Board Chair, James Schlichting, called the meeting to order at 6:30 p.m. The Agenda was approved.
1. Hospital Chief of Staff—Dr. Holt. No report.
A motion to approve the applications for Medical Staff membership was passed.
2. Chief Medical Officer—Dr. Jeff Meland. No report.
3. Family Health Clinic Medical Director—Dr. Ben Flannery. No report.
4. Allina Clinic Medical Director Report—No report.
5. Mayo Report—Chris Rustad. The Grand Rounds program, conducted at NH&C is going well. The purpose of the program is to share some of the expertise at the Mayo Clinic with local physicians. The fixed-wing aircraft recently acquired by Mayo has already flown 25 flights.
6. City Business Update—Mayor Dana Graham. No report.
7. CFO Report—Scott Edin. September was busy, but only slightly above the projected budget levels. Home Health services were 50% over budget. Salary and benefits were 54% of Net Revenue vs. a target of 50%. Capital expenditures in the 3rd quarter totaled $905,789. Cash on hand equaled 234 days of expenses.
8. CEO Report—Steve Underdahl. Underdahl asked the Board to consider devoting 30 minutes of Board meeting time to environmental scanning in upcoming months in preparation for setting the next 3-year Strategic Plan in 2017. Topics would include regulations, competition, payments, etc. A consultant would likely assist the Board but the Board wanted to “Do our thinking for ourselves.” The data being generated by the Dashboard Project is being made available on line to staff. The Marketing Plan is well underway with a new logo, TV ads, billboards, movie ads, etc. There are still some issues to be resolved in the “naming” process. Some of these issues will be discussed during the closed session that follows this meeting. The Supply Chain initiative is going very well and efforts are underway to make the changes self-sustaining. NH&C is exploring a telepsychiatry program with Olmstead County Medical Center. The Final Rules for MACRA were published last week. MACRA is a quality scanning system for physicians serving Medicare patients. Data collection will begin in 2017 and the data will form the basis for a bonus/penalty reimbursement system for physicians starting in 2019. The lack of facilities to care for mental health patients continues to stress the hospital and staff. Since neither the state nor the county appear willing to address the issue, hospitals may need to adapt to serve this difficult cliental. It may be necessary to reorganize and remodel the emergency room, and provide additional staffing. NH&C is recruiting for OB/GNY, primary care, and midlevel obstetrics practitioners.
9. Governance and Planning Committee—James Schlichting. The committee approved a revision of the Bylaws. The revised Bylaws will be distributed at the Nov. Board meeting, and a vote will take place in Dec. Work is proceeding on a new formal compensation policy. The policy will be distributed to the Board at the December Board meeting and a vote will take place in Jan.
The consent agenda was passed. Items on the agenda included: Minutes for the September Board meeting; Minutes for the Sept. meeting of the Quality Assurance Committee; Minutes for the Sept. Budget and Finance Committee meeting; 2017 Board Meeting Schedule; and a revision of the Psychiatry Privilege Form.
Process Improvement Project—Vicki Stevens. The project seeks to establish a formal process for evaluating and improving processes, workflow, and activities at NH&C. The emphasis is on incorporating the process improvement mindset into every work unit and training leaders to facilitate improvement across the system. Training will begin in 2017 with implementation is the second quarter of 2017.
The open meeting adjourned at 7:45 p.m. and the Board went into a closed session to discuss marketing activities.
Next meeting: November 17, 2016.
Observers Comment: The Board has held a number of closed sessions in recent months as they considered strategic issues such as marketing and branding, and establishing an urgent care center and a surgery center, both off-campus. For-profit medical providers are increasingly providing competition to the hospital and clinics, and NH&C is seeking a strategy to respond to the competition. The hospital’s view is that the for-profits “skim” the market taking the simple cases that present during normal business hours and asking for a cash payment. This leaves the traditional hospital/clinic with the more complicated cases; cases that present outside of normal business hours, e.g. Christmas Day; and patients who may have difficulty paying for the services received.
The price at a for-profit site is usually a fraction of the “charge” at a hospital. One reason, cited by hospital people, is that given above—simple cases, limited hours, and cash payments. A second reason is that hospital “charges” only vaguely resemble what we normally think of as “prices”. The “price” that NH&C receives from government and insurance companies is about 45% of the “charge” or $0.45 for each dollar of charges that might appear on a patient’s bill. As more people choose high-deductible insurance plans and start shopping for medical services, it is likely that the difference between the “charge” and the real price may narrow as high-charge hospitals lose business to the lower-priced for-profit providers. NH&C must try to position itself in this environment. The rest of us must muddle along in the crazy, high cost, low efficacy US health care system.