Virginia Graziani

Redwood Times

Decline in hospital admissions, cash flow issues, recruiting another community-based doctor and board meeting protocol were among the top items discussed at the Southern Humboldt Community Healthcare District Governing Board meeting on October 29.

Because last month’s six hour-long meeting caused difficulties for those attending, board chair Nancy Wilson announced the October meeting would be limited to three hours. The printed agenda included 20 items, some with numerous sub-items, including a closed session to deal with personnel performance evaluations and risk reports.

Board member Darryl Cherney asked that an issue regarding the coffee machine be put on the agenda, although it had already been discussed by the executive board during their prior meeting. That item, as well as a closed session item requested by administrative assistant Erica Dickinson, was duly added.

With no public comment, correspondence, or suggestions offered, the board moved quickly to the first discussion item, board member Mike Thompson’s proposal for adding a variety of reports to the consent agenda to reduce meeting time.

Thompson proposed that nine administrative and staff reports be added to the consent calendar for approval as a block as long as the items are not controversial and need no action. Any board member, staff person, or member of the public could request that a particular report be put back on the main agenda for separate consideration.

One stipulation of the proposal was that the reports be submitted in writing a week before the meeting, so that the responsible person would not need to make a presentation at the meeting.

Cherney objected, stating that some reports, particularly Medical Director Mark Phelps’ report and the earthquake retrofit report presented by Operations Manager Kent Scown, required the individual’s presence. He stated that if Thompson’s proposal was accepted, he would make standard requests that these two reports be put on the regular agenda at every meeting “until the next election.”

After lengthy discussion, the board agreed to Thompson’s proposal with the exception of Phelps’ medical staff report.

Administrator Harry Jasper then reported on several events in which he had participated, including the meeting of the Quality Improvement Team and a staff barbecue celebrating successful completion of the Critical Access Healthcare Survey conducted by California Medical Services.

Jasper told the board he has been invited to become a board member of Southern Humboldt Working Together (SHWT), which he described as “one of the best organizations I’ve seen in any community for representing the diversity of the community.”

SHWT is currently planning a health workshop in spring 2010 to coincide with Arts Alive! and the official dedication of the Town Square. Jasper suggested that SHCHD sponsor a health symposium as part of that event.

SHCHD has also been asked to become involved with the Rural Community Vital Signs Project, which tracks rural community health indicators, Jasper said.

Jasper added that hiring a variety of doctors to serve temporarily in the ER can be a useful tool in recruiting a full-time physician for the district. Staff and administration get a chance to know the doctors and find out who is a “good fit” for SHCHD.

At this point, Thompson spoke up, explaining that Jasper had agreed to give him some of the administrator’s report time, and cited sections of the California Open Meeting Act (Brown Act). According to the Brown Act, a public body cannot prohibit criticism of staff, even if that person’s name is used, if the criticism is related to job performance, Thompson said.

Phelps then responded to some hearsay public complaints about one of the ER doctors, who practices plastic surgery and was therefore considered by some persons to be unqualified as an ER doctor.

This physician is actually certified as a general surgeon like Phelps’s father, the late Jerold Phelps, Mark Phelps explained. He described the ER doctor as “a generalist and a solid practitioner with common sense, good in the ER, and has a special interest and sub-practice in plastic surgery.”

The board of directors took this moment to express their condolences to Phelps on the death of his mother, Bettie Phelps, the previous Sunday, October 25.

Phelps began the Medical Director’s report by announcing that although SHCHD still has not received the promised shipment of H1N1 (”swine flu”) vaccine, some vaccine is expected to arrive early in the week of November 1. It will first be distributed to health care workers and people with “special needs.”

The governors asked Phelps how being the only full-time community-based physician is affecting the Southern Humboldt Community Clinic.

Phelps replied, “I could talk about this for hours.” He stated that the clinic is operating efficiently, but both he and clinic staff have suffered impacts from lack of a second full-time MD.

For his part, Phelps said, he has taken on all of the most complex problems and misses having colleagues with whom he can discuss cases and get advice. The clinic “mid-levels” (Physician Assistants and Family Nurse Practitioners) are also frustrated when they need a physician’s advice or approval and Phelps is unavailable.

Cherney asked Phelps a series of questions; first, whether adding another MD would increase the number of patients using the clinic and therefore help with revenue.

Phelps replied that he had analyzed clinic statistics for the last ten years. In prior years when there were more MD’s on staff and specialists such as a cardiologist, orthopedist, and pediatrician were making regularly scheduled visits to the Garberville clinic, patient numbers were clearly higher than today.

Secondly, Cherney asked to revive the committee on pre-natal services and requested that female mid-level practitioners focus on prenatal care.

Physician Assistant Linda Candiotti is both qualified and interested in pre-natal care, Phelps said. Patient Care Coordinator Melea Farlow added that Candiotti does provide pre-natal care up to the last trimester of pregnancy, but the public is not generally aware of this. “Public relations - that’s your department,” board chair Wilson said to Cherney.

Cherney next asked Phelps whether the current schedule requiring an ER doctor to be on call 24 hours a day, seven days a week, for three consecutive weeks is too much. Phelps replied that this depends on conditions. A small town hospital does not get the kind of constant ER activity that a city ER does. If the physician is able to get enough sleep, he or she can work longer, but when sleep is disturbed, performance is affected.

Cherney pointed out that the temporary ER physicians seldom admit patients who need to be hospitalized to the local hospital, sending them to Redwood Memorial in Fortuna or St. Joseph Hospital in Eureka instead.

