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Defending AVH board

Bob D'Alessio

Recent editorials regarding AVH board members and myself have painted a picture of the board that is, in my opinion, both false and misleading. What the community needs to understand is that all of us have worked harder than any AVH board in history.

During a period where hospitals go belly-up on a regular basis, with Medicaid and Medicare reimbursement at 35 to 40 percent of customary billings, indigent care taking more and more of our bottom line, and salaries and benefits moving up at a record pace, it would appear, by your editorials, that the board at AVH has not met its fiscal responsibilities. This could not be further from the truth.

Life for an AVH board member is far from glamorous. It’s hard work and plenty of it. Board members have put all of their efforts into keeping AVH solvent. So when I read the likes of Andy Stone and the other editorials that have emerged recently, I wonder what planet these so-called journalists are on.

Here are the facts directly from the accounting records at AVH:

– September 2000 net receivables were $7.9 million and at year-end

were $8.4 million. I only have days cash on hand data from December 2000 and that was 33.7 days, a very low balance.

– 2001 net receivables ranged from a high of $10.5 million to a low of $7.7 million. Days cash on hand ranged from a high of 114.7 days to a low of 88 days. Cash was not an issue in 2001.

– 2002 net receivables ranged from a high of $12 million (December) to a low of $8.8 million. Days cash on hand ranged from a high of 129 days to a low of 83. Again, cash was not an issue that year.

– 2003 was where the real problems started. Net receivables went from a high of $15.1 million (October) to a low of $7.3 million at year end. The $7.3 million seemed to be an anomaly given the rest of the year. Days cash on hand in 2003 ranged from a high of 82.8 days to a low of 43.8 days March of 2003. Although it hopped all over the place, the trend was definitely down.

Also of note is the fact that during the time period between 2000 and 2002 we had three independent audits performed by a CPA firm that indicated no problems at all in the accounts receivable area. The problems in both net receivables and cash on hand manifested themselves in 2003.

What did your board do? At the beginning of 2003, we had two consulting firms in place trying to get things under control. By November 2003, when receivables got significantly bad, we accepted Randy Middlebrook’s resignation and brought in Dr. Bob Karp as acting CEO. About three months later, we accepted (chief financial officer) Verna Bartlett’s resignation also.

From the time of Randy’s resignation until the present, your board has worked hard to assist Dr. Karp and our interim chief operations officer, Jim Carris, in day-to-day operations. I wonder how the contenders for the board seats would react to meetings day after day and into the evenings.

For your editors to paint a public picture of a board not doing its job is totally unfair. At this point, I care more for my fellow board members than I do for myself. The dart-shooters who put me and the other AVH board members down have no idea just how good these folks are.

Let me tell you what happened on my watch (the last six years) that the editorialists seem to ignore:

– We built a midvalley clinic that has been a huge success as an outreach to midvalley residents.

– We did numerous significant remodels of AVH to better serve the community.

– We replaced just about every major piece of technology at AVH to keep equipment state-of-the-art with great help from the Medical Foundation.

– We expanded the base of AVH from primarily an inpatient facility to primarily an outpatient facility (from 60 percent inpatient base to a 60 percent outpatient base). This move kept AVH financially stable for a great part of the six years I have served as a board member. Many hospitals who relied on inpatient revenues have gone out of business in the last six years.

– Over the last six years, AVH gross revenues have grown from approximately $24 million to the current $60 million.

– AVH has expanded practices where needed and helped doctors new to the area when they provided a needed specialty.

– AVH has also made strides toward expanding orthopedics into a true center of excellence.

– We have initiated actions at the federal level to have AVH designated a “critical access” hospital, thereby giving us about a 45 to 50 percent increase in net revenues for Medicare patients, a growing segment of our population.

Given the above, could all the board members possibly have been asleep at the switch?

Aspen’s citizenry should not be ill-informed, and once they are informed they will be better positioned to make an informed decision on Tuesday. I believe that the finances at AVH are recovering at the present time, and will continue to get stronger. I have full confidence in John Sarpa, Elaine Gerson and John Jellinek. I hope I can continue to work with them. We all care too much about AVH to see it less than successful.

Bob D’Alessio is a member of the Aspen Valley Hospital board of directors.


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