On Saturday afternoon, Nov. 9, the Eureka Springs Hospital Commission met for a workshop and special meeting to discuss and vote on candidates who submitted applications for solicited contractual consultant services. The effort is for transition of management of the hospital from Allegiance to the Hospital Commission. All commissioners were present with the exception of Dr. Christopher Baranyk.
Candidates who submitted applications for this six-month service were primarily from individuals with interests and experience in hospital management such as Stace Holland of Pineville, Mo., for a fee of $70,000, Lynn Hostetter of Chicago for $85,000 – $100,000, and local resident Beverly Faust for a fee of $50,000.
One organization responded to the bid request, Alliance Management Group, LLC of Tulsa, Okla., for a fee of $240,000 plus expenses.
AMG provided an extensive “Turnaround Plan” through the services of four active specialists within its executive team: Darrell Parke who has served in Health Administration since 1991; John Parigi II, a CPA specializing in healthcare for more than 30 years; Ryan Capshew, a Critical Access Hospital consultant focusing on rural hospital management; and Mark Stearns, founder of Tulsa Outpatient Surgery Center as well as Tulsa Endoscopy Center. Stearns focuses on managing and developing critical access hospitals.
Three of the four aforementioned AMG partners spoke at the workshop and were afforded time to present recommendations to commissioners.
AMG’s mission is to achieve a new focus of patient-centered care without interruption to hospital services during transition. The partners said they plan to transition operational management while expanding and integrating healthcare services for residents of Eureka Springs and surrounding communities.
Parke pointed out that the hospital is currently only providing Emergency Services but has much more potential to provide broader services to the community. Chair Dr. John House agreed and said increasing ancillary services is a definite goal.
Parke said this transition will not be without its challenges, explaining the areas that need the most effort in turnaround are low occupancy rates, high operating expenses, low Medicare utilization, high accounts receivable and slow collection rates, and outdated facilities and equipment.
AMG partners said there is a financially viable path focusing on four core areas: 1) Increase core acute care admissions by recruiting physicians and increasing nurse acuity. 2) Re-engage the Swing Bed Admissions program from Medicare to contribute to improved quality of care. 3) Grow surgical services which is potentially the largest stabilizing financial factor. 4) Increase local intellectual capital and capabilities by training and authorizing hospital employees to execute services directly without the use of off-site centralized business offices.
AMG said it will support the current staff through education and training opportunities.
Capshew emphasized this last point, saying ESH has been stripped of intellectual capital by the management company in the name of economies of scale and efficiency. Instead, AMG is dedicated to bringing the intellectual capital back to the local level. Proving that point, both commissioners Peggy Duncan and Barbara Dicks said that the current centralized billing is so far behind that medical procedures performed more than six months ago are just now being billed, and there have been community complaints of patients being billed twice.
AMG stated that these – confusion between patients and the hospital, slowing down of collections, and falling behind on Accounts Payables to vendors – are failures that can happen with a centralized business office. The solution, according to AMG, is to bring the operational control back to the local hospital.
In order to bring control back to the hospital, Parke emphasized the importance of securing the current employees by creating a seamless transition of salaries and benefits.
AMG stated in its Letter of Intent it would begin assessing the last five years of cost reports and make recommendations for resubmissions and adjustments, then begin assessing revenue cycle issues and work toward stabilizing operations. They would provide an immediate interim CEO who would be in the hospital no less than four days a week.
House stated at the beginning of the meeting, “This is strictly a six-month thing.” However, after the presentation House asked Parke if AMG has any interest in committing themselves to permanent management services after the six-month transitional duties are completed.
Parke answered they are interested in seeing the hospital though this transition and beyond. He stated he has visited Eureka Springs for years, frequently scuba dives in Beaver Lake, and has entertained the idea of moving his family here permanently.
Commissioners agreed unanimously to contract the services of AMG. They will process the agreement through their law firm before signing with the addition of a request for regular communication from AMG throughout this transitional process as well as a providing a cap on expenses.
To reassure the community of the commission’s devotion to the hospital, House said, “We just made a big step. I think the community is going to start to see changes right away. I really do.” Dicks agreed and added, “I really think these guys [AMG] can do it and I think we, as a commission, are holding their feet to the fire.”
Commissioner Michael Merry summed it up saying, “The commission is taking control of the future of the hospital at this point forward.”