Treasurer Kent Turner said at the Jan. 19 Hospital Commission meeting that the commission’s bank balance as of December 31was $1,219,021, and he told the board he had raised concerns with Scott Stone of Stone Financial about financial transparency. “We do have some serious issues about getting to financial statements primarily being the system itself is a problem… We can’t continue to operate like this. We have significant bad debts that have to be written off which are not recorded anywhere.”
Turner said Stone indicated to him that the financial system used by the hospital, MedHost, is the primary component preventing timely financial statements. Turner’s reply was, “I understand the difficulties, but that can only be used as an excuse so long because we are going to have to do something to get that remedied.” Turner and commissioners discussed changing systems, but there was no vote.
Commissioner Ty Burden stated that the hospital employees need more MedHost training specifically in the area of the general ledger.
CPA Brent Seay, who provided the financial report, introduced himself saying he has 30 years’ experience in accounting, primarily in real estate financial management, mentioning no hospital or healthcare financial management experience. Seay said the hospital’s MedHost system is the most outdated system he has encountered.
Seay also said the contracted CFO position has been extended to Stone Financial through the end of March 2021 and he looks forward to working with the commission.
Profit and Loss reports for the last quarter of 2020 were provided by Seay using a cash-basis QuickBooks system, not on an accounting GAAP basis. Average monthly revenue was $665,000, with the quarter earning just under $2 million in cash receipts.
Average monthly expenses were $657,000, with the quarter paying out $1,972,000 in disbursements. The quarter report resulted in a positive cash flow of $28,000. “We are certainly trending in the right direction,” Seay said.
Accounts receivable billing for the quarter was over $3 million, and depending on collections, he said it should result in higher future revenue.
Seay said an outside consultant was hired to analyze the charge master, and the report said the hospital is missing an annual estimated $900,000 in un-billed or under-billed revenue.
Seay shifted to the cash flow report for the first half of January and said revenues were $246,000 and expenses were $464,000, resulting in a negative cash flow of $218,000. “Revenues are down a bit, from what we were seeing in December,” he said adding that the hospital’s cash balances are down by eight percent due to current negative cash flow.
Not all employees opted for the vaccine
Commissioner Jean Reed reported that Interim CEO, Angie Shaw, had said to her previously that all the staff who wanted the Pfizer Covid vaccine had received their second doses. Burden said 19 out of 68 full time employees received the vaccine, and six additional employees had contracted Covid-19, making 25 employees potentially immune.
“Our acceptance of the vaccine was somewhat lower than what we anticipated,” Burden said hoping that over time more employees will participate. Burden said the hospital is trying to start a vaccine initiative and said, “Unfortunately, right now, today, we do not have any vaccine,” but he said he hopes the hospital will be able to distribute Covid vaccines to the public in the future.
Michael Merry said he had very little to report from his Marketing Committee due to Covid and said, “Covid, frankly, is getting in the way of pursuing any interaction with the public so far.” Merry said he is working on an employee incentive plan to boost morale, as recommended by Burden, where the commission may buy Silver Dollar City tickets for front-line employees. Merry stated he will have more information at the next meeting.
Odds & Ends
- Burden announced that starting Feb. 1, the hospital will accept AETNA Medicare advantage insurance.
- Reed said there is one full-time employee filling housekeeping duties, and ESH now has a full-time pharmacist.
- Cost reporting was discussed by Burden, who warned commissioners that it may be 18 months before the hospital receives any payments from 2019 operations.
- Interim CEO Shaw said the Medical Detoxification program has been initiated and that hospitalist Dr. Daidone is director of the program.
- Commissioners voted unanimously to hire Windle & Associates to perform the annual financial audit.
- Commissioners went into executive session to discuss CEO applicants who had previously interviewed for the position. Burden said afterwards that the commission decided to move forward to the personal interview stage for a few candidates in the coming weeks.
- Burden also announced that commissioners will begin allowing public comment on a regular basis at the beginning of the meetings.
The next regular meeting is scheduled for Monday, Feb. 15 at 6 p.m.