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1996-07-17 Regular Meeting i F ISLAND HOSPITAL RY BOARD MEETING ly 17, 1996 BOARD PRESENT: Wayne Stevens, Alice Knowles, Russ Grimm, Jack McFarland, Mary Monroe, Mark Withrow, M.D. EXCUSED: Gretchen Saupe, Mark Buckley, Gil Bane STAFF PRESENT: Kate Fitzgerald, Pam Foreman, Stan_ Thompson, Mary Munk, Judy Trousil OTHERS PRESENT: Kent Alend, LHS With a quorum present, the meeting was called to order at 7:00 p.m. I. ACCEPTANCE OF AGENDA MOTION Mary Monroe made a motion to accept the July 17, 1996 agenda. i SECONDED Jack McFarland seconded the motion. Motion passed unanimously. II. MEETING MINUTES OF MAY S, 1996 MOTION Alice Knowles made a motion to accept the May 8, 1996 minutes as amended. SECONDED Mary Monroe seconded the motion. Motion passed unanimously. t III. MEETING MINUTES OF JUNE 19, 1996 MOTION Alice Knowles made a motion to accept the June 19, 1996 i minutes. ! SECONDED Jack McFarland seconded the motion. Motion passed unanimously. i I IV. COMMITTEE REPORTS E i A. Financial Report - Mary Munk Mary Munk presented the pre- audited combined financial statements for the period ending June 30, 1996. The income statement showed a net income of $29,440.60 for June and a year -to -date net income of $540,875.95, $243,326 of which came from contributions from the Lamme Estate. The total operating I f i i 2 i cash amounted to $1,047,483. The total operating cash and funded depreciation was approximately $1.7 million. Ed Myers commented that in a small hospital, what is most important is not the size of the gain but its consistency. KIH /CC has been experiencing gains steadily in the past five years. Kent Alend of LHS concurred with Mr. Myers that KIH /CC a ranks very well compared to other small hospitals. There were more gain months in 1996 and the losses were not as big as in previous years. Mr. Myers clarified that the amount of gains really depends on patient loads. Ms. Munk reported that gross patient revenues for June were $913,134.61 and year -to -date gross patient revenues were $10,602,457.79. Accounts receivable days fluctuated around a 78. The goal is to bring it down to 70 days. Total accounts receivable for the month was $70,517 and accounts receivable for period ending June 30, 1996 was $2,690,368. The year-to- date accounts receivables over 90 days is high at $881,212 but KIH /CC is trying to get this figure down. a Dr. Mark Withrow asked the Finance Director how the accounts receivable figure can be decreased. Ms. Munk responded that accounts receivable usually goes up during busy months. KIH /CC either attempts collection of over 90 days accounts receivable or writes them off. Mr. Myers clarified that some over 90 days outstanding accounts can actually be collected. These are usually Medicare or Medicaid accounts. g Mr. Stevens inquired about the NBA loan program. Ms. Munk stated that the program was effective in collecting past due receivables. Mr. Myers explained how the NBA loan program works but he emphasized that not all patients can be candidates for the loan. Loan applicants are subject to very stringent screening. As an aside, Ms. Munk informed the Advisory Board that an electronic billing system has been implemented in KIH /CC. Lastly, Mary Munk informed the Board that the auditors from Deloitte and Touche will be in KIH /CC until Friday and will be back to conclude their audit on the last week of July. The audit report draft will be out by August 12. MOTION WAS MADE AND SECONDED TO ACCEPT THE FINANCIAL STATEMENTS. MOTION PASSED UNANIMOUSLY. B. Public Relations Committee Report - Pam Foreman e ! Pam Foreman informed the Board that the Hospital is currently I sponsoring a spot that airs before the Hotline over KVOK. HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -2- i x There was a proposal to sponsor Paul Harvey but with further review, the committee decided that sponsoring Mr. Harvey will be too expensive. The consensus was to keep the old radio spot and make sure that materials to be aired are current. The next issue of Healthy Times will be out in September. The proposed contents include: Managed care and what it means in Kodiak Networking and why affiliate Financial update Orthopedics and focus on Dr. Shrirang Lele A candidates forum will be held on August 19 and 20. This forum will focus on health care issues. C. Construction Update - Stan Thompson Stan Thompson informed the Board that the status of the hospital construction did not change much. Originally, there should be heat in the new building by July 15. However, the boilers stalled on its actual fire up because of some stack problems. This difficulty caused about a week's delay in the schedule. There should be heat in the new building by next month. The re -roof of the old facility is 50% complete. E Mr. Thompson reported that the generator for the new hospital is quite large for the building's energy needs. With the generator, the new hospital can actually generate its own power and simply use KEA as a back -up power source. This issue has been under discussion for a while between KIH /CC and KIB and concern has been voiced in the areas of manpower ° impact, noise restriction, environmental issues, and additional fuel costs. Although, there has been no mention of k selling redundant power back to KEA, this is also an issue that should be looked into. i Mr. Myers agreed that there are some issues that need to be addressed especially since the self - generation of power means having a diesel engine run 24 hours a day. There have been no communications with KEA yet but KIH /CC and KIB may need to } speak with the electric association in the future. 