Hospital Board Approves the 2013 Capital and Operating Budgets

The Texas County Memorial Hospital December board of trustees gave approval for the 2013 capital and operating budgets at their monthly meeting on Tuesday.

The $758,948.00 capital budget includes several items for new portions of the hospital expansion that is currently underway. 

“You will see that many of these items are for our expansion,” Linda Pamperien, TCMH chief financial officer, said.

The largest capital expenditure was $183,350.00 for a digital mammography unit for the TCMH radiology department.

Digital mammography uses digital receptors and computers instead of x-ray film to help examine breast tissue for breast cancer.  The electrical signals can be read on computer screens, permitting more manipulation of images to allow radiologists to more clearly view the results.

Digital mammography also exposes the patient to less radiation, and digital mammography may lead to fewer retests for patients.

The radiology department will also get two new x-ray units, an additional ultrasound unit, and a new computed topography (CT) unit, but those items were included in the $18 million price tag to build and to provide equipment for the expansion.

“The operating budget reflects an increase in outpatient radiological services,” Pamperien said.  “With a faster CT unit and an additional ultrasound unit we should be able to provide more services, and the new equipment will also work faster allowing us to fit more patients in.”

New computers for each patient bedside area in the second floor medical surgical department of the expansion are budgeted at $53,300.00.

Two birthing beds totaling $36,191.40 are budgeted for the obstetrics department.  A new esophagastroduodenoscopy (EGD or upper endoscopy) scope is budgeted for $39,904.25.

The TCMH laboratory  has already taken delivery of a $71,550.00 Abbott immunochemistry analyzer, and payment will be made on the analyzer in January 2013.

The2013 capital budget is slightly more than the $748,995.00 capital budget in 2012.

Board members also approved the 2013 operating budget that projected gross operating revenue of $69,846,176.00 and net operating revenue of $216,063.00.

Pamperien explained that the projections have a less than one percent profit margin for the upcoming year.

For 2013, gross revenues are projected to be up 12.6 percent over 2012  due to the addition of a hospital-owned retail pharmacy—Hutcheson Pharmacy–which TCMH purchased in July 2012. 

The budget also includes seven to 10 percent increases for emergency department usage, inpatient  and outpatient radiology usage and other services related to the expansion which is slated to open in mid-2013.

Pamperien explained that the operating budget also included an increase in contractual adjustments for hospital patients, a figure which is on the rise annually.  TCMH will begin paying interest on the new construction loan and will have additional depreciation expense due to the new construction, too.

“We continue to operate very lean,” Pamperien said.  “Our managers know that we expect them to be very conscientious about any expenditure for their departments.”

TCMH anticipates an 11.4 percent overall increase in hospital expenses.

“It’s hard to know what our expenses will be for the new construction,” Wes Murray, TCMH chief executive officer, said.  “Right now, we can only estimate what our future utility usage will be based on the size of the new construction.”

Pamperien outlined areas where TCMH has planned or plans to save funds in the upcoming year.

“Our new employee health insurance has saved us $83,000.00 this year,” Pamperien said, adding, “We are reducing or changing hours for our night house supervisors, too.”

The TCMH physical therapy department and Home Health of the Ozarks are working together to provide physical therapy for home bound patients by adding an additional physical therapy assistant and utilizing physical therapists already employed by the hospital’s physical therapy department.

The 2013 operating budget does not include funds for TCMH to continue to operate the TCMH Fitness Center in Houston.

Pamperien and Murray agreed that the TCMH Fitness Center has never operated at a profit, and they explained that current membership doesn’t provide enough revenue to cover the monthly rent for the building without taking employee wages and benefits into consideration.

“We just can’t afford to keep funding the Fitness Center at a loss when our primary focus is our hospital and clinic patients,” Murray said, calling the funding cut a “business decision”.

Dr. John Duff, CoxHealth representative and a member of a regional YMCA board, explained that it is “hard to make ends meet” with current fitness center models and expenses.

The Houston Optimist Club expressed interest in keeping the Fitness Center open and functioning for the members.

 “A fitness center contributes to the well-being of the community,” Omanez Fockler, chairperson of the TCMH board of trustees, said, applauding the Optimist Club’s interest in continuing the service.

The Optimist Club owns the building that houses the TCMH Fitness Center, and TCMH has been paying a monthly rental fee for the building since the Fitness Center moved into the basement in the fall of 2010.

Following the TCMH monthly board meeting, Murray met with the Houston Optimist Club, and the organization will take over the Fitness Center to make a seamless transition of ownership and to retain current members.  Details of the transition in ownership are being finalized.

“We encourage the community to continue to support the Fitness Center under the new ownership,” Murray said, “And we wish them great success.”

