SHCHD staff to receive raises, board reconsiders insurance contributions

Virginia Graziani

Redwood Times

Employees of the Southern Humboldt Community Healthcare District can look forward to raises and possible improvements in benefits in the new year, as SHCHD's governing board approved changes to compensation and health insurance at their last meeting of 2013.

At the Monday, Dec. 30 meeting, board members agreed to offer an across-the-board raise of $0.50 per hour to all non-contract employees, as well as committing the district to developing a merit wage increase system.

The $0.50/hour raise is the third across-the-board raise in less than three years. All employees received a $1/hour raise in 2011 and a $0.50/hour raise in July 2013.

The lowest wage previously paid to district staff is $12.50. Beginning this week, these employees will be receiving $13/hour. "We are now competitive," said human resources manager Dee Way, who observed that the quality of all employees, but particularly those lower on the wage scale, has improved, which she credits to the increases.

Way has also been researching merit increase systems and reviewing options with district administrator Harry Jasper. Although they are not ready to present a proposal to the board, Way said that they are looking at a system that combines several factors.

First, positions in departments with high numbers of staff, such as nursing, would be divided into levels. Each nurse could advance from one level to the next based on experience and increased responsibility. Each level would have a wage "floor" (minimum) and a "ceiling" (maximum).

If the floors and ceilings for a position become uncompetitive compared to other regional healthcare providers, making it difficult to attract and keep qualified staff, then they could be reset by the board.

Each department manager will be given a budget for raises at the beginning of the fiscal year, and it will be the manager's task to decide how to use the budgeted funds to give merit raises based on yearly performance evaluations.

A knottier issue was employee health insurance benefits. SHCHD offers its staff several different insurance plans, and traditionally contributes an amount equal to the entire premium of the least expensive plan.

Increases in premiums that became effective Jan. 1, including an increase of approximately one third in the cost of the least expensive plan, made a matching contribution economically unfeasible.

At their October meeting, the board voted not to increase the district's contribution beyond the 2013 level. This meant that at the beginning of 2014, employees opting for the least costly plan would have to pay approximately $140 a month for insurance that they previously received at no cost. (See related story, "SHCHD ponders employee insurance," in our Nov. 6, 2013, issue.) All but a handful of employees are enrolled in this plan.

Many employees are not eligible for subsidized insurance under provisions of the federal Affordable Care Act (ACA) and the state plan, Covered California, for a variety of reasons. Furthermore, Jasper pointed out, the subsidized plans are inferior to the district's insurance, particularly because enrollees in subsidized plans are limited to certain healthcare providers.

Jasper presented the board with three options that would reduce the employee's minimum contribution from $140 to $100 per month. Adopting any of these plans would increase yearly costs to the district of between approximately $23,000 and $29,000, if enrollment in all plans remains the same.

Currently SHCHD does not pay any portion of the premium for an employee's dependents, and only four employees include dependents on their coverage. One of the options, which Jasper said he favored, would include contributing nearly $290 toward coverage of one dependent and $482 toward coverage of two or more dependents, as well as reducing the contribution employees pay for themselves to $100 a month.

This option would cost the district $29,000 if the current enrollment remains the same. But if SHCHD makes a significant contribution to dependent coverage, more employees are likely to enroll their dependents, thus increasing the district's share.

Board member Gary Wellborn said that if the district can afford an additional $29,000 in insurance premiums, or even more, he would prefer to distribute that amount among all the employees to cover a greater share of the basic premium.

Offering to contribute to dependent coverage would be beneficial to employees at higher wage levels who are not qualified for subsidies, Jasper explained. The children of lower-wage employees often qualify for Medi-Cal, however.

He also pointed out that while the government offers subsidies to anyone with income below 400 percent of the federal poverty level, the subsidies decrease as the household income approaches the 400 percent level. For a household with an income of 250 percent of poverty level or higher, the subsidy amount declines steeply, so people of middle income end up paying more for subsidized coverage that is inferior to their employer's insurance.

Board member Judi Gonzales asked what would happen if SHCHD stopped offering health insurance altogether, thus allowing all the lower-income employees to apply for Medi-Cal or subsidized insurance.

"Mass resignations!" Jasper replied. If the district offers no health insurance, the "highest-skilled" employees, who are not eligible for any programs or subsidies because of their income, would seek employment with a healthcare institution that offers insurance.

After a long and thorough discussion, the board voted unanimously to approve Jasper's recommended plan, which will offer contributions towards dependent coverage and requires a $100 contribution to the employee's premium in the lowest cost plan.

