What’s ailing the hospital?
Editor’s note: This is the second in a series of four questions answered by candidates for the Aspen Valley Hospital board of directors. Two seats on the five-member board will be chosen by AVH district voters on Tuesday, May 4.
Today’s question: What’s your diagnosis of AVH at present?
Name: Richard F. Jacobs, M.D., MBA
AVH is in critical condition in intensive care! Recently, conditions are changing on a daily basis. The principle diagnosis (areas of opportunity) are:
1. Absence of experienced, employed, full-time professional hospital operational leadership.
2. The need for an organizationwide five-star service culture, work ethic and continuous quality improvement mentality.
3. Need to continue to improve honesty, openness and communication with the community.
4. Flawed relationships, “contractual and personal,” with employed and contracted physicians and the general medical staff.
5. Precarious financial position.
The prognosis is guarded. The patient will survive but the rehabilitation and recovery period may be prolonged. The factors affecting the outcome include:
The depth and breadth of the cuts required to balance the budget.
The speed and effectiveness of our ability to identify, interview and select permanent qualified senior management with the ability to efficiently run the hospital, build community respect and confidence, and allow the board to step back from an operational role.
The three most favorable prognostic signs are:
The basic strength and dedication of the people – general employees, technicians, nursing and physician staff at AVH.
The support and high expectations of a concerned and involved community and medical foundation.
The changes that have occurred since Jan 1, 2004.
Aspen, as a community, can have the outstanding quality, cost-effective, health care services it desires. As an AVH board member, I would provide the leadership and vision to achieve this goal.
Name: Bob D’Alessio
AVH is in crisis but that crisis is in the process of being resolved. I can’t indicate that all is well, but we have a strong handle on the problems and a recipe for solving them. Let’s talk about the solutions.
Our most critical need is the area of receivables and cash availability. To address this problem, we have refocused the entire financial area toward timely collections and follow-up on legitimate outstanding balances. We have also obtained additional focus from payers such as Blue Cross/Blue Shield and the international claims insurers.
Unfortunately, we have had to make bad debt reserves for what may very well become uncollectable, but the hit has been taken and the department has been redirected.
Staffing is a big issue with the board. Until recently, we had a staff-to-patient ratio that was too high. Given our seasonality and size, we recognize the need for a higher ratio than large metropolitan hospitals and even small ones not subject to seasonality, but our ratio is still too high. We have recently trimmed staff.
The review associated with this task began with the administrative side of AVH and even extended to the clinical staff. In determining the needed staff reductions, we were mindful of staff members’ length of service and capabilities, but most of all, on potential impacts on the quality of our service.
Our managed physician practices need to be aligned with realistic financial expectations. The hospital provides total practice management to the physicians whose practices we manage. Last year, the hospital lost in excess of $1 million on these managed practices. We need to restructure these contracts in line with established norms. We need to renegotiate the physician reimbursement levels to reflect a fair situation to both the doctors and the hospital.
I don’t feel we need to make a profit on the management of these practices, but we can’t continue to take a loss as we have in the past.
Name: Barry Mink M.D.
The hospital did ignore the warning signs and as a result had a “heart attack.”
It is sick and needs an internist. The heart attack is over, the patient survived, but needs several months of treatment and care to improve. The prognosis is good with appropriate treatment.
Financially, steps are already under way to collect accounts receivable, improve and expedite billing procedures, cut overhead in staffing, cut some of the financial benefits in physician contracts and cut administrative and consulting costs.
It will take a team effort to help the patient get better and rehabilitate. But most important for healing is the hiring of a very good CEO that can manage the hospital efficiently with an open-door policy. Instituting and maintaining good staff relations, and having the financial knowledge and strategy to get us to a higher level in our billing procedures.
Name: Greg Balko
AVH is in a time of crisis and in dire need of new leadership and vision. There is fiscal uncertainty, a need for a new CEO and CFO, and poor staff morale with the recent staffing reductions.
The financial woes involve two major areas: billing and cash flow. As most of your readers know, billing has been a problem at AVH for many years. Recently, the hospital’s accounts receivable were as high as $20 million and the operating losses of 2003 were elevated to $11 million.
Coding and billing for medical services is a very complicated process that is constantly changing due to government and third-party payer requirements. Nevertheless, AVH needs to either quickly correct its problems in billing or outsource it to a vendor that can provide a better service.
Cash flow has been trending in a negative direction. Recent staff reductions have reduced the expense side of the equation, but AVH needs to find new ways to grow its revenues. If elected, I will focus my efforts on finding new ways to help expand our revenues.
The search for the new CEO is in my opinion the most important area for the new board to address. It is not the function of the board to micro-manage the everyday decisions facing the hospital. The board should provide vision and decide on larger matters affecting the future of the facility.
Finally, I wish to recognize the staff at AVH for the professionalism they display day in and day out. With the recent staff reductions, morale has obviously been affected. The hospital needs a board representative who can help improve the communication and morale of the facility.
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