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Memorial Hospital Board votes to continue considering hospital management option

March 1, 2012

The Memorial Hospital of Texas County Board of Control met in regular session Tuesday night, and considered the medical staff’s recommendation to hire Austin, Texas-based NewLight Healthcare to manage the hospital. NewLight was the third management company to present to the board, back on Feb. 7. The company specializes in managing rural hospitals, manages Cimarron Memorial Hospital in Boise City and also works with the hospitals in Beaver and Dalhart.
Dr. Hianto Te, the secretary-treasurer of the hospital staff, gave a presentation in the absence of Chief of Staff Dr. Emmanuel Barias. Te read a letter on behalf of the medical staff that cited the ongoing financial crisis as the motivation for the staff’s recommendation. The staff voted to make the recommendation at its Feb. 14 meeting.
The hospital lost $1,656,220 in cash and invested funds from June 30-Dec. 31, 2011.
“Policies, procedures, investment strategies and overall directional plans that brought our hospital to its current financial situation continue to be implemented,” Te said. “Now with information gathered today (Feb. 28) as of Jan. 31, 2012, we’ve lost $1.7 million. (after posting a loss of $113,711 in January).
“The organized medical staff of Memorial Hospital of Texas County during their Feb. 14, 2012 regular meeting, unanimously voted to recommend to the Board of Control that NewLight Healthcare be immediately retained to provide management and billing services for MHTC,” Te added. “As we all know, time is money.”
The board had earlier asked questions of NewLight CEO Todd Biederman — who returned to Guymon from Austin — and Boise City CEO Lee Hughes. After a 65-minute discussion, the board voted to consider the options NewLight presented, and to take into consideration the proposals by Quorum Health Resources, which presented on Jan. 24, and Health Tech Management Services, which gave a presentation to the board on Jan. 17.
Board chair Mary Beth Ebersole was concerned about the number of uninsured patients who come into Memorial Hospital, and wanted to know how NewLight would address that.
“I think putting in a requirement up front, for the out-patient, for non-emergency cases, is something you need to do,” Biederman said. “And we do that in all of our hospitals.”
Ebersole was also concerned about the aging infrastructure of the current hospital building (the hospital recently made an emergency purchase of two heating and air units for the operating room).
“First you just need to review the facility and have a plan and see what needs to be replaced,” Biederman said. “The cash situation has to be addressed in many areas. Until we can get in and actually do our assessment, I can’t comment on that.”
Biederman said the hospital needs to reduce its days in accounts receivable. The hospital is at about 70 days and needs to get that number down into the 50s.
“That won’t happen in one month, that’ll happen over about a 6-month period,” Biederman said.
Once that happens, the cash flow into the hospital will improve.
“A lot of it is just working with the medical staff and repairing some of the relationships that have gotten damaged, that’s the biggest issue,” Biederman said. “There are partnerships that can be done with the physicians that could have an impact on the bottom line in a positive way.”
Biederman also wanted to quell a rumor that NewLight would come to Guymon and there were five hospital employees they would fire immediately. He said that was not true.
“We don’t even know five employees here,” he said. “So I don’t know where that came from, but I just want to say that’s not true and we’ve never done that in any of the hospitals we’ve worked in. We provide the tools to help everyone be successful. We’ve offered to include our cultural transformation consulting tool, it’s a tool that includes the board, medical staff and all the employees and helps you create an organization that is a value-driven organization.
“We’re not about just randomly coming in and firing people. It would be the exact opposite approach.”
Board member Dallas Mayer wanted to know if NewLight is currently involved in any lawsuits, and Biederman said they were not.
Part of the contract states that the hospital would save $700,000 if it participated in NewLight’s affiliate company’s billing program. Mayer wanted to know how NewLight could make those kinds of deals and still cover its overhead, and whether the company has similar deals at other hospitals.
Biederman said that they have a similar arrangement in Liberty, Texas (located northeast of Houston).
“The answer is twofold,” Biederman said. “We are sister companies. Equalize RCM’s parent company owns one-third of NewLight, so we’re able to structure transactions like that.
“We see a big potential upside here in getting everyone aligned and really getting a culture going, and we anticipate an increase in revenue which will lead to more collections, which will lead to being able to cover our management fee.”
Mayer wanted to know if it came to the point where the hospital does need to be leased, “That bigger company would have the money to actually do something like that?”
Biederman said they could potentially do it.
“They also have investors that they work with that would be interested,” Biederman said. “We’re open to that. If it’s what’s best for the hospital, then that’s great.
“I’ve heard from some county commissioners that the hospital can’t be leased, so if it was something the community wanted to look into, we definitely can help look into that.”
Ebersole said that the billing was done from India, which Biederman confirmed, but said there was a team in the United States, which people here would deal with.
“It’s given us the ability to provide services more efficiently,” Biederman said. “Would anyone here having to be dealing with someone in India? And the answer is no. If there was a billing question, the patient would call the hospital. If it can’t be resolved locally, an account manager in Austin would be assigned to it.”
The board asked several other questions, and eventually voted to consider all the options and meet at a later date to make a decision.

 

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