The board also unanimously passed a resolution that authorizes Way to begin the steps needed to adopt Social Security for employees in place of their current VALIC retirement plan.

The process will take approximately 12-18 months because each step requires notification and time for employees to review their options before the next step. The process ultimately requires approval by the majority of employees to change to Social Security. (See related information in the article on SHCHD's November meeting, "SHCHD airs pain care guidelines," in our Nov. 26 issue.)

SHCHD's current financial position is "very positive," Jasper said as he introduced the monthly financial report.

Net income for the fiscal year to date is $437,743, about eight percent over budget. The annual cost report to Medicare and Medi-Cal, which adjusts payments to SHCHD based on actual costs, has been finalized, and indicates the district will receive additional reimbursements from the government programs.

Patient use statistics are also mostly over budget, including 250 emergency room visits in November, approximately 10 percent over budget, acute care and swing beds in the hospital 40 percent over budget, and all skilled nursing facility beds in use, as usual.

Clinic visits were below budget by about 15 percent for the month of November but only one percent below budget for the fiscal year to date. Clinic visits have increased somewhat over this time last year, however, so the clinic is seeing an upward trend, Jasper said.

Another indication of financial strength is the continued decline in accounts receivable aging, meaning the time it takes for the district to receive payment after billing for a service.

Jasper credits this improvement to the services of consultants, Data Systems Group (DSG), which has been assisting with billing functions for the last several months, and Diane Meredith Gordon (DMG Consulting), who recently stepped in to analyze SHCHD's needs and help them prepare for outsourcing their billing.

Gordon said that due to the complexity of medical billing, healthcare providers have "entered the era" when a stand-alone hospital, especially in a rural area, cannot adequately manage its own billing and revenue cycle, Jasper reported.

Therefore more small healthcare organizations are outsourcing their billing. The SHCHD board approved beginning the review of outsourcing options at their November meeting. Jasper said they have now reached a point where the district should "move toward putting [an outsourcing contract] out to bid."

Again, Jasper told the board that outsourcing will not require a reduction in staff. Current billing staff will be trained to "focus on the front end"; that is, accurate registration of patients to ensure that records are correct.

DMG is also helping to educate the medical and nursing staff on "charge capture" - making sure all services are correctly charged, and helping to develop "a clear process" prior to outsourcing.

Many rural hospitals are failing financially, Jasper said, adding, "We are fortunate. We're going in the right direction, finding the best experts... I'm especially proud of our staff for working with them."

Gonzales said she'd like to be able to talk to Gordon, the consultant, directly at a board meeting, and other board members agreed. Jasper said the board could schedule a discussion with Gordon at a future board meeting.

In other business, the board authorized Jasper to purchase of a new chemical analyzer for the lab at a cost of $100,000. The old chemical analyzer is at the end of its useful life, Jasper said. A discount of $25,000, down from the list price of $125,000, was available to SHCHD only if the board made the decision before the end of the year.

Additionally, the board authorized Way to pursue hiring a promising candidate for clinical lab scientist (CLS) at $71 per hour. Currently, SHCHD's lab is staffed by an offsite manager and a contracted CLS. If hired, the new CLS would be a district employee.

"It's incredibly hard to find a CLS, it's a nationwide problem," Way said.

Finally, Jasper acknowledged his chagrin when he saw clinic medical director Dr. Marcin Matuszkiewicz holding up a photo of Jasper in the recent SHCHD staff picture in the Redwood Times.

Jasper works offsite one week a month while spending time with his children in Utah. He is often out of town attending conferences, and even when in his office, he is unavailable to staff while working on financial reports.

Therefore, he appointed operations manager Kent Scown as the "go-to" person for general questions when he is unavailable, asked the board to appoint Dr. Matuszkiewicz as chief medical officer, and re-affirmed patient care coordinator and director of nursing Sarah Beach as the point person for all nursing and emergency room issues. Dr. Doug Pleatman will continue as medical director of the hospital.

Jasper praised the staff for all the improvements that have been made in the past year. "I haven't been more proud than I am right now with our wonderful staff," he said.

Board president Barb Truitt concurred, adding that she has been hearing many positive comments from community members recently.

The next SHCHD board meeting is scheduled for Thursday, Jan. 30, at 1 p.m. in the Dimmick meeting room at the Garberville hospital. The public is welcome to attend and time will be made available for public comment.