Updates on exciting initiatives and financial news

 

 Service Excellence Advisor graduation

Yesterday was the Service Excellence Advisors’ (SEA) graduation ceremony, and it was a great event to kick off this team of frontline workers’ journey into the realm of teaching service excellence to all MPMC staff. Members of the administrative team spent two hours yesterday morning in a question-and-answer session, and I believe I speak for the entire administrative team when I say that the SEA members are going to make MPMC shine!

It was awesome to feel the positive enthusiasm in the air during the event. The team is truly passionate about its work, and the advisors are eager to roll out the program. Thank you to the Service Excellence Advisors for their hard work! Speaking personally, I truly believe they will have a positive influence on our operations and that everyone will want to follow their lead in this initiative.

 

Centura Health management agreement

One important topic we have been discussing recently is the Centura Health (CH) management contract agreement. The goal was to sign this at the March 26 board meeting. However, as we mentioned in the Connect with Cole meetings, MPMC’s bondholders sent a consultant out to assess the overall operational and financial health of MPMC. All parties have decided to put the signing on hold until this report comes out, which is expected to be in the next week or so. MPMC has had nothing but positive communications with the consultant, and the leadership team feels confident about the impending report.

 

Medicaid reimbursements and cash collections

One very good piece of news is that Medicaid has sent MPMC notification that MPMC has been underpaid for quite a while. Medicaid failed to adjust their reimbursement models to the current models. This means that MPMC will be getting a total reimbursement of about $650,000 over the next couple of months. This is great news and puts MPMC in a better financial position!

Another good note is that MPMC was in the black for month of February to the tune of about $88,000. Also, upfront cash collections have drastically increased from $80,000 in January to $125,000 in February. We are approaching the $125,000 mark already for the month of March. This is huge for our bottom line.

The revenue cycle is seeing vast improvements. Kudos to Jodi Docheff and the Patient Financial Services and intake staff, Patti Bushey and Health Information Management staff, Bethanie Reynolds and Mary Jo Hargadine and the entire nursing staff!

We are making gains, and we know this is no small part due to the team effort we are all exuding. Thank you, everyone, and keep up the great work!

A letter from the CEO.

Dear Middle Park Medical Center staff:

At last week’s Board of Directors meeting, a few employees expressed their interest and concern in Middle Park Medical Center’s current situation and opportunities for the future. I, along with the board and the leadership team, welcome employee input and feedback and am encouraged by the passion and energy shared.

I understand that our employees want information about the achievements, challenges and decisions of our hospital’s leaders, and I want to share that information in timely and effective ways. The leadership team is working to implement such strategies – under advisement from the lean workgroup focused on communication and through the work of our human resources and public relations departments – ranging from email and newsletter communication to leadership rounding and employee meetings with me.

Our Service Excellence Initiative – with its Advisors, Council and lean workgroups – is one way that the leadership team and the Board of Directors are exhibiting our commitment to each of our employees. We strive to gain meaningful feedback from you as we all work to improve the service we provide every day in our communities. We are investing in you and striving to provide you with the resources and opportunities you need to feel successful and satisfied in your job.

The hospital is experiencing some financial constraints that are encouraging us to reevaluate some of our business strategies to decrease expenses and increase revenue. Optimizing value is about more than just finding places to cut costs. We want to maximize resources to increase our return on investment. Improving efficiency and effectiveness means doing our work better, not just cheaper. Please be assured that during our discussions, patient safety and satisfaction are at the forefront of our decisions and that we will maintain the same top-notch patient care that we have continuously provided.

In December 2013, Middle Park Medical Center used monies held in reserve to make the bond payment associated with the Granby facility. Bond covenants require that MPMC replace the monies back into reserves within the next six months.

I, as well as members of the leadership team and Board of Directors, will be meeting with the bond holders this month to tour our facilities and assure that we are able to comply with the bond covenants. So far, our bond holders are satisfied with our operations, and our relationship has been strengthened by these communications.

We will be able to pay back our reserves and continue forward with our reliable payment schedule. However, we will be looking at cost-saving measures to keep this organization moving forward and financially strong. We have already implemented a spending freeze to eliminate non-essential expenditures.

One primary resource for improving our financial stability – and therefore the ability to continue to provide high-quality care to the residents of Grand, Summit and Jackson Counties – is to consider a management agreement with a larger health system.