Admitting an ER patient to a hospital requires a great deal of work and follow-up, Phelps said, and there’s very little incentive for a salaried doctor who is not linked to the community to do that. Sometimes, he added, the local hospital lacks equipment or other resources needed to fully diagnose or treat the patient, such as the ability to do CT scans. This problem is typical of small-town hospitals, Phelps concluded.

At the board’s request, Phelps promised to talk once again to the ER doctors about admitting patients to the community hospital whenever possible. He agreed with Jasper’s take on hiring temporary ER doctors as a recruitment tool.

This discussion segued into the financial report presented by Jasper and Finance Committee Chair Corinne Stromstad.

Using monthly budget projections based on the previous year’s totals divided by 12, the district’s total patient revenue for the first quarter of Fiscal Year 09-10 is a little over $1.5 million, down 8% from last fiscal year. Total operating revenue after deductions and allowances, is $1.02 million, down 15%.

Operating expenses total slightly less than $1.4 million for the first quarter, also down 8% from last fiscal year. Tax revenue was also down, however, which gives SHCHD a net loss for the first quarter of FY 09-10 of approximately $38,000, a 185% increase in net loss over the first quarter of FY 08-09.

Looking at patient statistics for the quarter, Jasper noted that the principal cause of the decline in revenue is a decline in patient days in the hospital, which also caused a sharp decline in inpatient ancillary services, such as lab and radiology.

Overall patient days for all three types of hospital beds - acute care, skilled nursing, and swing beds - were down 10% from the first quarter of last fiscal year. Length of hospital stays also declined. Admissions from the ER were down 71%, with inpatient lab and radiology services also suffering declines of nearly 80%.

On the positive side, ER visits were up 3% and clinic visits were only 1% below the prior fiscal year.

Likewise, there are hopeful signs on the balance sheet. Accounts receivable, which is money owed to SHCHD for patient services, have increased. Jasper believes collections will increase also now that the district has begun doing its billing in-house and staff has received good training in processing claims, tracking claims denials, and correcting errors.

Actual cash flow is still a problem, however, causing payments to some vendors to be deferred until revenues from the parcel taxes are received. Parcel taxes are disbursed only twice a year, following property tax payment deadlines in December and April.

Last month the board approved a line of credit on which Jasper can draw to pay down accounts payable in a more timely way. At the board’s request, Accounting Manager Buzz Fish created a report that shows day-by-day cash flow, with actual figures from August 1 through October 23, and estimated figures for the rest of the year.

If cash flow occurs as projected, SHCHD will use $248,000 of its $250,000 line of credit by the time it receives the December parcel tax payments. The district will pay the line of credit down completely at that time.

Board member Ed Smith pointed out that banks don’t like their customers to get so close to exhausting their line of credit. Jasper agreed, and said some accounts payable may be delayed further and accounts receivable may be greater than projected. “It’s the challenge of financial management,” Jasper said.

The governors then discussed the budget for Fiscal Year 09-10, which had not yet been finalized and approved.

Jasper explained that changes to the budget compared to FY 08-09 include a 3.1% increase in salaries, wages and benefits, a 61% reduction in administrative consulting fees by doing most accounting in-house, a 38% savings in patient accounting because of discontinuing the outside billing service, and a nearly 36% savings in malpractice insurance.

The board unanimously approved the budget.

Regarding the line of credit, the board agreed with Wilson’s suggestion to add Stromstad as a signer on the authorization required to draw funds. Authorization will require signature by two out of the three signers, Jasper, Wilson, and Stromstad.

Following a procedure created at last month’s meeting, Jasper asked the board for approval to withdraw the balance remaining in the line of credit before the next meeting. The motion passed four to one, with Cherney opposed.

Next, Operations Manager Kent Scown reported on the earthquake retrofit project. The project must be completed by December 31, 2012, or the district will lose its ability to get reimbursement for services billed to Medicare and Medi-Cal, which would result in the closure of both hospital and clinic.

SHCHD’s consulting architects, Moore Uebel (MU), submit a monthly update, which continues to show “timelines in jeopardy.” Scown explained that the district is actually meeting its deadlines so far. Jasper added that the plans are complete but funding for the project depends upon “the state of the economic recession.”

At this point it was nearly 4 p.m., the deadline to close the meeting, but the board had covered only about half the agenda. Smith suggested extending the meeting to 5 p.m. Wilson wanted to stick to the deadline. The board compromised by agreeing to quickly cover some items that needed immediate action and continue the rest to the next meeting.

The board swiftly approved this month’s installment of the policies and procedures manual. At Wilson’s request they approved creation of a Hazard Mitigation Plan committee, to be made up of finance committee member Gary Wellborn, Scown, and Engineering Manager Guy Vitello.

Finally the governors discussed future meeting schedules. Smith again pressed for meetings to go to 5 p.m., and Wilson held firm on the 4 p.m. deadline. Jasper pointed out that by the time the board dealt with the closed session items it would be 5 p.m.

Choosing not to hold a special meeting to complete the October 29 agenda, the board continued all the items to the next regular meeting, which was scheduled for Tuesday, December 1, to avoid the Thanksgiving holiday and accommodate directors’ personal schedules.

Among the remaining items are several more reports that should become part of the consent calendar, discussions of the employees’ retirement plan, the use of the district’s rental properties, exploration of expanding services, hospital admissions criteria, approval of the administrator’s paid time off and out of town business trips, the suggestion box and statements of concern, the nursing staff meeting, the district’s phone system, other communications issues, and the ongoing coffee machine problem.