- Executive Summary
- Call to Order
- Regular and Consent Agenda
- Reports
- Hospital Chief of Staff Report
- Board approved medical files.
- Presentations/Discussion/Action Items
- Executive and Committee Reports
- CEO Report
- Board is trying to understand how their assumptions at the beginning of the year are playing out. Generally, expense controls and general volume assumptions have been holding. The payer mix has been more variable, and pressure is on the next few months as to whether the plan needs to be more aggressive.
- Hospital is physically full and has been on divert status 3 or 4 times in the last 10 days.
- Surgery schedules are also fairly full. This time of year is when they generally have predicted to be full. Have been budgeting conservatively but will see at the end of the year what has been working and what needs to be changed. Have also been looking into fiscal years that do not start and stop in January and December.
- There has been a shortage of IV solution due to Hurricane Helene, which shut down one of the primary manufacturing locations (about 60% of national supply). Hospitals have given feedback to the federal government about how the concentration of supply is problematic. FDA has been fast-tracking some overseas solutions to help with shortage. Additionally, a plant should be opening next week. One of the problems is that the supply chain is often bottlenecked by the same supplier(s) for all hospitals. Most of the time, companies that Northfield Hospital works with are able to tell them exactly when things will be available (on this day at this time), however, currently unable to do so. Usually, the hospital has a prudent reserve for uncommon emergencies, however, certain things have shelf-lives that prevent reserves. Furthermore, a certain amount of hoarding is done by larger organizations. At the state level and MN Hospital Association,
there is some cooperation so that places have the supplies necessary. Because of the infrastructure necessary to produce, not easily done on the small-scale. During COVID there was more cooperation among hospitals/suppliers. While some competitiveness has returned, those mechanisms are still there. Conservation strategies are being worked on to determine what is being used, how it is used, how does it line up with supply, and are there things that can be done differently or used less of. There are teams looking at the data for this and are meeting daily and weekly. Like during COVID, the question is about elective surgeries. It is a bad time of year for a shortage such as this, as elective surgeries are what pays for everything else, however some postponements are inevitable in order to preserve resources for emergencies.
- DEI Council has continued its work. This month they are revisiting their charter document and thinking about what work they are trying to do. Consensus is that there is no need to change what they are doing due to political preference changes.
- Patient, Family, and Advocate Committee was established to create a team of
individuals that can see the hospital’s practice through different perspectives. Part of an effort to make sure that things are understandable to visitors/patients/families, such as signage, logistics, and processes. Committee has been really helpful to introduce the voice of the customer and patient and have been asking useful questions about why things are done certain ways, spurring learning. Last week, an event was held to
celebrate and thank them. In the process of making changes to time off benefits to accommodate the new ESST (Earned Sick and Safe Time) rules. It is a very complicated process and there are likely to be people unhappy no matter what changes are made. The hospital is expected to have this by January 1st , however, there are still some pieces of legislation that have yet to go out, complicating the process. The new system makes it harder to have the PTO system and it might be easier to go back to an older system. Intended to be a protectionary benefit but has brought about some unintended consequences (ex. Takes away ability to be punitive to people who don’t show up to work). Additionally, there are FML (Family and Medical Leave) policies to be made in 2026 that complicate things, as the hospital is trying to make sure that the decisions made now don’t make later changes more difficult. Hospital does not object to the idea, but the legislation has not told them how to implement the policy.
- Financial Report
- Not a good month, with an operating loss of $923,000. Loss not from one or two things, but more a mixed bag of things (lower pharmacy, CCIC (Cancer Care and Infusion Center) and surgery volumes). Some volumes are close to budget or right on budget (inpatient days, clinic, births, rehab visits, imaging procedures). Considering the budgeted loss, about $717,000 unfavorable to the budget. Plan had been to grow revenues and reduce expenses. The expenses have been coming in as hoped, however, revenues have not. Some of that has to do with insurance payments. Internal reasons have been compounding. The pandemic involved swings in volume, shut down surgeries, etc. Additionally, the Expanse Implementation was during that
same period and the Expanse Post Live phase had some coding backlogs and involved playing catch-up. However, the Change Health Care Cyberattack has been more disruptive than the pandemic and expansion for the pure revenue cycle. External issues have also influenced things. Prior authorizations, denials, post pandemic activity and the emergence of United Health Group (UHG) have all had an impact. Insurance companies have been able to build up their technology and AI systems, which has increased denials. The technology imbalance between insurance and hospitals is a problem. UHG have also caused problems, as they are a for-profit and have forced the non-profit health services that worked better with hospitals to become more competitive. UHG is also aggressive in the marketplace. Revenue Cycle Optimization depends on making sure that systems are set up as well as can be, reducing denials and manual work, and making sure that underpayment recovery continues. Need to continue aggressive payor negotiations and to monitor Medicare Advantage contracts. More will be clear at the end of the year. One issue is advantage products that the hospital just may not be able to participate in, which they need to communicate. Hospital cannot become a magnet for people with terrible insurance that are refused by their local hospital, so they will have to follow the trends of other hospitals. Critical Access Hospitals are also having the same problem along with denials and administrative burden. CAH’s have an advantage in how Medicare pays them, but the managed care products have negotiated different contracts changing that. This needs review on a higher level. The terms and conditions of how and when they pay is a
negotiated rate, and when payments are denied by insurance, the burden falls on hospitals. Courts seem to be moving faster than legislation on this problem (court case in the South), but legislation is stalemated.
- Verbal Budget and Finance Committee Report
- Committee did not have a better answer when they heard this financial report. It is a long-term issue that the hospital needs to deal with. Committee has been doing work on refinancing the debt. They have one proposal that will use balance sheets, and the committee is currently working on a proposal. Committee decided to go with a lower fixed rate, instead of one that was higher but could be decreased depending on financial situation. The five-year rate will reduce the debt, but they will still need to look at refinancing at the end. Rate is about 4.4%. An auditor selection didn’t recommend changes to the policy. Committee changed partners within the auditor firm. Capital expenditure policy was also discussed. Policy requires $250,000 to come to the board, which means only 2-3 come in a year. Committee did not change the policy. Financial plans need to get in before the end of year. May be a need for another council meeting in December.
- Verbal Governance and Planning Committee report
- CEO hire and compensation was revied by a firm. Compensation analysis and benefits were all good.
- Round Table/Announcements/Questions
- Retreat is coming up. The agenda will be finalized after tonight. Some time will be allocated for the board and an update relative to the work the Hospital City Governance Committee has been doing. Trying to not do a full review of strategic plan, but there will be time for those big issues and what has already been done, including where hospital stands in terms of mitigation and strategic goals that are non-financial. There will also be updates on where they are trying to grow revenue.
- Board moved to a break followed by a closed session.