In August 2011, Centura Health and MPMC signed an affiliation agreement to establish an expanded system of care for MPMC. Currently, Centura Health and MPMC are exploring opportunities to expand their affiliation agreement which may include a management agreement.

Under a management agreement, Centura Health would provide management and leadership expertise under the direction of a Centura Health-employed chief executive officer, appointed by Centura Health and approved by the MPMC Board of Directors.

Through the proposed management agreement, the Board of Directors would retain its governance and authority over MPMC as well as fulfill its ongoing role to provide the strategic direction of the hospital. The CEO would run the hospital operations on a day-to-day basis and work with MPMC to identify areas where additional clinical and operational services, education and resources are needed. MPMC staff would have significant support and access to colleagues and partners throughout Centura Health with whom they can discuss challenges, explore best practices and obtain feedback to help determine high-value health care solutions for our communities.

The details and negotiations of a management agreement are ongoing and are sensitive legal matters that require us to maintain confidentiality until an agreement is signed. The Board of Directors aims to sign the agreement at its March 26, 2014, meeting.

In recent years, we have enjoyed a positive and uplifting relationship with Centura Health and look forward to the additional benefits a management agreement could bring – lower operating costs, improved negotiating power with vendors and an expanded marketing approach to draw new and returning customers.

Other future cost-saving measures may include: staff adjustments and realignments, a moratorium on overtime without explicit pre-approval, service line revisions, a service price increase, the 401k match becoming a discretionary benefit based on the organization’s financial performance, selling unused equipment, and renegotiating insurance contracts to ensure maximum reimbursements for services rendered.

Please be assured that each of these decisions is made with much consideration and research while keeping patient care our highest priority. We understand that change is hard and can cause some to have feelings of uncertainty about MPMC’s future. I want you to know that this is hard for everyone, including myself, the leadership team and the Board of Directors. We value each and everyone one of our employees and are carefully deliberating to make the best decisions possible for all of us and the community.

These decisions are also made under the guidance of our 2014 strategic plan, carefully built with input from the leadership team, managers and the Board of Directors. We are committed to staying true to the ideals and priorities presented in our strategic plan and use it as our guide for making difficult decisions.

I hope you will take the time to review our strategic plan, sent out as an attachment with the all staff email and available on the main page of MPMC’s intranet – intranet.kmhd.local.

I want to note that the financial challenges MPMC is facing are not unique to us. Rural hospitals throughout the nation are facing looming challenges. Health care has been on an unsustainable track, with skyrocketing costs and inefficient systems producing uneven results. The pressures on the health care delivery system are becoming more urgent. Reduced reimbursement rates and demands for proof of performance mean that we have to improve our efficiency and operational effectiveness every year just to stand our ground.

Please contact me if you wish to discuss any of the items discussed in this letter further or provide cost-saving suggestions. Also, look forward to an announcement soon about face-to-face staff meetings with me to hear your feedback and answer your questions.

We are moving in the right direction, and I am confident that with some carefully considered operational and strategic changes, we can correct our financial challenges.

Thank you for staying positive in this time and for continuing to provide the best patient experience possible!

 

Thank you,

Cole White
Chief Executive Officer

Getting lean and mean...

Rural hospitals serve 54 million people in the United States.  This is 1/6 of the nation’s population.  One would think that with that number rural hospitals would be more profitable.  However, this is difficult due to the fact that 9 million of the 54 million are Medicare recipients.  According to the American Hospital Association (2014), rural hospitals have the lowest profitability in terms of Medicare profit margins. 

Couple the inability for rural hospitals to negotiate favorable insurance contracts, Obamacare, the cost of needed (government mandated) IT investments, and the increasing self-pay patients; rural hospitals struggle to be profitable. 

MPMC is no different from the typical rural hospital.  Large insurers such as United Health Care reimburse us lower than the Medicare rate on majority of the care we provide to their members.  Considering the number of United Health Care patients we see is as high as 25%, this is a considerable dollar amount.  This is where MPMC’s affiliation with Centura Health (CH) comes into play.  CH has the ability to use its’ large size and clout to negotiate much more favorable terms with United Health Care. 

Kelly, T. (2010) states that “Systems with 50 hospitals have more leverage in negotiating with a health plan, whether it be a small regional in their area or one of the large nationals, than a stand-alone smaller rural hospital has.”

