Re: MORE ON FULTON HOSPITAL -- BIG NEWS

by **Paul2CV** Wed Oct 05, 2011 10:24 pm

Hi forum,

I understand that Fulton Hospital has rejected Baxter Hospital's overtures to form a union of some kind. Why on earth would they walk away from that hope? If I read right between the lines it was out of concern for job loses. Here is the article from the Village Journal. Your thoughts?

Hospital board votes to stay independent, chairman resigns

Wednesday, October 5, 2011
Richard Irby, Staff Writer

Four days after voting to reject an offer from Baxter Regional Medical
Center to take over management, the Fulton County Hospital Board of
Governors has taken new steps to stabilize finances and remain
independent.
Oct. 3 Special Meeting

At a special meeting on Oct. 3, the board accepted a Letter of Intent
from the LHC Group to buy the hospital's home health license for $1.7
million.

The board discussed paying off its debts and maxed out line of credit with the money.

After an executive session to discuss personnel issues, Dr. Jim Bozeman made a motion regarding cost cutting.

"I move that we put the cost cutting measures into effect that were suggested by our department heads," Bozeman proposed.

The board did not elaborate on the motion, which was unanimously
approved. It had asked department heads for recommendations on staff
cuts, however.

At a Sept. 26 meeting, Tommy Barnhart, of the Dixon Hughes accounting
firm, indicated department heads had proposed staff cuts that would
reduce payroll by $369,000. So it appears a major layoff is on the
horizon.

After the Sept. 29 decision not to pursue a partnership with Baxter
Regional, Board Chairman Jerry Estes, who first proposed seeking a
partnership with a larger hospital, resigned from the board.

Vice-Chairman Bill Pace is now serving as Chairman.

County Judge Charles Willett has named John Ed Welch to fill the
vacancy created by Estes' resignation. That appointment must be approved
by Quorum Court before Welch can serve.

Sept. 29

Special Meeting

On Sept. 29, the hospital board held a special meeting to discuss the
proposal Baxter Regional made two days earlier, but there was no real
discussion of the offer.

After then board chairman Jerry Estes called the meeting to order,
board member Danny Perryman said, "I'd move that we remain independent,
and that any and all prior proposals be declared null and void.

The motion was seconded by Jerry Blevins, after it was amended to, "We reject the proposal from Baxter Regional."

Board member Bozeman said a possible influx of cash from the sale of
the hospital's home health license has not been finalized, and a
decision on the Baxter Regional proposal did not have to be made
immediately.

"We know changes have to be made. We know they are going to be tough
decisions," said Bozeman. "We just don't have to make a decision, at
this point. We don't have to accept or reject anything, at this point."

The motion to reject Baxter Regional's proposal went to a vote, however, when no further board comments were offered.

The Baxter Regional management offer was rejected by a five to one margin, with only Sue Hertzog voting against the motion.

Department Head

Concerns

After the vote, Hertzog and Perryman immediately left the meeting,
while other members stayed to go through a list of questions and
comments that came out of a meeting of hospital department heads on
Sept. 27.

Many of the questions were about Baxter Regional's management proposal,
including whether Baxter Regional nurses would be assigned to Fulton
County Hospital to replace current nursing staff.

Specific questions about Baxter Regional's proposal were deemed "moot" by the board, since it had rejected the offer.

One question from the department head meeting asked whether the
ambulance service could be made a corporation, separate from the
hospital.

Jennifer Perryman, who attended the meeting, explained that ambulance service director Tim Hodges had raised the issue.

"Tim had mentioned that a lot of facilities do independent
(ambulance service) because there is a way to capture higher
reimbursement (from insurance companies and Medicare). Tim Hodges is
gathering more information," said Perryman.

If the Baxter Regional offer was rejected, department heads asked if an
outside company could be hired to help with hospital management,
physician recruitment and other needs.

Dr. Bozeman responded that Baxter or Ozarks Regional Medical Centers
may still be willing to help the Fulton County Hospital, and physician
recruitment is especially important, since two local doctors are 65
years old and will have to be replaced, "at some point down the road."

Another department head question was, "Can physicians be addressed for lack of utilization of Fulton County Hospital?"

Bozeman replied, "Yes, that can still happen."

The department heads also indicated suggestions to address hospital
problems, made by the hospital's accounting firm, QHR, a private
hospital management company, and Baxter Regional, should be considered
and acted upon.

"We got a lot of good information through this process we are going
through," Bozeman said, "and it's up to us to implement as many of those
things as we deem appropriate."

Baxter Regional's

Proposal

Baxter Regional had indicated it would cut hospital staff, because hiring had increased, while patient volume had declined.

