Northfield Hospital Board observer Report for January 2023 submitted by David emery

The January Board Meeting was a Webex Virtual meeting arranged by the hospitals IT staff.

Opening & Reports  

1.Two new Board members were welcomed: Crystal Mulvihill with a background in human resources and Katie Lane with a background in supplying long term care facilities. 

2. The Consent Agenda was approved.  It contained the Minutes for the December Board Meeting and Minutes for a Quality Board Committee meeting.


1. Introduction of Dr. Ben Flannery, new Hospital Chief of Medical Staff.

2.  Medical Staff Report—Dr. Flannery.  Dr. Flannery presented the applications for medical privileges at NH&C.  Approved by the Board.

Executive and Committee Reports

1.  CEO Report—Steve Underdahl, CEO.  The Report started with a review of the priorities and problems in 2022:  a) COVID is receding; b) The electronic health records system (EHR) is up and running after greater than anticipated effort by staff.  Records, revenue, and billing were up to date as of Dec. 31, 2021.  The auditors for NH&C    have “pressure tested” the results from the new EHR system.  c) The Urgent Care Center was re-launched and is thriving.   d) The Midwifery center is staffed and busy–542 babies were delivered at Northfield Hospital in 2022.  (e) By necessity, work continues on the Future Workforce Plan. (f) The Hospital Foundation is functioning and receiving gifts.  Underdahl thanked the staff for the great job they did on addressing the priorities at a time when they were all very busy with daily patient care.    

NH&C has been facing major challenges from staffing and inflation, but hopefully these will ease.  Health care workers who gave up regular employment to become more highly paid “contract” workers are starting to return.  Open positions seem to be attracting more applications.  Purchase-price increases seem to be slowing.  Northfield Hospital was recognized as a “Top Hospital” (4 star) in 2022. 

Underdahl predicted that merger and acquisition activity will continue in 2023, and the larger systems will use their size to squeeze margins for the other providers.  The competition from non-traditional providers, such as Walmart, will grow.  Long-term care providers will continue to be squeezed financially: some out of business.  The local hospitals must continue to serve as safety nets, 24/7, regardless of their own financial challenges. 

2. Financial Report—Eric Guth, Controller.   Finally, the lags in coding and billing due to the new EHR system were eliminated as of 12/31/2021.  The financials for Nov. and Dec. 2021 were presented to the Board.  Operating Income was slightly negative for Nov. (148k) and slightly positive for Dec. (-148k) and slightly positive for Dec. (+$1183k).  The positive outcome for Dec. was much appreciated by the CEO.  The sentiment was expressed that the employees were working so hard it wouldn’t be fair to have a negative operating income.  Operating income YTD 12/31/2022, was -$ 7.8 million.  The investment gains or losses on the hospital’s investment portfolio were not presented, but unlike recent years, the returns are likely to have been negative for 2022 as the large stock market indices tend to be down.  Part of the financial problem for hospitals is that they cannot discharge many of their Medicare/Medicaid patients because there are no spots open at higher-care facilities or in extended term care facilities, often due to staffing constraints.  Medicare pays the hospital based on Diagnosis Related Groups (DRGs) where the payment is set by the diagnosis, and doesn’t increase when the length-of-stay increases.  (Medicare covers 56% of NH&C patients.)  The costs continue but the payments don’t.  The staffing problems in health care extend from top to bottom. 

(Now that the administration and Board are starting to get reliable financial data, I would expect them to start addressing the financial deficits. This could be a challenge. )

3.  Board Officers—Sarah Carlsen, is Board Chair elect.  Michael Hemesath is Vice-Chair.

The  Board took a break at 6:25 p.m. then went into a closed session.

Next Meeting: Feb. 24, 2023.

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