The March Board Meeting was a Webex Virtual meeting arranged by the hospitals IT staff. The Board Chair, Fred Rogers, called the meeting to order at 5:00 p.m.
Opening & Reports
(I joined the meeting late and missed this section of the meeting.)
1. Annual Audit Report—Rob Scile, CLA (Clifton, Larson, Allen). (I missed part of this too. Sorry.) The overall conclusion was that the hospital was in a strong financial position. Scile reviewed the seven industry trends that CLA foresees for 2022.
1) Labor: Labor is scarce and expensive with wage rates rising at 10 to 18% per year. One positive note: the traveling health care workers are becoming “road weary” and looking for more permanent employment.
2) Behavioral and mental health: recent surveys reveal an anxiety level 4 times as high as reported in 2019, and a self-reported depression level at 8 times the 2019 level.
3) Antitrust and Gov’t Oversight: the Biden administration is paying more attention to the health care sector. The Feds are worried about cyber security in health care so CLA ran tests of cyber security at NH&C, and found it strong. Testing and improvements will continue.
4) Private Equity Investors: there is increased investment in the health care sector, driving medical innovation.
5) Medicare: Medicare Advantage Plans are growing in popularity. Telemedicine will grow as will its reimbursement.
6) Inflation and the Economy: the most recent reading for the U.S. was 7.9% year-over-year. Interest rates will increase and investment gains are likely to decrease. Scile advised the hospital to look for ways to increase efficiency and new sources of growth. A strong reserve position, such as NH&C has, will be imperative.
7) Legislative Agenda: Medicare efforts to constrain health care costs will be re-imposed.
Executive and Committee Reports
1. CEO Report—Steve Underdahl. a) COVID: There have been no COVID patients in the hospital for a few weeks. BA2 COVID is coming. The US seems to be stuck at a vaccine level of 69%. The COVID related federal funding appears to be over. b) Strategic: Cyber security protection is made more difficult by the many “smart”appliances and machines attached to the system that can be used as portals into the system. NH&C is reapplying to be certified as a Level 4 Trauma Center. (Mayo, HCMC, and other facilities are Level 1 Trauma Centers.) NH&C is studying the addition of mental health programs and a White Paper addressing community needs is in progress. c) Operations: volumes are up for some services and down for others, which makes staffing difficult. Providers are still incurring COVID related costs. Staffing difficulties have occasionally limited some procedures. As usual, patient volumes are lower in the first few months of the year as high-deductible health insurance policies were reset on Jan. 1. MN has an unusually high ratio of high-deductible plans offered by employers. An internal study indicates that 43% of the patients visiting the Kenyon Clinic subsequently utilized other facilities in the NH&C system. d) NH&C was recently cited as a “Top 20”health care institution in MN by the MN Hospital Association
2. Financial Report—Eric Guth, Controller. Patient volume continues to be variable. Operating loss YTD including COVID grants was just under a million: $994k. Operating loss does not include any gains or losses on the investment portfolio held by NH&C. The portfolio loss for Feb. 2022 was 1.2 million.
3. Board Quality Committee Dashboard Summary—Sarah Carlsen. The Committee reported that patient and family survey data is being collected again. The full dashboard report will be included in next month’s packet. for 2021.
The meeting was paused while the non-Board members left the room, and then the Board went into a closed session.
Next meeting: April 28, 2022