Board Meeting - July 10, 2006

The regular meeting of the Board of Commissioners of Whidbey Island Public Hospital District was called to order at 6:02 p.m. by Board President, Roger Case, M.D. Present were Commissioner Saugen, Commissioner Case, Commissioner Zaveruha, Commissioner Schoenknecht and Commissioner Miller. Chief Executive Officer, Scott Rhine, Chief Financial Officer, Doug Bishop, Chief Information Officer, Tom Tomasino, Chief Nurse Executive for Home and Community Services, Judy Moore, Chief Nurse Executive for Acute Care Services, Jacque Scott, Chief of Staff, Dr. Terry Lee, Dale Roundy, Esq., Dr. Ben Hu, Carolyn Pape, Frank Hemeon, Trish Rose, David Marshall and Mike Powers, reporter for the Coupeville Examiner, were also present.
President Case asked if there were any points of order to discuss of which there were none.

Minute Approval
Minutes from the May 8, 2006 regular Board meeting were approved as presented in a motion by Commissioner Miller, seconded by Commissioner Schoenknecht. Motion carried.

Independent Financial Audit Report FY2005
Don Hansen from the Moss-Adams firm presented audit results for 2005, rendering an unqualified opinion. Josh Lewis, Health Care Services manager, was also present. Mr. Hansen presented highlights of the overall report, changes to the financial statements, financial highlights, and discussion of issues facing hospitals. Mr. Hansen noted that there were several unusual events that occurred in 2005, including: a) Medicare’s underpayment to the hospital due to utilizing the rural hospital wage index; b) Medicare’s alleged and substantial overpayment to the hospital for chemotherapeutic billings. He noted that revenues due to volume increases had only gone up 2%, while expenses had increased faster. Mr. Hansen indicated that Critical Access designation was a positive decision and will be important for the future of the hospital. He cautioned that we still needed to work on expense control, as the remainder of payors are not reimbursing on a cost based formula. The hospital needs to continue to work on building cash reserves in order to replace capital equipment on a timely basis; and, compete for scarce human resources. He also pointed out that consumers and business organizations are much more aware of billing practices and that all hospitals need to make sure that billing policies are communicated well and are transparent to the communities served. As recommended by the auditors, the hospital will continue to focus on quality, outcomes, cost efficiency, customer convenience, customer friendly billing, increasing patient portion of bill and impact on collection, discounts and charity.

Medical Staff Report
Dr. Terry Lee, Chief of Staff, presented the following medical staff appointments and reappointments for approval:
Douglas M McKee, M.D. – Courtesy Staff Appointment
Commissioner Saugen made a motion, seconded by Commissioner Miller to approve the Courtesy Staff Appointment as presented. Motion carried.
Dr. Lee reported that there was one resignation – M. Omar Shokier, MD, Courtesy staff for Pathology.
Dr. Lee also reported that the medical staff met in executive session regarding urology services, and are recommending to Administration and the Board that we do all we can to keep this a viable service.
The medical staff is also working on policies and procedures to improve efficiency and set expectations regarding behavior.

Scott Rhine, CEO noted that he was glad that Dr. Hu was in the audience for tonight’s meeting. He reported that he, Jan Rose, and representatives from ECG met with Dr. Hu to review his needs. Mr. Rhine stated that while it is desirable that Dr. Hu stays in the community, it is Administration’s recommendation not to employ Dr. Hu. Administration is recommending that Dr. Hu be paid $325.00 per day for excess call coverage over the ten days minimum per month that are required by the medical staff bylaws. Dr. Hu would submit a call calendar, and the hospital would issue Dr. Hu a monthly check for excess call worked in the month. This is consistent with the current arrangement with the anesthesiologists, and what the hospital would be willing to pay other specialists if requested and needed.