3 D. Foundation Board Update - Judy Trousil Judy Trousil announced that the Commitment to Caring Campaign reached its $1 million mark. The total contributions is expected to exceed the $1 million mark since the Administrator of the Fern Fuller Trust requested that the first payment of s HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -3- i a r i the estate be made to the Commitment to Caring Campaign. A donation of $25,000 came from Koniag and $20,000 pledges were received last weekend. To date, there are $50,000 additional confirmed pledges. Ms. Trousil also informed the Board that the Campaign officially ended on June 15, 1996. A motion was made and passed during the Foundation Board meeting to recognize Fern Fuller and Bill Lamme, although only the Fuller Trust's first payment will go to the Foundation. Lamme will be recognized because the funds from his estate has been designated for equipment purchase. Ms. Trousil presented a sample of the fish plates which will be used to recognize the top contributors to the Campaign. The plates will be made locally by a Coast Guard person. The following are the ranges for the different size fish plates: u Fish Plate Size Contribution Amount Small $ 5,000 - $ 9,999 Medium $10,000 - $24,999 Large $25,000 and over Mr. Myers added that a big plaque outlining Fern Fuller's contribution to long -term care will be placed in the Extended Care Center. Another plaque will be placed in a specified hospital wing and will be dedicated to Lamme. This plaque will state that the equipment in the specific wing was bought from funds from the Lamme estate. s Judy Trousil reminded the Board of the victory party to be held on August 24. About 200 people have been invited to this party including contributors and the Board Assembly. There will be tours of the new hospital during Business After Hours on August 30, at 5:30 - 7:30 p.m. The unveiling of the wall s and the first presentation of a $200,000 check will be held on August 30. Ms. Trousil also stated that the Foundation Board is helping to sponsor community education and the candidates' forum. I Mr. McFarland inquired whether the Commitment to Caring Campaign was officially over. He stated that other non- profits are finding.it difficult to solicit contributions from the public because some donations have already been pledged to the Commitment to Caring Campaign. Ms. Trousil clarified that the Campaign has a 5 -year pledge program but the Campaign I itself is officially over. She also said that other non- profit organizations should not be discouraged in their fund raising efforts because Kodiak is a supportive community. I d HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 —4— s d Mr. Myers explained that the Commitment to Caring campaign generated a lot of money because it was not af raid to go after people with the ability to donate large amounts. In addition, members of the Advisory Board took the time to make presentations and obtain donations themselves. Ms. Trousil added that all the local banks made large donations to the Campaign. Also, over $75,000 were contributions from Hospital employees alone. Judy Trousil reported that her job officially ended on June 30 but there are still projects to be overseen such as the Grand Opening which will be held in October. Jerome Selby, KIB Mayor, wanted Ms. Trousil to stay on another year. However, it is not clear whether the Hospital will take care of collecting the pledges or if the Foundation Board will be responsible for collections. Either way, Judy Trousil stated that she had a wonderful year in KIH/CC and enjoyed serving on the Foundation Board. Ed Myers commented that KIH/CC does not have a clear idea of how the transition of bookkeeping and daily functions will take place. However, KIH/CC will keep the downtown Foundation Office for at least 6 months to be used by Home Health and to provide space for Dr. Lele. Meanwhile, the Foundation Board needs to decide whether their Finance person will collect the pledges or if KIH/CC should be in charge of collections. V. Old Business A. Administrator Recruitment Ed Myers said he spoke with Joe Smith, LHS VP of Operations, regarding the progress of the Administrator recruitment. Apparently, the number one choice, Don James, has declined the position and LHS will start over with the recruitment process. Mr. Myers discussed the possibility of staying at KIH/CC until October unless things change healthwise with his wife. Ed did not believe it was feasible to bring someone in for 30 days to take over while a new Administrator is being recruited. There are too many things going on such as the hospital construction and networking