Medical Staff Reports
1. Chief of Staff—Dr. O’Halloran: Dr. Ehresmann reported that the Medical Staff had met to discuss quality of care; and the Medical Executive Committee approved several policies brought by the surgical subcommittee. As an aside, Dr. Ehresmann reported that the YMCA had raised an additional $1.1 million since they had approached NH&C for a donation and the current building project will now incorporate Phase II. Dr. Ehresmann thanked NH&C for their support.
2. Clinic Medical Director Report—Dr. Flannery: Dr. Flannery reported that February and March have been busy at the clinics and he thanked his colleagues and the ER physicians for helping to cover for one of their physicians who was out during much of the period. Discussions are continuing with Mayo to have specialists from Mayo available at the clinics periodically.
3. Allina Clinic Report—Dr. Keith Olson: Dr. Olson reported that Allina is preparing for the rollout of ICD 10, a much revised medical coding system that must be implemented by all providers in Oct. 2014. Medical personnel are being retrained across the nation, but most providers are expecting a bumpy start, including delayed payments. Allina is going live with the ICD10 system in May, hoping to resolve many of the problems prior to Oct. Steve Underdahl said that NH&C will be monitoring Allina’s progress, hoping to learn from Allina’s experience.
4. CMO Report—Dr. Jeff Meland: Dr. Meland commented that NH&C faced greater than average challenges with the ICD 10 implementation, since NH&C serves as a regional trauma center. Persons with major trauma are brought to Northfield Hospital and these cases are medically difficult plus they require extensive documentation for reimbursement. There were 103 trauma cases brought to the hospital in 2013.
City Business Report
Council Person David Delong reported that the Mayor addressed the issue of city infrastructure in his recent State of the City address. The Mayor made the argument that the city needs good infrastructure in order to attract new businesses to town.
A. Rob Schile and Julie Ochs from CliftonLarsonAllen, LLP presented the 2013 Audit Report. The auditors reported that the audit process went very smoothly and that no problems were found. A reinterpretation of an accounting rule (GASBS 65) was implemented which increased reported revenue for 2013. The auditors presented comparisons of NH&C finances with several other CLA clients, and the comparisons were favorable.
CliftonLarsonAllen also reviewed industry trends that they believed were going to impact NH&C in the future. The most important trend is Value Based Payment: “a reform initiative whereby health care providers will receive payment for service based on their performance or the potential outcomes of the service.” Payment will be tied to performance, and “value” means higher quality (better outcomes) at lower cost (to payers). The goal of value based payment is to reduce patient volume by aggressively managing patient health. Payment “withholds” by Medicare will increase from 1% in 2013 to 2% by 2017. The funds Medicare withholds must then be “earned back” by providers. By 2016, 65% of the earned back funding will be based on measures of patient outcome and efficiency in care delivery. The Accountable Care Act has also scheduled $415 billion over 10 years in reductions to annual payment rate increases to fee-for-service reimbursement to hospitals, skilled nursing facilities, hospices, etc. Given that reimbursement will grow more slowly in the next decade, hospitals must find a way to slow the growth of hospital costs. Schile argued that the biggest risk to hospitals is to be “locked in to the historical paradigm” when the healthcare world is changing.
B. Gary Walen from BPS Capital Management reported on the outlook for the hospital’s bond portfolio. BPS expects short term interest rates (and therefore bond prices) to move in a very narrow band in 2014, even as the Federal Reserve tapers their bond purchases. NH&C has about $12 million in short duration bonds and $30 billion in intermediate duration (3 - 5 years) bonds. This mix will provide some protection against interest-rate risk while still providing some yield. The portfolio has no credit risk if held to maturity.
In response to a question, Walen suggested that selling bonds to finance expansion should be done as soon as feasible. Long term rates are expected to increase.
C. Ann Reuter, NH&C, presented the quarterly Quality Dashboard Report, summarizing a wide variety of measures related to quality. The measures are specified by 3 regulatory bodies: Center for Medicare Studies (CMS), American Recovery and Reinvestment Act, and Minnesota Health Care Reform. Payments are being tied to quality. A Board member asked if employee bonuses at NH&C could be tied to improvements in quality of care?
D. Steve Underdahl, CEO: Retreat Follow-Up. Underdahl presented 3 options being considered for a revised mission statement. Board sentiment appeared to favor a limited mission statement, e.g. provide the finest health care. Underdahl presented 4 options for a revised vision statement. A broad discussion of “vision” followed. The administration will consider the comments and present revised mission and vision statements for discussion at the April meeting.
Underdahl listed the “big rock” priorities that emerged from the planning retreat. These include:
- Becoming a high-value organization
- Establishing the tactical elements necessary to become a high-value organization such as building key strategic relationships with other providers.
- Preparing the administrative infrastructure to thrive in the new health care environment.
The strategies and steps to implement the priorities will be developed in the coming months.
- The Board approved the minutes of the February Board meeting.
- The Board approved the applications for Medical Staff membership.
- The Board approved the distribution of Health Awards (grants) to community organizations as recommended by the Community Relations Committee. A total of $68,200 was distributed to a wide variety of activities (e.g. United Way, Union of Youth, Health Finders, Special Olympics.) in Northfield and surrounding communities.
1. Committee Reports
- Community Relations—Steve O’Neil: Health Awards recommendation described above.
- Government and Planning—James Schlichting: no report.
- Budget and Finance—Charlie Austin: Audit and investment report described above.
- Quality Committee—Gina Franklin: The Committee met and is developing statements on the role and functions, and a strategic plan for the Committee.
2. Administrative Reports
- CFO Report—Tim Gronseth. While services were below budget in February, the financial results were better than in January. Discounts declined; the payer mix improved; and business at the infusion center picked up. Also, NH&C collected a substantial sum from the tax refunds going to people who had debts at the hospital. The state will apply tax refunds toward debts at publicly owned institutions. Both Operating Income and Total Income were above budget for the month and for the year-to-date.
- CMO Report—Jeff Meland. No further comments.
A revised building plan is will be presented for discussion at the April meeting.
Board members were impressed by a recent seminar at the Minnesota Hospital Association on “family centered care”. Board members recognized that some of the suggested practices have been implemented at NH&C, but more could be done.
Observer's Comment: I can understand the Boards interest in narrowing the Mission Statement of the hospital (e.g. provide the finest care), especially in light of the financial pressures facing health care providers, and the stress on measuring outcomes. But I think that a city-owned hospital should do more. Even for-profit hospitals are committed to providing quality care. A city-owned hospital is a community asset and it has a broad responsibility for the health of the community. This responsibility goes beyond just providing the finest care. It includes responsibility for seeing that all persons in the community have access to basic health care; that health and wellness information is disseminated to the community; that appropriate public health care programs are undertaken; and of course that the health care delivered in the community is efficacious, efficient, and necessary. Health is more than the sum of individual actions or medical care. Many scholars argue that public health is the most important determinant of population health. As a public institution, Northfield Hospital should embrace the role of promoting a healthy community.