Obamacare, or the Affordable Care Act, has created another monster of its’ own… In order to afford the plans presented and meet the criteria to be insured patients are signing up for low premium- high deductible health care plans.  This means that patients who come into the ER have to meet 5 to 7,000 and sometimes even 10,000 dollar out of pocket expenses before their insurance picks up the rest.  This is difficult for most patients to pay for. 

With the above mentioned, MPMC has a great deal of money outstanding, or in accounts receivable (a.k.a days in A/R), that is owed to us.  This number is in the 7-8 million dollar range.  In this between 40-50% of this are self-pay accounts.  What is interesting is that self-pay (non-insured) is only 10-12% of the patient load, but they account for nearly half of the money owed to MPMC.  The chances of MPMC seeing most of this money are not good.  In short, MPMC cannot pay its’ bills if patients do not pay their bills. 

Next, the AHA (2014) has stated that the increased regulations and need to implement expensive information systems creates strain on the profitability of small hospitals.  It is common knowledge that MPMC has had IT and EHR struggles in the past.  With the affiliation with Centura Health, we have a partner that is committed to providing us with an IT and EHR system that works well.  Also, with The Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, MPMC can recoup 85% of the cost of the system.  That means that the entire cost of the entire system, nearly 2.25 million dollars, will be paid back by the federal government.

While most of this sounds like doom and gloom MPMC does have a plan to be profitable.  This includes:

1.      Implement urgent care services for low level ED visits that require payments up front before services are rendered

a.       Up to 55% of our ED’s are self-pay and most pay nothing

2.      Improved revenue cycle through checks and balances, and move to Centura EHR and revenue cycle systems

3.      Adjusting staffing models to become Lean (or Leaner)

4.      Re-negotiating insurance contracts with Centura’s clout.

a.       Currently United Health Care reimburses us about 40% for the cost our services

b.      All other insurers reimburse 85-95% of our costs

c.       This would mean a large increase in revenue

d.      This is already underway

5.       Selling assets that are not used

6.      Implementing a price increase to become competitive

a.       MPMC has not implemented one in 3 years

b.      Currently some of MPMC’s prices are at 30% of the prices of other hospitals of our size and region, according to Craneware (leading chargemaster software in US)

c.       A discharge from St Anthony’s in Lakewood averages around $70K, MPMC around $7k

d.      A CT scan in Summit costs about $3200, MPMC is $1600

7.      Increasing more referrals to Centura facilities to get them returned for increase swing bed days and services that can be done at MPMC

a.        This includes keeping more patients here for care rather than referring out to other facilities

Those are some of the plans of action that the senior leadership team has identified to become more profitable and sustainable.  In the next two weeks we (senior leaders) will be holding mandatory town hall meetings at various locations to better communicate the issues and address the concerns. 

Thanks for all you do!

 

References

American Hospital Association (2014). Rural health care. Retrieved from: http://www.aha.org/advocacy-issues/rural/index.shtml

Kelly, T. (2010). Small hospitals face heavy weather. Managed Care. Retrieved from: http://www.managedcaremag.com/archives/1003/1003.smallhospitals.html

 

 

A new way of communicating.

As Middle Park Medical Center continues to expand our services to the residents of our communities, the leadership team strives to communicate effectively and often with the MPMC family. We want you to be apprised of the hospital’s happenings without being inundated with emails.

To that end, “all MPMC” will be going through myself and Michelle Balleck, Director of Marketing and Public Relations. We will then be condensing most emails that need to be shared hospital-wide into one weekly email that will arrive in your inbox each Monday. We will make this email simple, to-the-point and bulleted for your ease of reading.

When you have messages that need sent to the entire staff, please send them to "All MPMC" all_mpmc@mpmc.org for inclusion. Messages need to be sent to this email by 8 a.m. Mondays to be included in that week’s organization-wide email.

Exceptions will be made, and emails sent immediately, for any issues that necessitate immediate attention or action.

Please stay tuned as we roll out more communication tools to help us all stay connected over the coming months.

Do not hesitate to contact myself, Michelle Balleck, or any member of the leadership team with your questions or feedback. We want to share information in an effective and efficient way and help MPMC be the best that it can be.

 

Goals for the 2014 year

The Board of Directors recently approved Middle Park Medical Center’s 2014 strategic goals. These goals were put together through the managers of MPMC and vetted by the senior leadership team. Board President Bernie Murphy stated that this will be “our bible” for the upcoming year. This document will be used organization-wide to guide our work throughout the year.