negotiations. B. Construction Budget Ed Myers reported that there will be a funding shortfall dependent on the cost per square footage estimate. McCarthy gave KIB a figure of $145 per square foot for the project including the renovation of about half of the old building. HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -5- With 17,000 square feet, at $145 per square foot, the cost will be about $2.45 million. The old building will be occupied in an "as is" condition except for some mechanical improvements. New paint will also be applied to make the old facility complement the new building. Russ Grimm inquired whether the improvement of the old facility is essential for patients. Ed Myers responded that most out - patient services will stay in the old building. Mary Monroe expressed that it will be hard for morale and quality of care to have the old facility in an unsuitable condition j for another year or year and a half. i Mary Monroe inquired if KIB can go with another contractor or if it is possible to get another figure from SDL. Mr. Thompson responded that only the Borough can make such decision. However, KIB will probably stick with SDL because the company already has the equipment and manpower set -up in Kodiak. Ed Myers commented that KIH /CC is carrying a lot of financing burden. This situation would probably not pose a problem if the Hospital continues to experience good financial years. However, if the existing debts start weighing down on the Hospital, KIH /CC should sit down and discuss the situation with KIB. C. Networking Proposals Wayne Stevens opened the discussion on the Columbia Alaska Regional and Providence Health System proposals. Dr. Withrow reported that the Med Staff met with Providence Health System last week and with Columbia Alaska Regional this week. The Med Staff was not unanimous in its decision but there was preference towards Providence. Dr. Withrow also shared that he spoke with specialists in Anchorage. These specialists have a lot of reservations regarding the networking issue. The main concern is that networking will end referrals to specialists in Anchorage. Personally, Dr. Withrow feels that Providence is a better networking partner because it is a not - for - profit institution. However, he personally does not see the advantage of networking with either hospital because currently he can initiate the referral process with one phone call. Mary Monroe asked whether the Medical Staff thinks that Dr. Lundblad's question on tubal ligation was completely answered. Dr. Withrow replied that two options were given by Doug Bruce -- physicians can either rent back an area for this operation HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -6- i S 7 or Providence will ask for a special dispensation from the Bishop because of Kodiak's unique situation. Mr. Myers added that Doug Bruce had already sent a letter to the Archbishop. If permission is not granted by the Archbishop then other actions will be considered, i.e., condominium assignment or lease. Dr. Withrow commented that although majority of the Med Staff was reassured, there are still some who are concerned that Catholic beliefs will be imposed by Providence Health System. Wayne Stevens commented that although he is not Catholic, he felt comfortable with the care that such a facility provided his wife when she broke her arm. He added that they did not feel any pressure to conform to any Catholic beliefs when his wife was hospitalized. Mary Monroe added that she appreciates the extra care that priests and nuns provide. Wayne Stevens asked what the M -team decision was and how the employees feel about the two facilities. Kate Fitzgerald responded that it seems that the KIH /CC employees have a stronger leaning towards Providence. Ms. Fitzgerald added that KIH /CC nurses are currently obtaining their continuing education with Providence. Therefore, it seems natural to network with this hospital because the nursing staff already feels comfortable with the facility. Mary Monroe inquired about the existing contracts that Providence holds in Alaska. Ed Myers responded that according to a letter from Providence Health System, they are the predominant player in health care contracts in the State and charge about $1,000 /day less than what Alaska Regional in per diem charges. Columbia Alaska Regional, on the other hand, is financially strong and is currently attempting to entice Providence contract holders to use Alaska Regional's services by forgiving the Blue Cross penalty that is imposed if Providence is not used by policy holders. Wayne Stevens reminded the Board that only recommendations are being solicited by the Borough Assembly. KIB can still end up not negotiating with either Providence Health System or Columbia Alaska Regional. Mr. Myers added that there are many items in a lease agreement that are negotiable beyond the lease of physical assets. He added that KIB hopes to create a lease that is a "win -win" situation with the Med Staff, KIH /CC employees and the community. Alice Knowles commented that she was impressed with Columbia Alaska Regional. However, she believes physicians and employees are the important