November Hospital Board Meeting

Opening

Chair, Charlie Mandile, called the meeting to order at 6:35 p.m. The Agenda was approved with an addition.

The Consent Agenda included Minutes for the October Board Meeting, Minutes for a Governance and Planning Committee Meeting, Minutes for a Special Budget and Finance Committee Meeting, Change in Control Addendum to CEO Contract, and the 2019 Board and Committee Meeting Schedule.

Reports

1. Hospital Chief of Staff—Randy Reister. Dr. Reister reviewed the vetting process for physicians applying for staff membership/privileges at the hospital and assured the Board that the process was rigorous.The applications for Medical Staff Membership/Privileges were approved.
2. Chief Medical Officer—Jeff Meland.The medical staff believes that it is important to continue to have a physician on the Board.  A surgeon has been recruited to fill the recent vacancy.  The physicians are unanimous in their support of the hospital space expansion plans.
3. NH&C Report—Ben Flannery.Flu season has arrived and the clinics are busy.  The wait time for appointments with some physicians now exceeds one week.
4. City Report—Brad Ness. Mandile and Underdahl met with the City Council to discuss the planned expansion of the hospital. The Council discussed family and parental leave policies.
5. Boards and Commissions—Rhonda Pownell. The process for selecting appointments to Northfield boards and commissions has been revised. Applications can now be made online; the information on applicants is available to Council members prior to voting approval; and applicants are notified by email regarding the outcome of their application.  Pownell has met with all Board chairs to review the new application process.

Presentations/Discussions/Action Items

1. Home Care and Hospice Quality—Tammy Hayes. NH&C met or exceeded the performance standards for home care and hospice care set by Medicare and Medicaid or the national averages for these standards in most areas for 2018. The performance measures include such things as “patient satisfaction”, “quality of care”, “submission of data”, etc.
2. Enterprise Risk Management—Laura Peterson. Enterprise Risk Management (ERM) is a process to identify and manage events that may hinder the achievement of the institution’s objectives.NH&C hired a consultant to help implement the ERM process, but the consultant is no longer actively working with NH&C.  The ERM software provided by the consultant remains in use.  Peterson has assumed internal responsibility for the process.
3. Amended Bond Documents—Scott Edin.NH&C is proposing an amendment to the revenue bonds issued by the City of Northfield on behalf of NH&C in 2015 and 2016.  The amendment addresses the “PERA Problem” discussed at past Board meetings, i.e. the periodic assessments of liability against NH&C made by the state pension plan.  The assessments are a non-cash expense; no payments are made but the future liability of NH&C is recorded as an expense.  The proposed amendment would eliminate the GASB pension expense from the “Expense” category when calculating the Coverage Ratio specified in the bond covenants.  The amendment was moved and passed by the Board and will now go to the City Council and the banks holding the bonds for approval.

Strategic Discussion

1. Data and Services Protection Project—Vern Lougheed. The current data storage system on the main campus needs to be replaced as the service contract can’t be renewed. NH&C uses two data centers, including one off site. The campus system handles critical campus infrastructure and medical systems.  A disaster with the current campus system would take 2-3 days to restore.  The staff explored 3 different systems to replace the campus system, and is recommending a Dell/EMC platform based on cost, reduced recovery time, and past experience with the system.  The capital cost for the system is $650,895 and the annual operating cost will be $60,297. This project will come to the Board in Dec. for a vote.
2. Clinic and OB Expansion—Jerry Ehn. Both the medical clinic and the OB unit are out of space. Current operations are crowded and there is no room for expansion of services.  The proposal is to do 2 projects adding contiguous space for both the clinic and OB that will allow expansion of services and support team models of medical practice.  The budget would be $9 – 10 million for construction and $3 -4 for fixtures and equipment.  The Administration has briefed the City Council on the project, and the Council will vote on the proposal at the Dec. 11 meeting.  A project RFP will be prepared following Council approval, and a special Board meeting may be required in January to keep the project on schedule.

Executive and Committee Reports

1. CEO Report—Steve Underdahl. Work and progress continues on a wide variety of projects:  a) A new option for electronic health records (EHR) is being evaluated and the preliminary results look favorable.  A recommendation on a new her system might come to the Dec. Board meeting.  Underdahl stated that purchasing an EHR system is comparable in time, cost and medical practice to building a new facility.   b) The new EHR system may facilitate “patient facing technology.”   c) The orthopedic services project is moving forward.  The Faribault MDs will leave Summit Medical in January.  The nature of the new organization is still under discussion.  d) The Senior Housing Project has been slowed by the cold, wet fall.  e) The self-funded health insurance plan at NH&C is having another expensive year.  f) It has become increasingly difficult to fill entry-level positions at NH&C.  g) The work of the City – NH&C governance committee is progressing.  h) Expansion of MNCare by the State will increase the financial challenges facing hospitals as MNCare reimbursement is about half of what private insurers pay. i) MN hospitals would like to see the 2% provider tax extended beyond 2019.
2. Financial Report—Scott Edin. Octdober was a busy month, with most service levels over budget, but expenses and deductions were also over budget. Net Operating Income was $275,000, but that was $58,000 under budget.  Negotiations with insurers regarding reimbursement in 2019 are tough. Insurers want to apply the fees charged by stand-alone-clinics, e.g. $600 for an MRI, to their reimbursement level for hospital services, in spite of the fact that hospitals are open 365 days a year, care for everyone who presents with a need, and provide charity care.
3. Community Relations Committee—C. C. Linstroth. CC stated that the Committee had received $104,000 in community requests.The grant budget will be determined in Dec. and grants will be made in the spring.

Roundtable

Meeting adjourned at 9:00 p.m.

Next meeting:  Dec.  20^th, 2018