It also proposed cutting the Mammoth Spring ambulance base from 24
hours a day to 12 hours, because the ambulance service is losing about
$150,000 a year.

Baxter Regional proposed to manage Fulton County Hospital for two
years, for a fee of $15,000 a month, plus the salary of a CEO. After two
years, it would have begun paying a fee to lease the hospital.

It indicated it would keep existing services and work to reduce
hospital debt, upgrade computer systems to meet new federal requirements
and add new services to increase revenue.

Some board members appeared concerned that, if the management agreement
was ever terminated, the hospital would have to pay Baxter Regional
for improvements it made to the hospital.

Baxter Regional's attorney explained such a clause was necessary to
protect it from being terminated, after making investments and returning
the hospital to profitability.

In making Baxter Regional's proposal, CEO Ron Peterson told the board,
"Health care is a hard, tough industry to be in and the only way, I
believe, to make it is to work together...so that we can all succeed."

In voting against a partnership with Baxter Regional, the hospital
board rejected the advice of companies it consulted about its financial
and operational problems. Dixon Hughes, the hospital's accounting firm,
the QHR hospital management firm and Baxter Regional all stated, in
appearances before the board, that very few small, rural hospitals can
continue to survive independently in a tough economic environment, with
more Medicaid and Medicare reimbursement cuts on the way.

Home Health

License Sale

One ray of hope the board is counting on is the unexpected offer from
LHC, a company which currently pays the hospital $5,000 a month to lease
the hospital's home health license, to operate its own home health
agency.

LHC, a Louisiana based company that operates North Arkansas Homecare
out of Salem, has issued a letter of intent to buy the license for $1.7
million dollars.

"That money would give us some breathing room," said board member
Blevins, after the vote to remain independent. "It seemed like Baxter
wanted us to pay them to take it (the hospital) over. We have to try to
make it on our own."

Board member Bill Pace agreed the $1.7 million dollars would allow the
hospital to catch up on bills, and give it time to rethink its future.

"But, when you owe a million, the money's going to go like that," said Pace, snapping his fingers.

According to Pace, "We need outside professional help. Health care is too complicated these days. We can't do it on our own."

One citizen called the hospital crisis "a wakeup call" for employees
and the entire community. She said the hospital needs to make drastic
changes and, if the license sale goes through, the money the hospital
will receive will give it some time to develop a plan for the future.

Even though Baxter Regional's proposal is off the table, hospital
employees remain on edge, worried about the security of their jobs.

"We're all on pins and needles," said one employee. "We're trying to
concentrate on our jobs, but it's hard because no one knows who will be
next (to be laid off)."

The board vote to implement "cost cutting measures" only increases the fear and uncertainty.

© Copyright 2011, Area Wide News
Story URL: http://www.areawidenews.com/story/1770625.html

by **Paul2CV** Wed Sep 21, 2011 11:13 am

Hi Mike,

Let's take this article apart in terms of the larger issue of a real hospital in the area and the basic quality of care:

According to Barnhart, Fulton County Hospital is not alone, as it faces a financial crisis. Nearly all of the nation's 2,000 small and rural hospitals are having trouble staying afloat, and the situation will, likely, only get worse, as state and federal governments cut Medicare and Medicaid reimbursements to deal with budget deficits.

"The trend is, most are finding they must partner with somebody, because it is getting increasingly difficult for small, rural hospitals to stand completely alone," said Barnhart.

I feel sorry for both the adminsitration and staff of Fulton who have had to deal with the National health care mess of "cut, cut, cut" and try to provide services to a rural area desperately in need of them. It is the small communities who get hurt the most.

Arnold explained the morale of hospital employees is currently low, because of the prospect of job cuts and the general uncertainty over the hospital's future. But Arnold added the small staff puts a lot of extra pressure on physicians, as they work long hours in the emergency room, make rounds to see patients who have been admitted and tend to their clinic patients.

Let me translate. You can't take professional employees and work them to death in a context of employment uncertainity and expect a quality hospital.

So the answer is merger. They are looking to "go big" by affliation. This story is what many of us have said all along. We need BIG -- not small, not band-aids. We need access to QUALITY that only LARGE can provide.

As the local hospital seeks a partner, Barnhart listed some of the advantages of allowing a larger hospital to enter the picture:

*A financially stable partner would have access to capital, while Fulton County Hospital cannot currently borrow, and has limited cash flow.

*A larger hospital should be able to help recruit physicians to the hospital or, at least, share some of its staff physicians.