In other operating budget details, Pamperien explained that the operating budget does include plans for three additional full-time staff members in 2013.  Two additional housekeeping staff members will be added to assist with cleaning and floor maintenance in the new construction area and one additional registered nurse will be added in the new, 13-bed emergency department during peak times.

“We are planning to operate very fiscally conservative in 2013 because of the many unknown factors in the upcoming year,” Murray said.

The operating budget also includes the addition of Joshua Wolfe, MD in August 2013.  Wolfe will work full-time at the TCMH Family Clinic in Licking where he will practice obstetrics and family medicine.

“There are always additional costs incurred in bringing on a new provider, but we believe Dr. Wolfe will bring new business to TCMH,” Pamperien said. 

According to Murray, studies have shown that a physician practicing full-time in rural American provides a local economic boost in addition to generating revenue for the practice.

“We believe our expansion and the new patient care areas are going to help TCMH grow market share, but we are also proceeding with caution due to the changing landscape of healthcare reimbursement,” Murray said.

In his administrative report, Murray explained that “a lot is going on behind the brick walls” of the hospital’s expansion project. 

Currently, the new radiology department is the closest to completion.  New equipment for the department is set to arrive on February 18, and installation of the new equipment will begin on February 20.

“Our timeline for relocation has been moved to the first part of April,” Murray said.  “We will move into the first floor in April, and we will move into the second floor a month or two later.”

Renovation will also begin inside the hospital in the next few weeks, too.

The new construction and renovation is slated for completion in September 2013.

Murray also reported that the last day of full-time work for Steve Hutcheson, pharmacist and former owner of Hutcheson Pharmacy, is Friday, January 25.

“I can’t say enough about the tremendous job Steve has done in helping the pharmacy transition to new ownership,” Murray said.  “Steve has ensured that everything is running efficiently and properly going forward.”

Ann Kennedy, a local pharmacist, has assumed the role of full-time pharmacist at Hutcheson Pharmacy.  Kennedy has an extensive background in retail pharmacy, and Hutcheson has trained her since the end of December in the operation of Hutcheson Pharmacy.

Hutcheson will continue to fill in at the pharmacy as his schedule allows.

Murray and TCMH board members, Fockler, Janet Wiseman and Dr. Jim Perry, OD, attended a hospital network meeting with Phelps County Regional Medical Center in Rolla; Ozarks Medical Center in West Plains; Salem Memorial District Hospital in Salem and  Fulton County Hospital in Salem, AR. 

The hospitals—all within a 200 mile radius of each other—are studying the formation of a hospital network.  The network would have a membership, and member hospitals would be able to join together to provide services, to save money and to operate with greater efficiency.  Examples of the network operations might include purchasing employee health insurance; sharing a physician specialist or purchasing equipment.

“The member hospitals pay an annual membership fee based on the size of the hospital,” Murray said.  “As needs arise or as opportunities present themselves, the member hospitals have the opportunity to opt in or out of specific things in the network.”

Murray offered the example of an orthopedic surgeon:  If the network member saw a need for an orthopedic surgeon, but none of the member hospitals could afford to hire one full-time, the network might employ the specialist and farm him or her out to the member hospitals as needed.

The network also provides the opportunity for member hospitals to take part in a lean management study for organizational efficiency and work optimization, individualized for each hospital. 

The board members agreed that TCMH should continue to pursue discussions regarding the hospital network.

“In this time of healthcare change, I believe it’s important that we look at all possibilities for increasing revenue and operational efficiency,” Fockler said. 

Fockler, formerly a long time TCMH employee and director of nursing at TCMH, shared her memory of hospital reimbursement changes from the 1980s.

“That’s how we ended up with hospice and home health services at TCMH,” Fockler said, “We were looking for additional revenue streams.”

Board members also unanimously approved a motion to refrain from an April election for a board trustee.  Russell Gaither of Houston will take the post in April when the term of current member, Mark Forbes, expires. 

Gaither filed for the county post and remained unopposed when filings closed for the 5-year term earlier this month.

Pamperien presented the financial report for the month of December. 

The hospital ended the month of December with a positive bottom line of $466,541.78 and a positive year-to-date balance of $25,041.17.

TCMH collected additional funds from the federal government for utilization of electronic medical records, and those funds helped offset losses for the year.

Present at the meeting were Murray; Pamperien; Duff; Doretta Todd-Willis, chief nursing officer; Joleen Senter Durham, public relations director; Dr. Charlie Rasmussen, chief of staff; Dr. Shaun Flaim, vice chief of staff; Dr. Charles Mueller, medical staff secretary, and board members Fockler; Wiseman and Perry.

Board members Mark Forbes and Mark Hampton were absent.

The next meeting of the TCMH board of trustees is Tue., Feb. 26 at 12 p.m. in hospital’s basement meeting room.