MINUTES FOR THE ANNUAL
July 21, 2009
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
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 hospitalís 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 Boardís Development Committee will be recommending a slate of officers to the Board for consideration at the July 28 meeting.
Mark Marchetti, CEO of
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 yearís deductions of approximately 48%. This is a continuation of an upward trend over the past 5 years and reflects the hospitalís growing reliance on reimbursement through the Medicare program.
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 hospitalís 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 hospitalís
The formal phase of the hospitalís 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 FTEís 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 hospitalís 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 hospitalís 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 hospitalís participation in the City-County Insurance Trust
∑ 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 hospitalís
∑ 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 hospitalís 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.
Meeting was adjourned at 7:00 p.m.
Barbara Christensen, City Recorder
John Stromberg, Mayor