- 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 the February Board Meeting, Minutes for a Budget & Finance Committee Meeting, and a revision of the Communicating Outcomes to Patient Policy.
- Hospital Chief of Staff—Reister/Meland. Meland thanked Charlie Mandile for his presentation at a recent Medical Executive Committee meeting. The physicians appreciated the opportunity to connect to the Board. A motion to approve the applications for Medical Staff Membership was passed.
- Chief Medical Officer—Jeff Meland. See above.
- NH&C—Ben Flannery. Clinic personnel are assisting with the process of staffing the Express Care clinic to facilitate cooperation between the two groups.
- City Report—Ness/Pownell. Mayor Pownell thanked the NH&C staff who attended the recent State of the City presentation.
Rob Schile—CliftonLarsonAllen. Schile reported that the audit went well. The opinion was unqualified; there were no audit adjustments or issues. Schile complemented the financial staff at NH&C for the quality of their work. NH&C appears to be in solid financial shape. Schile then discussed issues for the health care sector of the economy. Revenue growth is slowing for health care providers due to pricing pressures by insurers, high deductible private sector insurance polices, and an increasing number of patients on Medicare. Expenses are rising due primarily to labor costs, drug costs, and electronic health record costs. These costs will continue to rise and providers need to “rebase” their cost structures. Moody’s recently down graded the outlook for this sector of the economy to “negative.” The pace of change in the sector is accelerating and Alex Azar, Secretary for HHS, will push payment reform and cost controls. The industry is moving toward “value based” payments rather than fee-for-service. Successful strategies from the past may not work in this new environment. Change will be a challenge.
- Enterprise Risk Management—Bill Bojan, CliftonLarsonAllen. “Enterprise Risk Management (ERM) in healthcare promotes a comprehensive framework for making risk management decisions which maximize value protection and creation by managing risk and uncertainty and their connections to total value.” ERM requires the coordination of management, the Board, and risk monitors and a paradigm shift in the organization so all decision makers include risk factors in their decision processes. Bojan will continue to work with management at NH&C to instill ERM in thought processes.
- 3-D Breast Tomosynthesis Mammogaphy—Vicki Stevens. (Second presentation) 3-D mammography is becoming the standard of care for screening and diagnostic exams. Replacement of the current system is in the 2018 capital budget at a cost of $425,000. A new 3-D would cost $356,000 if the purchase is made by March 31. A motion to approve the purchase passed.
- Relocation of Cardiac Stress Tests—Jerry Ehn. (Second presentation) Cardiac stress tests are currently co-located in an ER exam room. The proposal is provide Cardiac Stress Tests with its own room, and to add another ER office. The project is in the 2018 capital budget at $250,000. Estimated cost is $223,000. A motion to approve the project passed.
- Approval of Investment Policy—Charlie Kyte. The Budget and Finance Committee recommended a few changes to the Investment Policy approved at the February Board meeting. Motion passed.
Executive and Committee Reports
- CEO Report—Steve Underdahl. a) The ACO is up and running. A recent study suggests that the minimum size to survive may be much larger (50,000 – 100,000 insured) than the current ACO. b) The Electronic Health Records project with Olmstead Medical Center is moving ahead now that OMC has a new IT Director. c) The Do The Next Right Thing banquet honored Ashja, Monica, Melissa, and Laura. d) Staff are being introduced to the Process Improvement Project. e) The arrangement with a Mayo dermatology specialist is being discontinued due to costs. The dermatologist’s services will be available in Cannon Falls and Rochester. f) A re-examination of the Worker’s Compensation contract indicates that NH&C has been under-reimbursed recently and NH&C is now rebilling the program. g) The Express Care Clinic will open weekdays beginning on April 9th. A “Grand Opening” will be scheduled later when the clinic is fully staffed. h) PERA conversations continue, but no legislation will be forthcoming in this session of the MN Legislature.
- Financial Report—Scott Edin. Net Operating Revenue was $241,000 over budget in February, thanks in part to the “Revenue Recapture Program” which allows NH&C to seize individual tax refunds to cover past due bills. The RRP has generated about $600,000 over the past year. Net Income was negative for the month (-$155,000) but the loss was less than budgeted.
- Budget and Finance Committee—Charlie Kyte. The committee discussed the suggestions in the Management Letter from the auditor. A Board member asked about “best practices” regarding how many years a health care provider should use the same auditing firm. Board members suggested that it was common to use the same auditing firm for at least 6 years. There is a learning curve for an auditor with each new new nonprofit client. NH&C re-bids its auditing services every 3 years.
- Governance and Planning Committee—Charlie Mandile. The committee is planning to use essentially the same CEO evaluation process this year as it used last year. This would include hiring Walt Flynn as a consultant for one more year. Charlie asked for “a sense of the Board” regarding the proposed procedure with the intent to insure that the process is “transparent.” After some discussion it was decided that no motion was necessary until the committee brought a formal policy proposal to the Board at a later meeting.
- Quality Committee—Charlie Mandile. The committee met to organize and to discuss the agenda for the coming year. The work of the committee is made more complex by the web of regulatory restrictions, and the move to value-based payments by Medicare. “Finance is what keeps the doors open this year; quality is what will keep the doors open in the future.”
Board Retreat Preparation—Steve Underdahl and Charlie Mandile. Board members are not required to read everything in the manuals prepared for the retreat.
Meeting adjourned at 9:18 p.m.
Next meeting: April 26, 2018