City Council and the Hospital Commission sat down on Thursday, Aug. 21 for a workshop on hospital finances and perception that started with the commission introducing themselves, most who have a background in the medical field and/or serving on hospital boards. City Finance Director Michael Akins helped answer finance questions, as did ESH CFO Cynthia Asbury and CEO Tiffany Means. Alderman Susane Gruning was in attendance via ZOOM.
Alderman Rachael Moyer said that main concerns were a lack of confidence in the hospital, revenue impacts, and increased spending. The Hospital Commission provided council with several pages of documents explaining answers to questions that council had. Moyer noted the finance software issue that had put $1.3 million of accounts-receivables into cash, and the commission’s fix of moving that money to correct line items, and asked for a validation that the Accounts-Receivable account is correct. She said validation would act as proof that line items were not just being moved without purpose and asked if the hospital could pull a report showing aging account-receivables. She said that the Accounts-Receivable (AR) line item is “…the highest it ever has been listed.”
Asbury said the AR is balanced daily and that Forvis, the company doing a financial audit of the hospital, would ensure the files match up. She said there are timing issues where professional services are being billed out and other items that are causing the AR to be higher. She also said the hospital could pull a report of aging accounts.
Akins noted that with concern with HIPAA, a report would have to be highly redacted to only show the monetary amounts and not specific information. Moyer said that it’s “only an advantage for you to provide that kind of verification” to avoid rumors of financial misconduct at the hospital. Akins also noted that the Forvis audit would show verification of adjustments and that any problems caught in the 2024 audit would help the 2025 financials be correct.
Moyer asked how long until AR is considered bad debt, noting that no bad debt is listed currently by the hospital. Asbury explained that if the hospital and collection agencies exhaust all avenues of receiving payments, then accounts would be labeled as bad debt. She also said that with the hospital moving to more “sophisticated” Electronic Healthcare Record systems, there had been significant cleanup of years of accounts that had not been previously collected on, and some “hadn’t even been billed to insurance.”
Conversation then moved to the request of a mid-year budget review, with Moyer pointing out that municipalities are required to have a midyear review. Hospital Chair Sandy Martin said that when the budget was completed in 2024, the hospital only had a few months of designation as a Rural Emergency Hospital (REH) and did not have a good “baseline” to base its budget.
She said the commission’s goal was to stabilize the hospital and during their mid-year budget review that it was decided that there is still not enough of a baseline of the REH model to make projections for the year. She also said the hospital has “unknowns” with “everything else going on” heading into 2026 and that the commission wanted the new CEO to look at the budget before proceeding. Martin said she took exception to the hospital taking losses in revenue, saying that two graphs show between 2024 and ‘25 that revenue generation has improved.
Moyer brought the conversation back to bad debt, saying the hospital has none listed, as well as no charity care. She noted that in 2024, $1.7 million was listed in bad debt and charity care combined, and in 2023, $2.2 million. She said her concern that if the hospital takes on bad debt again, the hospital will be under budget. She took issue with the “unknowns” saying that the city can make a budget and operate by a budget even with “a ton of unknowns.” That there is no revised budget “is very, very concerning for me” and she was curious if there’s a rural hospital that has zero bad debt.
Martin argued the hospital is aware of its financial situation and while there is not a formalized budget, that the hospital is operating on a budgetary process. She said that it is more important the hospital is accurately recording financials and that it “doesn’t bother me at all that we don’t have a budget to go from.”
Martin defended the decisions to invest in the hospital’s IT, equipment, and staffing saying that if it leads to the hospital in a deficit “so be it, it’s the right thing to do for the hospital and the community.” She also said that because the hospital does not receive taxpayer dollars that the hospital is not comparable to a municipality. Asbury also noted that there is a liability line for bad debt for every month that is rolled into the balance sheet, giving an allowance for contractual bad debts.
Gruning did mention that hearing the hospital is not working from a budget does lead to perception issues and a lack of confidence in the hospital. Martin repeated that the hospital is working from a budget internally.
As Akins and Asbury discussed how the hospital plans out future capital expenses and how the hospital might show that planning in the budget line items, Moyer asked that if the hospital is doing the work and doing projections “What’s the resistance to making it public?” She said that Akins could internally do all of those things, but he presents it because it’s the people’s money. She argued they are in the same position.
Martin was quick to argue saying the hospital “earned it.” Moyer argued that the asset belongs to the city and when you’re dealing with other people’s money “transparency is important.” She said sharing the work with the community would help the community feel better about the state of the hospital.
CEO Tiffany Means interjected, saying that the hospital in the future will work on bringing information more forward to the community to help with its perception and transparency. She said she wants to see the community to come in and see the hospital and talked about her own work experience and said she was already hearing a change in public perception about the hospital’s progress. Means also said the hospital intends to move back to full-time staff over contract workers to decrease labor cost.
Council and the commission agreed to set up a time where council could visit the hospital. No date was specifically set but the commission is to provide aldermen with several possible dates for a joint meeting/workshop and tour.