- Steve O’Neill called the meeting to order at 6:30 p.m. The Agenda and Consent Agenda were approved. The Consent Agenda included Minutes for the December Board Meeting, Minutes for a Governance and Planning Committee Meeting, and Minutes for a Quality Committee Meeting.
- Hospital Chief of Staff—Dr. Tom Holt. No report. Dr. Melland presented the applications for Medical Staff Membership/Privileges. Applications approved.
- Approval to Upgrade the Omnicell Automated Medication Cabinets—Gary Anderson. The current equipment is outdated and support for the operating software is being discontinued in Oct. 2020. Currently there are 10 machines on campus. The proposal is to replace the 4 original/older machines and update the software in the other 6. The upgrades will improve patient safety; increase medication security, and facilitate auditing. An ID is required to log in and access medications in each machine. Controlled substances will be dispensed in single individual prescriptions with the new machines. Each machine will be audited and reconciled at the end of each nursing shift. The proposed contract includes guaranteed updates for the next 10 years. Cost of the proposal is $354,242.03, and the capital budget included $550,000 for the project. The Board approved the proposal.
- Board Chair Report—Steve O’Neil.The Mayor and Council reappointed those Board members, whose terms expired. Given no change in membership, the Governance and Planning Committee recommended that the 2019 Board officers be reappointed for 2020. Motion passed. The Board Chair appointed the Board committees for 2020, and distributed the Committee Meeting schedule for year.
The Board utilizes a 3-year planning cycle, and 2020 is year 1 of a new cycle. The planning period begins with a series of 3 presentations (Jan. – Mar.) that culminates in a retreat. CEO Underdahl started the process by reviewing the history of NH&C and the current state of the institution and health care in the US. Underdahl praised the foresight of past Board members and administrations to construct the current facility on North Avenue where it had room to grow. NH&C and the Board have spent the last 5-6 years modernizing the administrative functions: finance, quality, supply chain, clinic practices, strategic relationships, etc. The future may be a period of constant change, downward pressure on payments by insurers, movement away from inpatient care, movement of insured persons into high-deductible health insurance plans, expansion of insurers and others into direct provision of medical services that will compete with hospitals and clinics, etc. Well reimbursed services that more than cover cost will be pirated by for-profit providers, leaving the hospitals with the loss-leader services and financial deficits. Rural hospitals may be a threatened species as rural residents are told to expect fewer local services. Underdahl left the Board with 3 questions.
- What principles should guide our planning process?
- How do we make NH&C sustainable for the next decade?
- What is the future scope and shape of NH&C?
Executive and Committee Reports
- CEO Report—Steve Underdahl. a)Strategic. The staff is working with staff at Laura Baker School to design care processes that will be less traumatic for their residents. The hospital is exploring ways to increase the use of locally produced products. Two providers of patient-facing-technology demonstrated their products on site and a recommendation will be coming to the Board soon. The state retirement fund (PERA) has notified NH&C that the increase in pension liability for the year will result in a 2019 charge/expense of $2 million. The charge is an accounting adjustment and does not require a cash payment, but it results in an official operating loss for NH&C in 2019. The city-owned hospitals in MN are continuing to lobby the state legislature for relief. From PERA.
- b) Operations. The unofficial financial report for 2019 shows a very small operating surplus when the PERA charge is omitted. Including the PERA expense will result in a negative Income from Operations for 2019. Patient volumes are becoming hyper seasonal. Currently the hospital is very busy caring for flu patients. NH&C is acting on the recommendations resulting from an energy audit. LED lights are being installed; worn electric motors are being replaced; the Birth Center expansion underway was designed to be energy efficient; the facility has maxed out its solar garden; an electric vehicle charging station will be installed on campus.
- Financial Report—Scott Edin. Inpatient days were 19% under budget; births were 23% under budget; surgery cases were 9% under budget. Net Operating Revenues were $224 thousand under budget, while Operating expenses were $278 thousand over budget. In spite of the deviations from budget Net Operating Income was positive for the month, resulting in a slightly positive unofficial Income From Operations for the year. NH&C had over $5 million of non-operating income; essentially gains on their investment portfolio. This results in a Net Income for 2019 of $5.4 million, excluding the PERA charge. (Note: the PERA expense item and variable investment returns each year will likely result in Net Income being difficult to forecast.) The Days Cash on Hand was 251 for December.
- Budget And Finance Committee—Fred Rogers.No Report.
- Governance and Planning Committee—Steve O’Neill. The Compensation group will again work with Walt Flynn on the CEO compensation package. Otherwise covered above in the Board Chair report.
- Quality Dashboard Report—Charlie Mandile. The Patient Experience Surveys show a slight decline in the latter half of 2019 and identify some areas that need improvement. Various hospital committees are working to improve patient experience. The hospital anticipates a small penalty from Medicare for excess readmissions related to: heart failure and total hip/knee replacement, and a reward from the Value-Based Purchasing Program.
Meeting adjourned at 8:35 p.m. and the Board went into a closed session for Strategic Planning.
Next meeting: Feb. 27, 2020.