factors in the decision since the HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -7- E n doctors and staff are the ones who actually take care of patients. There was a discussion on which facility has a philosophy closest to the one KIH /CC operates in today. Providence is a non - profit organization affiliated with a Catholic health system while Alaska Regional is a corporation with a bottom line /profit emphasis. MOTION Mary Monroe made a motion to recommend that KIB enter into negotiations with Providence Health System. SECONDED Jack McFarland seconded the motion. AYES Mary Monroe, Russ Grimm, Wayne Stevens, Jack McFarland, • Dr. Mark Withrow NOES Alice Knowles Motion Carried - 5 Ayes, 1 No I Mr. Myers informed the Board that Jerome Selby, KIB Mayor, the KIB legal staff, KIB Finance Department and a representative from KIH /CC will probably be involved in the negotiations. A memorandum from the Advisory Board will be sent to the Borough Clerk's and the Mayor's Office advising them of the Board's recommendation. D. Candidate Forum Ed Myers informed the Board of the plan to hold a candidate forum regarding health care issues. The Foundation Board will work with the Chamber of Commerce to put the forum together. Meanwhile, suggested questions for the forum should be sent to Ed Myers before the second week of August. V. Administrator's Report Ed Myers informed the Board that he spoke with Lee Kiehn in Portland and learned that Don James has not ruled the position out. However, upon speaking with Joe Smith after July 15, it appears that the recruitment process will have to start over again. The Administrator also reported that he had received a letter from Alan Schmitt stating that the Kalcics would like to exercise their option on September 1 to purchase the boatyard. Meanwhile, the Fuller Trust Administrator through her lawyer informed Mr. Myers that she wanted to direct the first year's contributions from the Fuller Trust to the Commitment to Caring Campaign. This amount will put the Campaign funds over the $1 million mark. KIH /CC received funds in excess of HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -8- $50,000 from the Edna Leeka Estate. There is still another $21,000 due from this source. Mr. Myers also expressed his concern regarding possible violations of the COBRA Anti-dumping Act of 1986 in some KANA transfers. A letter will be sent to KANA stating that past practices on patient transfers should be stopped. A workshop attended by selected hospital employees and presented by the Health Care Financing Administration emphasized that no transf ers should be made for cost reasons. Facilities in violation of the Act may be fined up to $50,000 and physicians may be fined up to $10,000. Ed Myers will meet with Pat Branson of the Senior Center regarding the State provided funds of $30,000 intended to study assisted living in Kodiak. The Administrator recommended the use of an experienced consultant to gauge the need and level of use for assisted living units. The Administrator expressed his pleasure with the financial statements for the year ended June 30, 1996. He explained that the Borough has assigned the $3.9 million energy loan to KIH/CC, thereby increasing the Hospital liability by $1.4 million. KIB has retired the $3.0 million anticipation bond with funds from the energy loan. Lastly, Mr. Myers commended the Foundation for their success with the fund raising campaign. He reported that the Foundation Board elected to include Bill Lamme and Fern Fuller on the recognition wall of the new facility. Additional recognition will be in the form of a plaque. Fern Fuller's plaque will be placed in the Care Center and Bill Lamme's will be in one hospital wing yet to be specified. Both will state that the equipment in that wing or in the Care Center was purchased with the help of Lamme or Fuller, accordingly. V1. BOARD AND AUDIENCE COPOCENTS Regarding the issue of COBRA Anti-Dumping Act violations, Dr. Withrow shared that KANA does not have a stable Medical staff and hires locum tenens for 8 months in a year. This practice makes it difficult to trace which physician ordered patients to be discharged. Dr. Withrow recommended obtaining detailed examples of incidents where patients were discharged without being properly stabilized. Kate Fitzgerald responded that reports on improper transfers from other facilities are being incorporated in the TQM program. HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 -9- z Ed Myers announced that a psychiatrist, Dr. Welby Jensen, will arrive in Kodiak early tomorrow morning. Dr. Withrow commented that Dr. Jensen is a well rounded psychologist and is interested in children's psychology. Mr. Myers also announced that the orthopedic surgeon will arrive soon. Mr. Myers introduced Kent Alend. Mr. Alend works for LHS and handles projects as Interim Administrator. i Wayne Stevens complemented the Management Team for its ability to manage costs in a changing environment. VII.ADJOURNMENT The meeting was adjourned at 8:55 p.m. s Recorded by Maribel L. Miller. i Approved by Alice Knowles Advisory Board Secretary HOSPITAL ADVISORY BOARD MINUTES July 17, 1996 —10—