*A larger partner should have better purchasing power to help hold down costs for insurance, supplies and equipment.

*A partner should be able to provide management expertise to help the hospital deal with challenges.

Barnhart said there were many levels of partnership, ranging from sharing services to a lease agreement to a complete merger.
Barnhart added a larger partner will probably seek a line of control of at least 51 percent. That means it will want to appoint most of its board of governors, with the existing board serving in an advisory capacity.

The question is: Will we get what we really need from the merger? I hope so. Good luck Fulton in your talks. I hope it goes well. Negotiate with the well-being of the Community first and foremost in mind, not simply the hospital's own desire to stay open. We need you to be strong.

by **mike** Wed Sep 21, 2011 10:18 am

Here is the link

http://www.areawidenews.com/story/1762723.html

by **Paul2CV** Thu Sep 15, 2011 5:45 pm

Hi Forum,

This is important news and bears on the general topic of the urgent need for a quick response to medical care in this area and the role of a larger hospital. I wish Fulton well as they confront a very real problem.

From the Village Journal:

Hospital board ready to hear two partnership proposals

Thursday, September 15, 2011
Richard Irby, Staff Writer

Monday, Sept. 26 is the date Baxter Regional Medical Center and Ozark Medical Center have been invited to make their pitches to lease the Fulton County Hospital.
The Fulton County Hospital Board has provided financial records and other information the hospitals have requested, and both continue to show interest in leasing the financially troubled local hospital.

"One of them's pretty much got a proposal ready now," attorney Jim Short told the board during a special meeting on Sept. 6. "Both do it at the same time would be my recommendation. Give them a week or so and let them both present at the same time."
Rather than schedule another special meeting, the board discussed hearing the two hospitals' proposals at its next regular meeting on Sept. 26.
That would give the hospitals nearly three weeks to finalize their proposals.
"Anybody have any difficulty making that meeting?" asked board president Jerry Estes. "I really would like for the entire board to be here."

Hearing no objections, Sept. 26 was set to hear the hospital presentations.
Board members have been looking at spending and staff cuts to deal with mounting debt. Some have hoped to find a way to allow the facility to remain an independent hospital.

But Tommy Barnhart, of the Dixon Hughes accounting firm, did not give much hope that would be possible.
Barnhart and Jason Sanders, an associate, appeared at the special meeting to discuss the financial outlook and make recommendations concerning the hospital's future.
"What we need is a plan from the board, a financial plan for the sustainability of the hospital," Barnhart told the board.

After reviewing the hospital's $1.3 million dollar loss last fiscal year, its $600,000 in debts and its inability to borrow more money, Barnhart said the annual audit, which is being prepared, paints a bleak picture.

"The numbers, on the surface, don't look very good, as you obviously well know," said Barnhart. "The audit team (report)...may have what we call a "going concern" opinion on it, and the going concern opinion will simply say that we're not sure that...this hospital can be sustained in business for the next 12 months."

Barnhart said he knew the board was working hard to cut spending but added, "You cannot cut your way to prosperity." Barnhart was commenting on staff cuts which department heads recommended, at the board's request.

"The staffing cuts...that were proposed...$369,000 in salaries and benefits. That really would net the hospital only $108,000 in positive cash flow or savings," Barnhart explained because, as salaries are eliminated, Medicare and Medicaid will reduce what they pay the hospital.
Barnhart supported controlling spending, but said cutting staff too deeply would "cut into the meat of potential patient quality and satisfaction."

"So what's the alternative? The alternative is, you have to grow. It's all based on volume. You have to look for ways to increase the volume of paying patients," Barnhart told the board.
According to Barnhart, Fulton County Hospital is not alone, as it faces a financial crisis. Nearly all of the nation's 2,000 small and rural hospitals are having trouble staying afloat, and the situation will, likely, only get worse, as state and federal governments cut Medicare and Medicaid reimbursements to deal with budget deficits.
"The trend is, most are finding they must partner with somebody, because it is getting increasingly difficult for small, rural hospitals to stand completely alone," said Barnhart.
As the local hospital seeks a partner, Barnhart listed some of the advantages of allowing a larger hospital to enter the picture:

*A financially stable partner would have access to capital, while Fulton County Hospital cannot currently borrow, and has limited cash flow.
*A larger hospital should be able to help recruit physicians to the hospital or, at least, share some of its staff physicians.

*A larger partner should have better purchasing power to help hold down costs for insurance, supplies and equipment.
*A partner should be able to provide management expertise to help the hospital deal with challenges.

Barnhart said there were many levels of partnership, ranging from sharing services to a lease agreement to a complete merger.

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