Finances were the focus at the January meeting of the Claiborne County Hospital Board of Directors, with an overall organizational loss of $352,735 for the month of December. According to hospital officials, some of the factors for December were increased insurance expense, the payment of a third payroll for the month, and continued decline in hospital revenues. The nursing home census was down in December, but has risen slightly in January. There were improvements in some areas, as the accounts receivable days continue to decline, and collections for the month were $2.9 million. Home Health collections had increased, with over $350,000 in collections for December.
The majority of the board meeting was spent in review of the hospital’s management plan; Administrator Tim Brown presented information to the board on the plan, which he said will result in $1.2 million in reduction of expenses for the hospital’s bottom line.
Since the meeting, several employees have been laid off and some positions have been eliminated.
Brown began with a review of the issues facing the hospital when Restoration Healthcare began management of Claiborne County Hospital on August 1, 2009 — there was a much higher operating loss than originally reported for the previous fiscal year, the Chief Financial Officer position was vacant, and the hospital’s audit had not been started. Other concerns were the loss of several physicians in the past year and the delay in completion of the medical office building.
Since that time, Brown said several improvements have been made, from the hiring of Tracee McFarland as the CFO, thcompletion of the audit, and the improvement in accounts receivable days in the area of Home Health. Financing to complete the medical office building has been approved, and recruitment efforts are underway for additional physicians for the area. Also during this period, several staff positions were eliminated through attrition and the consolidation of positions.
Brown reported that, in spite of the efforts made through December, the hospital’s current financial position stood with an overall loss year-to-date of $1.35 million. Additional issues in the last 60 days have included a higher than normal amount of health insurance claims, a reduction in surgical volumes, and proposed cuts in the Tenncare program that, if enacted, will reduce revenues to Claiborne County Hospital by $750,000.
After review of the organizational outlook, including good volumes in some areas, such as EMS, and improvements in other departments, board members felt that expense reductions might not be enough to stop the hospital’s declining financial position. A management action plan was approved to begin immediately that included the management of salaries to current hospital volumes, the termination or renegotiation of certain contracts, and the building of volumes through physician recruitment and increased marketing of hospital service lines. The plan did include the reduction and reallocation of employees in certain areas, with a commitment by Brown that patient care would not be affected by these changes. The targeted impact of this plan and the improvements identified was between $1.2 and $1.5 million.
Brown stated at the conclusion of the meeting, “I appreciate the board’s support in implementing this management plan, and their commitment to the long term success and growth of our hospital. While our current situation is difficult, we will continue to provide quality patient care to the people of the Tri-State area, and will further our goals to position Claiborne County Hospital in a positive financial situation for the citizens of Claiborne County.”