The Eureka Springs Hospital Commission met Tuesday night, May 26, for two back-to-back special meetings. Topics regarded buying additional laboratory equipment and review future relationship options with Alliance Management Group.
First, hospital lab director Tina Adams requested the commission approve a purchase or lease of a new analyzer for rapid in-house testing of coronaviruses. Adams said the recommended Cepheid GeneXpert analyzer system provides not only accurate diagnostic tests for coronaviruses but can also be used to test for sexually transmitted diseases, streptococcus, influenza, and respiratory syncytial virus among a long list of other detection capabilities.
Currently the hospital is utilizing an Abbott analyzer that is known to produce false negative results in certain conditions, proving less reliable for accurate diagnosis and treatment. “If you are just relying on the Abbott you have a fifty percent shot that that negative test is true,” commissioner Tyson Burden said.
The Cepheid analyzer was said to be the “gold standard” of medicine for producing accurate and timely results. Purchase price is about $65,000 or around $1,000 per month to lease.
Commissioner Christopher Baranyk did not doubt the machine’s capability but said, “It’s just that this is a very expensive machine. We have a lot of expenses right now and we need to be careful.” Baranyk’s warning against overspending comes just one month after the commission liquidated $1.5 million in CDs with Cornerstone Bank to supplement the hospital’s underfunded operational account.
Burden said he knows it’s expensive but is strongly in favor of the purchase to better prepare the hospital for future pandemic outbreaks. “I’m afraid that we will get in a situation in the fall where we’ll have no idea what we are treating,” he said, adding that he wants to take advantage of the summer to prepare for another potential outbreak by acquiring effective medical equipment.
Lease versus cash purchase was passed, however Baranyk, as best as could be observed through the broadcast meeting, remained opposed. The commission hopes to use recently acquired government grant funds to cover the cost of the equipment. “If the grant money pays for anything, it should pay for this,” Burden said.
Contract to undergo fine tuning
The second topic regarded the contract with Alliance Management Group, LLC, and the Hospital Commission. The original short-term contract was for the purpose of guiding the hospital out of a lease agreement with previous hospital operators, Allegiance, and transitioning the hospital back into a city-owned-and-operated organization.
Cooperative efforts of the commission and Alliance over the last six months have proved successful despite the unanticipated health pandemic, which took place simultaneously. Allegiance managed to procure the transference of State of Arkansas 855 Agreements to ESH’s ownership while maintaining no gaps in medical service.
Alliance also transitioned the employees and their tenure to the city’s employment and secured the E.R. physicians’ positions. Alliance helped to procure more than a million dollars in up-to-date medical equipment and applied/received government grants in excess of $3 million.
Darrell Parke of Alliance said that regaining confidence in the hospital is paramount. “Our whole intent is to become aggressive to help to create a sense of security for the community.”
Alliance has demonstrated dedication to the short-term contract by completing the hospital transition within the time allotted and asking for no extensions. The initial contract has expired, and renewal discussions began to potentially extend Alliance’s hospital management services to an agreement with more permanence.
Parke offered the commission a newly proposed five-year contract. Parke, who lives in Oklahoma, is looking to call Eureka Springs his home and has extensive long-term plans to further revitalize the hospital.
“If we can execute our vision,” he said, “this hospital will be a shining star.”
“I know they [Alliance] are going to turn it around,” commissioner Barbara Dicks said. “I totally have my trust in them.”
Commissioners suggested changes and asked Parke to redraft and resubmit the proposed contract for consideration at a later date. Contractual items proving problematic were operational control, compensation, travel and lodging expense reimbursement, term length, incentives, and profitability.
For example, the commission was hesitant to enter into a five-year contract and stated two or three years would be more acceptable. Also, Burden discussed operations of the hospital in which the potential contract states it will be ran “profitably.” He said the goal of the hospital is not to grow its wealth before maintaining security of its assets.
Another example was reimbursement of expenses in addition to a salary, leading Baranyk to say, “One of my hang-ups here is hiring someone from out of state.” Baranyk wanted to make sure that the hospital is not paying for travel costs to an out-of-state resident to run a local hospital. Chair John House agreed.
The biggest point of contention was the proposed annual compensation of $360,000 with a percentage of incentives based on net revenue performance. Baranyk quickly spoke up
“So the hospital made twelve million last year,” Baranyk said. He crunched the numbers and said the proposed incentives from the stated scale could reach almost a million dollars on top of the base salary, “It makes me worry a little bit. Wow, that’s a lot of money.”
Baranyk said he has a problem with management salaries eclipsing a physician’s salary which he said for a rural community is in the range of $165,000.
“I’m like Chris, I have fundamental issues with this,” Burden said.
House agreed, saying, “I think compensation needs to fit the job.”
House said he has a problem with proposed compensation and incentives, and believes the citizens would have a problem, too.
Dicks said she has no problem with the proposed incentive plan. “If anybody can do it, they can do it, and I think the bonus is okay,” she said.