League of Women Voters

 Action Items

1. The Board approved the minutes of the August regular Board meeting and the minutes of a special Board meeting on Sept. 17th.
2. The Board approved the applications for medical staff privileges. 

Review and Approval Items from the Budget and Finance Committee

1. The Board approved the appointment of Clifton Larson Allen as auditors for 2012.
2. The Board approved the purchase of a new radiographic fluoroscopic system for use with gastro-intestinal studies, joint injections, and other invasive procedures.  The new unit replaces a 12-year old system and will subject patients to lower radiation.  The installed cost will be $463,486. 
3. In response to a request from the City, the Board approved a recommendation that NCH fund the Community Ed and Rec program for 2013 and 2014.  Cost will be about $107,000 per year.  The Board also approved funding the program for 2015 & 2016, contingent upon the Hospital meeting a 2.5% operating income margin.   The extension for 2015 & 2016 exceeds what the City had requested, in an attempt to restore some good will, help the City financially, and promote wellness in the community. The contingency clause also invests the City in the financial success of the hospital.  The Board was reminded of a warning last spring, prior to the vote on funding for the Ed & Rec program in 2012, that “the City will be back for more.”  The current request from the City validates the earlier warning, and the Board member predicted that the “City will be back for more and more.”  The vote on the funding was not unanimous.    

Informational Items

1. Board Chair, Gina Franklin is planning to meet with City officials to brief them on the leadership transition and on the Hospital’s response to the Interim Task Force Report.
2. An employment agreement has been reached with Mary Crow to become Interim CEO and President of NCH.  Mary retired from the Hospital earlier this year, after many years as Chief Operating Officer, COO.  Mary will return for 3 to 6 months until a new CEO is recruited.  Mary’s appointment was the subject of the special Board meeting on 9/17/2012.
3. The Governance and Planning Committee is starting the recruiting process for a new CEO.  The Committee is hoping that they can shorten the process somewhat, given the short time since the last search.   
4. CFO Report:  Revenues for August were below budget; net income was positive, but below budget.  Financial performance for 2012 is considerably below that of 2011; closely tracking 2010.  The surplus at the end of August 2012 is about 25% of the August 2011 surplus.  Dept. heads are being asked to find cost savings, and capital expenditures are being limited to items directly affecting patient care.  When Jane Narverud was asked to give an end-of-year projection, she explained that it is very difficult.  Medicare and Medicaid review admissions and procedures, and if one is not “medically necessary” the hospital must refund the payment received from Medicare or Medicaid.  Recognizing that some of their revenue will be reclaimed by Medicare, the Hospital sets us “reserve funds” to cover the losses.  The Hospital won’t fully know the financial results for 2012 until after Medicare completes it audits, sometime in 2013, and the “reserve funds” are adjusted.
5. CMO Report:  The Chief Medical Officer reported that work is continuing of a physician compensation plan for 2013.  Also, the issue of “call coverage” is being studied, with the hope that a cooperative call system can be worked out with Allina.  The CMO is working with the local providers to strengthen the governance structure.
6. CEO Report: The CEO commended the management staff and other employees on the great job they have been doing during a very trying period.  Mary said that everyone had pitched in, taken on extra duties, and that morale was good.   Mary also commended the staff on a quality  award for “Most Improved Small Hospital.”