- Chair, Charlie Mandile, called the meeting to order at 6:30 p.m. The Agenda was approved.
- The Consent Agenda was approved. The Consent Agenda included: Minutes for a Joint City Council/Hospital Board meeting; Minutes for the November Board Meeting; Minutes for a Community Relations Committee meeting; Minutes for a Special Budget and Finance Committee meeting; Revision to the Medical Staff Manual.
- Hospital Chief of Staff. The applications for Medical Staff Membership/Privileges were approved.
- Chief Medical Officer—Jeff Meland. No report.
- Accountable Care Organization (ACO) Launch—Stacie Rice. ACO’s “are groups of doctors, hospitals, and other health care providers, who come together to coordinate care for their Medicare fee-for-service patients. “ ACO’s are required to serve a minimum of 5000 Medicare beneficiaries. NH&C currently serves only 1400 so it has partnered with other communities through Caravan Health for a 3-year trial. The purposes of the trial are to provide a better patient experience and to prepare for the industry shift to reimbursement models based on wellness and health. Four of the ACO partners are located in Idaho, and 6 are in MN. The ACO and Medicare will share any cost savings achieved in 2018. New practices developed in the ACO will apply to all patients served by NH&C. NH&C will add a “Population Health RN” and Dr. Felland from the Lakeville Clinic will serve as the “ACO Provider Champion”. An ACO Launch Meeting is scheduled for Tuesday, Jan. 23, 2018 in the hospital Conference Center.
- Home Care Quality—Tammy Hayes. Quality and patient satisfaction measures have improved in 2017, but some care quality measures remain below the National Reference Standards. Progress will continue.
- Approval of Nurse Call/Code Blue System—Tammy Hayes. The need and the system details were presented at the Nov. Board meeting. The Board approved an expenditure of $515,000 to purchase a Rauland 5 nurse call system for the Northfield facility.
- Foundation Funding—Charlie Mandile. Charlie requested a small, one-time donation of $5000 to the Northfield Hospital Foundation to create an account with Northfield Shares. Northfield Shares will provide administrative services to the foundation for a fee. The donation was approved.
- Annual Donations Pool—Charlie Kyte. The Budget and Finance Committee recommended a community donation pool of $70,000 to be dispensed in 2018 to communities served by NH&C. The B&F Committee also recommended $115,900 pass through to the Northfield Park and Recreation Program for 2018. (This is year 2 of a 3-year agreement.) Motion passed. There was no increase in the 2018 funding due to a very tight operating budget for 2018. It was noted that Health Finders Collaborative will receive subsidies for lab fees of approximately $80,000, and lease costs of $16,000 from NH&C in 2018.
- Recommendation on Investment Advisor—Charlie Kyte/Scott Edin. The Budget and Finance Committee recommended the investment firm of Cleary Gull from Milwaukee to supervise equity investments. The current fixed income advisor will be retained. Cleary Gull will survey all Board members to determine the best risk-tolerance level for the equity portfolio. Motion passed. The Budget and Finance Committee will meet with Cleary Gull in January.
- Operating Budget for 2018—Scott Edin. The Operating Budget for 2018 basically assumes 2018 service and revenue levels will be constant (changes less than +/- 1%) with the exception of ambulance runs (+6%) and clinic visits (+12%). Expense items projected to increase in 2018 are salary expenses (+4.4%), Drugs (+3 – 4%), and medical supplies (+2.1%). Budgeted revenue for 2018 is $108.3 million; budgeted expense is $107.5. Projected Net operating income for 2018 is positive, but less than the figure for recent years, not including whatever accounting costs may be dictated by PERA adjustments. 2018 is projected to be a tight fiscal year. The Board approved the budget.
- Capital Budget for 2018—Scott Edin. Capital expenditures are projected at $10.9 million for 2018, including $3.6 million for remodeling of the Northfield Clinic and $2.4 million for an ambulatory surgery center. It is anticipated that $4.5 million of the amount would come from reserves.
Executive and Committee Reports
- CEO Report—Steve Underdahl. a) The City Council is considering a change to the lease agreement with St. Olaf College to permit construction of the senior care facility. b) NH&C and Olmstead Medical Center are still negotiating over implementation of an electronic health records system. It appears that the cost to NH&C may be significantly higher than expected. c) The telemedicine project with Mayo and Stanford Univ. is proceeding. If successful, it will allow NH&C to keep sicker patients. d) a market survey is planned for 2018, but changes in communication technology (cell phones) has made land-line surveys less reliable. Alternatives are being considered. e) The Advanced Care Planning project is proceeding. f) The billing and coding processes are back on track. g) The 4th quarter patient and revenue surge experienced in recent years has not materialized in 2017. This may require some rethinking of expenses. h) The repeal of the insurance mandate in the ACA is projected to lead to a major decline in enrollment. This is not fair to insurers as the more healthy people are most likely to opt out. A series of meetings with state and national politicians is anticipated.
A request was made that any material sent to the City Council also be sent to Board members.
- November Financial Report—Scott Edin. Services were over budget, including Home Health Visits (+21.9%), CCIC (+19.4%), Births (15.4%), etc. Net Operating Revenue and Operating Expenses were both over budget. The result was a Net Operating Income for Nov. of $301 thousand. Net Income was reduced as a result of the increase in government (Medicare and Medicaid) payers that receive a larger discount than the private payers. As a result the cumulative Net Income is below that of recent years at this date. The days-cash-on-hand is 224 days.
- Quality Committee Report—Charlie Mandile. Patient ratings are improving. Staff is being added as new problems are encountered (e.g. increasing workplace violence).
- Budget and Finance Committee—Charlie Kyte. No report. Steve Underdahl thanked the committee for all the work they have done in recent work on the 2018 budget, the investment advisor, and other tasks.
Charlie Mandile reported many positive comments on the recent retreat.
Meeting adjourned at 8:54 p.m.
Next meeting: January 25, 2018