Preliminary NVH budget approved

TONASKET – The North Valley Hospital Board of Commissioners, with a healthy crowd in attendance, approved its 2014 preliminary budget at its Thursday, Nov. 14, meeting.

As discussed at the Oct. 31 meeting, Chief Financial Officer Helen Verhasselt presented a budget designed to stem consistent financial losses in the districts Long Term Care division. NVH will, over time and as beds become available, trim the Extended Care facility’s number of beds from its current level of 58 down to 40, including 33 paid for by Medicaid, three through Medicare and four by private insurance.

“This is something we will be working toward,” Verhasselt said. “A target to try to attain.”

The rationale for those changes includes reducing the ratio of Medicaid patients to privately insured, since Medicaid reimbursements (locked in at the same rate since 2007) do not fully cover the cost of care, and to increase utilization of the hospital’s swing beds.

“For the exact same care we give a Medicare resident on the Extended Care side, as opposed to a swing bed patient on the hospital side, the reimbursement is much higher for the district as a whole,” Verhasselt said. “So we want to try to market the swing bed program going more and take care of as many patients there to help the district’s financial position overall.”

The budget operates with a number of assumptions, including (but not limited to) patient volumes staying at approximately the same level, a five percent increase in hospital (though not Extended Care) room rates, a two percent step increase in wages and benefits, and an eight percent increase in employee insurance costs.

Verhasselt said that changing the way services purchased by the Long Term Care division from the hospital are allocated will help the overall bottom line.

“I’ve been talking to our cost report preparers and auditors,” she said. “I have gotten the OK to move forward with changing our allocation method. It still needs to be approved by Medicare. That will decrease some of the expense on the Extended Care side and that is taken into consideration here as well.”

The bottom line, Verhasselt said, is to continue to make progress on the hospital’s warrants while making it profitable enough to to be on the razor’s edge of losing money.

In the current year, the district is projected to finish with a total loss of about $86,000. The hospital division stands to land more than $859,000 in the black, with Long Term Care losing $945,000.

The 2014 budget includes a $179,000 loss in Long Term Care and a $546,000 profit for the hospital, for a district-wide net income of about $368,000.

“This is what we’re going to work toward,” Verhasselt said in response to a question by Don Atchison. “If there is something that happens in the middle of the year or a few months down the road, if something changes in our circumstances … (for example) if the state changed the rates for Medicaid on the Extended Care side, we would re-look at the whole thing and potentially submit a revised budget.”

Accusations addressed

NVH Administrator Linda Michel defended the hospital against accusations that were made in local media outlets in recent weeks, including a radio broadcast and a letter in the Gazette-Tribune.

She took issue with a number of points made during a radio discussion, including:

  • that the senior leadership and board had gotten stagnant.

“This board and this leadership team are not stagnant,” Michel said. “They are constantly working on things … to improve the district to keep it viable for years to come. Every employee is engaged in that, too.”

  • that the hospital is inconsiderate of its customers’ needs and experiences, including in the emergency room.

“We get a lot of thank you,” she said. “Our Coast to Coast physicians (in the ER) are emergency certified. I can’t tell you how many lives they’ve saved this year… We do phenomenal work in our ER. I am very committed to having them here because they bring another level of service to our community that they don’t have elsewhere.”

  • that the board and administration were not transparent.

“We have tried so hard this past year to get to the community the information they want,” Michel said. “We’ve published a newsletter, we’ve had more verbal and written reports at our board meetings. Yet those board meetings are not consistently attended by our community, so how can they know if we’re being transparent or not?”

  • that as a public rural hospital, making a profit should not be a goal.

“None of us are trying to turn this into a private hospital,” she said. “However, we can’t just break even at the end of the year or you have no money to put back in your facility and do the things you need to improve patient care. Yes, you have to make a profit. You don’t have to sock it away forever; you have to make a profit to reinvest back into the community and into the hospital.”

  • that the hospital district was spending too much money on outside consultants

“From 2001-09 (before Michel’s arrival), $621,000 had been spent on consultants. Since 2010, we’ve had two: one for the dietary department, and one to increase our rates with Medicare.”

  • that the hospital put its warrants “on hold” while completing the second floor surgical center.

“The county won’t allow us to do that,” Michel said. “We still have to pay that money. It took us three years to finish the second floor because we took it slowly and tried to be responsible with what were doing.”

  • that calling health care a difficult thing to understand was insulting.

“That wasn’t my intent,” she said. “I know there are trained financial people in this community. But as we look at the intricacies of this budget, Helen knows things none of us understand. She can explain them and then we understand … but that is her expertise.

“I’m a little weary from being accused of not being honest – and the team – and I think it’s time I set the record straight. You can believe what I said, or you don’t have to.”

Michel also responded to a letter from last week’s Gazette-Tribune that said she needed to “update her information” regarding Critical Access Hospital funding. Most of her response involved reading portions of the article (written by this reporter), which contradicted what the letter’s author claimed Michel said.

“I am offended by this,” Michel said, “and for the hospital by this.”

VA clinic

North Valley Hospital’s VA Clinic held an open house on Tuesday, Nov. 12, which according to Director of Ancillary Services Noreen Olma and Business Development Coordinator Terri Orford went very well.

“It was better than I ever expected,” Olma said. “We had a great turnout and great support from the Spokane VA.”

Olma said Spokane sent eight specialists and that seven new veterans were enrolled into the system.

“It was really special to have the interaction with the veterans,” Orford said. “They were very appreciative… Theyve said it’s the most thorough exam in their entire lives in the VA system. When I asked why, they said, ‘Because they actually put their hands on us and talk with us.’

“They are so inundated in Spokane and Seattle with the volume, they can’t dedicate the time that we can to our veterans.”

And finally …

Phase I of the boiler replacement project came in significantly under budget, Kelly Cariker said.

“Between the project savings and the contingency fund we came in $27,946 under budget,” he said, noting that a contingency fund for overruns also went unused. “And the boiler’s in and running.”

The hospital’s warrants owed to the county stood at $799,489 as of Nov. 14.

“They are up,” Verhasselt said. “October was a three paycheck month, and we paid our quarterly taxes in October, too.”

The Board of Commissioners will not meet in late November; its next meeting is Thursday, Nov. 12.