmacy.

* Jan Fidler, vice president of patient care services, announced that Molly Morris, RN, has accepted the position of director of surgery, replacing Shelly Walker, who is retiring. Morris joined the hospital staff as a staff nurse in November 2001.

* Community Hospital received a donation from the Volentine Family Foundation to finance an annual scholarship in honor of the Foundation's longtime secretary, Jackie Boehm, who died Jan. 28, 2005. The scholarship will be called the "Jackie Boehm Healthcare Career Scholarship."

* Fidler also updated board members on Gentiva, the consulting firm that manages the day-to-day operations of Community Hospital's home health services and hospice.

Ulrich said Gentiva is working on a revenue cycle process of billings and collections.

"The firm brings a tremendous amount of clinical knowledge," Ulrich said, an important service in a population that is aging.

Ulrich said that Cathy Nichols has been appointed manager of clinical practice; recruiting continues for a full-time director.

* The hospital board heard a report on the "Celebration of Success," which celebrated the hospital's accreditation by the Joint Commission on Accreditation of Health Care Associations, a successful financial audit and the hospital's switch to the Critical Access license status. Ulrich said the administration served a meal to about 185 employees. "We had a wonderful turnout," he said.

* Ulrich reported that about 32 percent of the new rehabilitation center project is completed. "Things are happening quickly," he said; all the steel is up, the therapy pool has been delivered and installed and work on the roof walls and floor will begin in October.

* Work continues on the development of a new hospital logo to replace the circle which is representative of the hospital's pod layout, and its motto: "Better Care for the Good Life."

Ulrich said coordinators envision the new logo and motto will be representative of extensive remodeling within the hospital and its new decor of sun-warmed prairie colors.

* Ulrich reported that Corey Brockway of McCook has been appointed to fill a vacancy on the hospital board.

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