Dr. Hu stated that there are too many issues to resolve, and that pay for excess call could keep his practice open through the next quarter; but that he does not see this proposal as a long-term or final solution. Dr. Hu stated that while it seems like a good idea to bring in another urologist, it would put him out of business. Dr. Hu feels that the hospital needs to work on a model that will provide long-term solutions, and that this is not just a problem here or a hospital problem. The problem is the ongoing efforts of Medicare to reduce physician reimbursement. Dr. Hu felt that the data presented by ECG is based on large urology groups, and not a good comparison for services here. Dr. Hu feels that a production formula needs to be developed and established that will last. Dr. Zaveruha felt there needs to more dialogue and analysis between the hospital and Dr. Hu. Mr. Rhine again stated that in this particular situation, he was recommending against purchase of the practice and employment. He indicated that he is not opposed to employment in some circumstances. He also indicated that he would continue to talk with Dr. Hu and agreed that ongoing communication was important. Dr. Hu noted that Whidbey General Hospital must be competitive, but also have geographical and isolation as factors to consider. After discussion by the Board, Commissioner Saugen made a motion, seconded by Commissioner Miller to approve $325.00 per day for call coverage for Dr. Hu in excess of the ten days of call required by the medical staff bylaws. Motion carried.

Individual Items: (Discussion and/or Action)

1. Ratification of UFCW Local 21 Service Support Contract – Carolyn Pape, Human Resources Director, reported that the hospital had a great negotiating team for this contract to include Doug Bishop, Tom Tomasino, Beth Stout and labor attorney Bob Sebris. Carolyn noted that there are 182 employees under this contract, and reviewed the highlights of the changes that were negotiated. After review and discussion, Commissioner Zaveruha made a motion, seconded by Commissioner Schoenknecht to approve the proposed changes to the UFCW Local 21 Service Support contract as presented. Motion carried. Tom Tomasino thanked Carolyn for her hard work on the reorganization of the Service Support group pay classes.
2. 100-Day Objectives – Scott Rhine, CEO presented a draft of the second 100-day objectives for
   July-September, 2006. Two items (Quality and Patient Safety and Plan for Building Remodel) were added under top priorities, and Rapid Response Team implementation was added under 100-day objectives. Commissioner Miller made a motion, seconded by Commissioner Schoenknecht, to approve the second 100-day objectives as presented with the stated additions. Motion carried.
3. EMS Levy Educational Presentation – Roger Meyers, EMS manager presented education on the upcoming EMS levy that will be presented to the community. Roger also noted that he and Administration are talking with the fire districts about a combined BLS program, which has met with support from the fire districts for the most part. The fire district commissioners and chiefs are working on their financial portion of the combined program effort.
4. Resolution #263 Appointing District Treasurer – After discussion and review, Commissioner Saugen made a motion, seconded by Commissioner Miller to approve Resolution #263 designating Frank Hemeon as the Treasurer of the District (in the past, the county treasurer has served this function. This will take effect November 30, 2006). Motion carried.