 However, this document will be a living document, which means it will be adjusted as needed. In the quickly changing landscape of health care, organizations must be ready to take challenges head-on. We want to be proactive and adaptable in our important work. The leadership team will prioritize these projects and will work with each of you to make these goals a reality for our employees, our patients and our community.

 If you have any questions about MPMC’s 2014 goals, please feel free to ask any member of the leadership team. Have a great weekend and GO BRONCOS!

Middle Park Medical Center

2014 Goals

Priorities

1: Regulation or requirement
2: Very important/critical to achieve Strategic Pillars and Vision
3: Important

Pillar: Technology

Goals	Time Line	Priority	Lead Team Lead*	Tactics
Implement a functional Electronic Medical Record: hospital and clinics.   ·         Implement Meaningful Use II requirement (regulation)	Dec 2014	1	COO* CQO CNO	1.       Host selection:(complete) 2.       Tactical Implementation Plan: (March 2014) ·         Project Manager ·         Users’ Implementation Team ·         IT Infrastructure ·         Trainer/Training ·         Competency examination
Timely and accurate bills out to patients	July, 2014	1	CFO* Finance Services Director	1.       Develop measures and benchmarks: (February) 2.       Complete a plan to achieve benchmarks: (April)

 

Pillar: Growth

Goal	Time Line	Priority	Lead Team Lead*	Tactics
1.       Grow surgery 2.       Increase additional outpatient services by minimally two service lines. 3.       Establish a three year growth strategy	Dec. 2014	2	CEO* CMO CNO	1.       Complete market assessment: March) 2.       General surgeon on board: (January) 3.       Successful recruitment of the following specialties/services: (first quarter) ·         Ophthalmology ·         Podiatry ·         Retina specialists ·         Urgent Care 4.       Assess feasibility of new service opportunities: (October) ·         Oncology: chemo ·         Pain management ·         Microbiology

 

Pillar: Organization

Goals	Time Line	Priority	Lead Team Lead*	Tactics
Develop and implement standardized salary structure	June 2014	2	HR Director* CEO	1.       Define core competencies: (April)
Decrease staff turnover by 33%	December 2014	2	HR Director* CEO	1.       Initiate employee satisfaction: (March) 2.       Incorporate Centura turnover measures: (May) 3.       Develop focused strategies for retention: (July)
Implement 3 to 5 lean projects that result in system efficiencies across sites (supplies, people, services, information/ communication)	Jan 2014	2	CQO* AHA	1.       Identify projects and measures: (January)
Build medical staff engagement	June 2014	2	CMO* AHA	1.       Create and disseminate CMO job description: (January) 2.       Appoint medical staff to MPMC committees, teams, projects and strategic planning: (first quarter) 3.       Restructure medical staff performance and compensation model: (April)
Implement a Compliance Program	June 2014	1	COO* CNO CQO	1.        Appoint a Compliance Officer: (January) 2.        Define/refine the Compliance Program: (first quarter)
Standardize internal organizational communication	June 2014	3	Marketing Director* CEO COO CNO	1.       Redesign Intranet: (first quarter) 2.       Establish communication policies: (June)

 

Pillar: Community

Goal	Time Line	Priority	Lead Team Lead*	Tactics
Develop and implement the Ambassador Program	Fourth Quarter 2014	3	Marketing Director CEO CFO HR Director	1.       Define the program (March) 2.       Identify Ambassadors (April) 3.       Complete training (July)
Complete a multi-year Marketing/PR Strategic Plan and Framework	February 2014	2	Marketing Director* CEO	1.       Hire a Marketing Director: (complete) 2.       Complete the 2014 Marketing Plan and framework: (February) 3.       Review, evaluation and adjustment of plan: (ongoing)
Implement a vehicle/vendor to establish and measure patient satisfaction (requirement)	June 2014	1	CQO* CNO	1.       Agreement signed: (January) 2.       First survey initiated: (April)

 

Pillar: Strategic Partner

Goal	Time Line	Priority	Lead Team Lead*	Tactics
Establish ongoing quarterly contact with primary care practices in Grand County.	July 2014	3	CMO* AHA Marketing Director	1.       Identify target practices, liaisons and agendas: (June)
Define and structure the Centura relationship	May 2014	2	CEO* Board	1.       Manage the messaging and transition: (ongoing) 2.       Implementation (June - December)