The new management company for Claiborne County Hospital and Nursing Home might have a rough road ahead, as the organization finished the fiscal year over a half million dollars in the red.
The board of directors voted last week to approve a management contract with Restoration Healthcare, a Clinton-based company. Restoration will officially take over management after the County Commission gives the final approval of the contract at its next meeting August 17. The current management contract holder Mercy Health Partners will leave the facility July 31 and Restoration will take over on an interim basis from Aug. 1 through Aug. 17.
The board voted to appoint Tim Brown interim administrator until a new administrator can be hired. Brown, who is now with Restoration, served as chief financial officer and later administrator for the facility under Baptist Healthcare System.
Under the new contract with Restoration, the management fee will be $19,583.33 per month. Restoration will also receive a bonus based on final audited figures if there is an improvement from the loss position the first year. The bonus will be based on increases after the first year.
“That’s an incentive for us to improve the numbers,” said Steve Clapp, president of Restoration. “It is incumbent on us to keep making sure you have a positive bottom line.”
The fiscal year for the organization ended June 30, and controller Jessica Justice reported to the board that all entities combined finished with a $647,702 loss for the year. Last year, the organization finished with a combined loss of $923,435.
Justice attributed the loss to low revenue, patient volumes being at below budget and salaries being above budget.
“Some managers haven’t been flexing to the decreased volumes,” she stated, explaining that department managers would be forced to send staff home if the patient volumes didn’t support the scheduled staff.
Justice also told the board that volumes are up right now, reporting that there were approximately 30 patients that day compared with approximately 18 on the day of the last board meeting. Chief of staff Dr. Robert Wilmoth reported that there were also higher ER volumes.
“We had 18 surgical patients this morning, compared to about two last week,” he added.
Justice presented the proposed budget for the new fiscal year. Outgoing interim administrator Jack Bryan suggested that Restoration as the new management company have the opportunity to look at it before it is voted on, and the board agreed.
Justice reported that the certificate of need was approved for inpatient rehabilitation, and the facility hopes to open that in October. The organization is also seeking Level Three trauma designation. There are three levels of trauma units.
“That will allow us to keep some patients who have to be transported right now,” she said.
Wilmoth explained more about the designation, stating that University of Tennessee Medical Center’s Level One is the “gold standard” of trauma centers. CCH has received between $45,000 and $50,000 from the state for readiness purposes, he said, and everything is in place for the designation, including full-time surgeons on staff. The facility is “actively pursuing” the designation at this time, he said.
Also in the proposed budget is a two percent merit increase in pay for all employees.
Restoration will be examining the proposed budget and a new one will be presented to the board at a later time.
The next scheduled meeting for the board of directors is Tuesday, August 18.