Staff and Status Reports by Administration

1. Critical Access Report – Scott Rhine reported that there have been a total of two diverts due to Critical Access, although the second one was questionable as to the reasons for the divert, as it may have been due to staffing or acuity. Administration is pleased with staff efforts working with staff and physician efforts working with the Critical Access system over the last six months.
2. Financial Report – Doug Bishop, CFO reported that revenues were down in April at $7.0 million. Cash was $1.1 million and AR days at 65. Operating expenses were below budget by $160,000, with the bottom line for April a negative $156,734. Year to date through April showed operating expenses below budget by $1.2 million, and a slightly positive bottom line at $62,000. May financials showed gross revenue at $7.8 million, cash at $1.7 million and AR days at 65. Operating expenses were 2.4% below budget. Year-to-date net income is at $332,955. Most tax revenues were received in the month of May.
   Cost Reporting: The 2005 Medicare cost report was completed, and Doug noted that the hospital is being underpaid for inpatients, and will request consideration of increasing the interim inpatient per diem rate. There is no change warranted for outpatients.
   In June, a trial balance was sent to the cost report preparer, who will run an interim cost report estimate for the first six months of 2006.
   Doug reported that the 2004 cost report settlement was a receivable of $79,000 and estimated a 2005 cost report settlement coming to the hospital in the approximate amount of $221,000.
   Mr. Rhine reported that as of July 1, 2006 new Medicaid claims will be reimbursed under a cost based methodology. He conveyed thanks to Brenda Suitor of the Washington State Hospital Association (WSHA) and Bev Court from the State for their participation in helping to make this happen.
   Mr. Bishop also reported that we are still working with legal counsel and CMS regarding the Neulasta pharmaceutical billing issue. He felt that we are close to having at least a preliminary decision.
3. South Whidbey Health Care Services Report – Scott Rhine, CEO reported that he and Doug Bishop will meet with Linda Moore, Goosefoot CEO, to review the letter of intent with the hospital, and also to talk about how much land is needed for the potential project at Bayview.
4. Nursing Documentation and PAC System Implementation – Jacque Scott reported that there are learning curves with the new nursing documentation system in most part due to the various levels of computer and typing skills. There have been "super users" designated to help, and Jacque feels positive about the new system. Tom Tomasino noted that the implementation went well, and that the system has been well received by staff. There have been fewer issues than initially thought, which are being worked on. Jacque reported that issues are being discussed in staff meetings, and tip sheets are being sent out which have been helpful.
   The physician portal is being tested, and will be implemented over the next few months.
   The PACs system has been implemented and is working well. Commissioner Zaveruha stated that he used it today and commented that it was very high quality.
5. Other – Mr. Rhine reported that Dr. Burnett, OB has been ill and off work for three weeks. There was a lag in OB coverage with Dr. Riederer on vacation part of the time that Dr. Burnett was ill. Jan Rose and Molly Nagel worked to get locum tenens coverage, and were able to get coverage all but 2.5 days.

Other Board Items
August Leaders Conference – The Leaders Conference will be August 18 and 19, 2006, and will focus on quality reporting, major future issues and strategies and the hospital’s financial future under Critical Access Hospital designation. Mr. Rhine asked that Board members get additional ideas to him this week about the upcoming Leaders Conference.

Public Questions or Comments
Community member, David Marshal commented that he recently had an orthopedic procedure done here at Whidbey General Hospital and had a very positive and pleasant experience, and wanted to say thank you for the great care.

Consent Agenda Items:

1. After review and discussion, Commissioner Saugen made a motion, seconded by Commissioner Miller to approve the write offs as presented for May in the amount of $190,160.58. Motion carried.
2. Commissioner Saugen made a motion, seconded by Commissioner Miller to approve the write offs as presented for June in the amount of $275,242.36 Motion carried.
3. Vouchers (for May 2006) audited and certified by the auditing officer as required by RCW 40.24.080, and those expense reimbursement claims certified as required by RCW 42.24.090, have been recorded on a listing which has been made available to the Board. Commissioner Miller made a motion, seconded by Commissioner Saugen to approve vouchers #376717 and #376776 in the total amount of $10,358.39. Motion carried. Commissioner Zaveruha abstained from the review, discussion, vote and written approval of these vouchers due to a potential conflict of interest.
   Commissioner Miller made a motion, seconded by Commissioner Saugen to approve vouchers (for May 2006) #376407 to #377231, excluding #376717and #376776, in the total amount of $4,015,842.49.
   Motion carried with all commissioners voting.
4. Vouchers (for June 2006) audited and certified by the auditing officer as required by RCW 40.24.080, and those expense reimbursement claims certified as required by RCW 42.24.090, have been recorded on a listing which has been made available to the Board. Commissioner Miller made a motion, seconded by Commissioner Saugen to approve vouchers #377278 and #377295 in the total amount of $13,584.54. Motion carried. Commissioner Zaveruha abstained from the review, discussion, vote and written approval of these vouchers due to a potential conflict of interest.
   Commissioner Miller made a motion, seconded by Commissioner Saugen to approve vouchers (for June 2006) #377232 to #378070, excluding #377278 and #377295, in the total amount of $5,323,230.34. Motion carried with all commissioners voting.

There being no further business, the meeting was adjourned at 9:10 p.m.