- The Board approved the minutes of the January Board meeting.
- The Board approved the applications for medical staff privileges.
- The Board elected officers for 2013: Gina Franklin will continue as Board Chair; Charlie Kyte will be Vice-chair; and Mary Crow will be interim Secretary Treasurer. (I erroneously reported that the officers were elected last month. They were nominated last month.)
- The Board approved an incentive compensation program for all employees of 2.7% of total wages. All employees will receive a payment of 2% of 2012 wages, with the remainder of the pool to be distributed to salaried employees based on meeting individual performance objectives.
- The Board approved $70,000 for a donation pool to be distributed in Northfield and other communities in which NH&C has clinics. The Public Relations Committee will recommend projects to the Board during 2013.
Maren Swanson, of Lampe Law Group L.L.P., was present to review laws governing the use of hospital funds based upon the City Charter and state statutes. Maren’s conclusion was “Hospital funds must be used solely for purposes relating to the city’s medical facilities or for other purposes that relate to the delivery of health care services.” While the provision sounds restrictive, Maren pointed out that the phrase “delivery of health care services” is not defined in the City Charter or in state statutes. Therefore, the Board may exercise its judgment in defining the term.
Maren’s presentation was immediately followed by a discussion of a hospital donation of $107,625 to the City’s Community Education and Recreation (CE&R) program for 2013. The Hospital had voted earlier to fund the program for three additional years, provided that the Hospital achieve a 2.5% profit margin in each of the last two years of the commitment. The City Council did not accept the offer and sent it back to the hospital for reconsideration.
Special Discussion Item
The Finance Committee could not agree on a recommendation regarding a donation to CE&R, so the issue came to the Board without a recommendation. An extensive discussion followed. Some of the points made included:
- The legality of the donation is not clear, and Board members might be sued for misappropriating funds.
- Health care reimbursement is in flux due to the passage of the Affordable Care Act (Obama Care), deficit reduction politics in Washington, and looming Medicare and Medicaid reimbursement cuts. NH&C needs flexibility.
- It is difficult to move forward when it isn’t clear why the Council sent the offer back to the hospital. A new offer by the hospital may meet the same fate at the Council.
- While the dollar amount is not large relative to the annual budget of the hospital, a couple of the physicians present at the meeting pointed out that their equipment or facility requests for like amounts had not been funded. Where do priorities lie: in service to patients or funding City operations?
- The hospital needs to protect its financial position. Everyone benefits from a healthier community and Board members spoke strongly in favor of wellness programs such as CE&R. But the community also benefits from having a modern, well staffed, and financially viable hospital.
- Might the Council retaliate if the hospital did not pledge funding for CE&R, and reconsider selling the hospital? The issue of hospital ownership needs to be settled once and for all.
- The CE&R funding is a major distraction, as is friction with the City Council, and both these issues need to be settled ASAP. This is not something that a new CEO wants to inherit.
- The hospital should renew its offer to the City, but require the City to verify its use of the funds (to satisfy the Charter) and report back to the hospital on the outcomes from the grant (Do CE&R activities meet the mission of the hospital?)
Action: The Board voted to fund the Community Ed and Rec program for City fiscal years 2013, 2014, and 2015, with the grant for the latter two years contingent upon the hospital achieving a $2 million dollar surplus each year.
- Mary Crow distributed a timeline for CEO recruitment. The schedule shows interviews beginning in late March; candidate selection in late April; and CEO commitment by mid May.
- Plans were made for a strategic planning retreat in April.
- The auditors commended the staff at NH&C for their preparation and cooperation with the audit staff. No adjustments were made to the financial reports. A full audit report will be presented at the 3/21/2013 Board meeting. The audit report will also be given to the City Council.
- Scott Richardson reported that the hospital was working with District One Hospital and Rice County Public Health on a Community Health Needs Assessment. Rice County Public Health is leading the project and planning for completion sometime in 2014. The project plans to make extensive use of state data resources and conversations with community groups such as the Healthy Community Initiative in Northfield. The Joint City Council-Hospital Board Task Force had expressed an interest in the project earlier and it was hoped that the current City Council would participate.
- CFO Report: The Hospital and clinics had a strong January, with financial results much above budget. Chemo, surgery, observation, and ER were above budget.
- CEO Report: The new Oncology facilities in the hospital are already fully utilized and the staff is searching for new space. The hospital is drawing patients from a broader service area, due to the quality of the physicians and the quality of the care available at Northfield Hospital.
Observer’s Comment: While the Board expressed considerable concern about the hospital’s financial future during the discussion of the CE&R grant to the City, it was noted that one way to deal with the uncertain financial future is to keep increasing the quality of care and the breadth of care available at NH&C. Quality and convenience attract patients, but quality and breadth come with a cost. The projected hospital capital budget for the next 5 years is large. (I believe the figure cited was $20 million?) If the hospital is to grow and thrive as planned, it cannot be a cash cow for the City.
But on the other hand, it is not unreasonable for the City Council to push the hospital to take a more active role in improving community health. This was the tact being taken by the Council members on the Joint City Council-Hospital Board Task Force that was meeting prior to the election last fall. The evidence shows that increasing health care expenditures does not directly translate into better health. Per capita health care expenditures in the US are 1.5 to 2 times the average in other industrial countries, yet health indicators for the US are mediocre. We spend more on health care and get less than other nations. The US needs to find a way to get better health at a lower cost, and community health and wellness programs may be part of the solution.