- Board Members Present
- Board Chair: Rick Estenson
- Executives Present:
- Jennifer Fischer (Chief of Staff)
- Zander Abbott (President and CEO)
- Eric Guth (CFO)
- Guests/Presenters: N/A
- Closed Session Announced? Yes – Marketing activity related to the Hospital’s competitive position with other health care providers that offer similar positions.
- Consent Agenda approved with no questions/discussion.
- Special Announcement: Crystal Mulvhill leaving board to become the HR director for the hospital. Her service on the board recognized.
- Chief of Staff Report: No concerns with medical staff credential files. Medical Staff credential files approved. No discussion.
- No presentation or action items this month.
CEO Report:
Strategic priorities updates
Operations: Jefferson Rd project is coming along. Good teams working on various issues, including tech issues. Meditech is present to help with transitions and onboarding for staff. Working on interface between Meditech and Epic. Planning for possibility that Allina might not get it all done by September date. Process going well, but unwieldy. Opening dates starting to solidify. Allina will see last patient on August 28. Will then staff clinic for a week and not see patients. Allina clinic will be closed down during the following week but staff available to support patients. NH will take ownership of building over Labor Day weekend. Allina staff will start as NH employees the day after Labor Day. Staff will begin seeing patients in Jefferson Rd building on September 18. Urgent care will be open entire time except Sept 16-17, when it is moving. Everything is on track.
Questions
Operations details: Will Allina staff be available to patients during the week the clinic is closed? Not in person, but will still triage patients, talk on phone. When urgent care is closed, there will be expanded clinic access and referrals to other urgent cares. What about access for returning college students? Transition will mostly be in place before students return. Operations teams working on other logistics.
Technology: Moving three years of Allina records into Meditech.
Questions
Also providing access to Epic record? Yes, read-only access pdf of record. When system starts up, patient will be in Meditech record and will be able to SEE record from Epic.
Other: Community meetings about transition happening: 50 North, Colleges, etc. Well-attended meetings, lots of questions on records, timing, building access. Ad will go out next week that advertises new specialists. Annual Report is done and in circulation.
Quality and Safety Priority: Recertification for stroke and trauma programs happening.
Engaged Workforce: On track. No discussion.
Financial Performance
Medicare advantage plan collections decline because of state/federal changes, increase in traditional Medicare collections. Medicaid relatively unchanged, but anticipate a coming decline. Self-pay is on increase, which has downside of increasing bad debt.
Community Partners
Genevieve left community, contracted throughout the state. So need to work with new partners for long term care/retirement facilities.
Meals on Wheels change. Administrative burden has become too much for NH. Looked at options. Identified Three Rivers as partner. NH will still make meals and cover some costs. Meals on Wheels board will meet with Three Rivers, handling transition. Will mean different administrative team will manage the program. Should all be behind the scenes. Questions about how many people program serves and if it is meeting need. Serves about 50 people now. There is not a waitlist.
Partnering with Health Finders, waiting for approval of funds from Rural Health Transition.
Financial Report (Eric Guth)
Big operating loss. Big budget loss. Most volumes on budget except surgery, which is 28% below target. Bad debt is a factor in financial position. Not much change in birth center usage or in patient days. Clinic visits down a bit from last couple of months. Rehab and outpatient all over budget.
Payor mix stats provided. Was huge switch to Medicare from Medicare Advantage and shift from Medicaid to self pay because of federal changes. NH birth center has a positive payor mix, moving towards commercial insurers rather than governmental, which is helpful. 58% of bad debt is from individuals with insurance.
Questions
Questions about Medicare Advantage. People moving away from Medicare advantage bcz systems not taking it anymore. NH is not considering dropping Medicare advantage at this point. Questions about how birth center is doing? Seeing positive results from expanding the birth center in 2020-21. Are we seeing increased pediatric patients bcz of birth center? Unclear. Peds patients are increasing. People are willing to drive here to be seen in birth center.
Reimbursement on payor categories: Huge write down on Medicare advantage. Reimbursement for gov payors is 15-20 cents on dollar. Commercial insurers is more like 55 cents. Also seeing disparities between commercial payors. BCBS consistent. HP pretty consistent. Can control commercial rates with negotiations, but takes several years. Can’t control the governmental rates. So discount rate increases as charges increase but payout does not.
Question about the self-pay line? 2025 was high bad debt because of Change health company collapse, which made it hard to get paid. This area is lumpy overtime. Do we bill self-pay at 100%? No, under state law, required to give discount of lowest commercial payor.
Surgical Trends: Surgical budget not being met. Growth in orthopedics, but one provider out on leave. General surgery pretty consistent. ENT variability. Provider out a couple weeks in May, which makes an impact. Hired a new ENT provider, which incurs some expenses several months up front. OBGYN: non-C section. C-section rates have increased as birth center grows. But takes time away from clinic time. Looking at ways to address this. Profitable now, but will lag behind in the coming months because of staffing issues. Podiatry: pretty consistent. NH proactive about shutting down OR room, etc., if surgeries not scheduled, to save money, while still making sure coverage for OBGYN, birth center, through LOCUM. Discussion highlights how thin the bench is. One provider out can really impact finances. Might want to emphasize/make known that new providers are experienced providers/surgeons, not newbies.
Questions
Are there surgeries we can do to increase usage that we are not doing now? Looking at urology, more orthopedics. General, urology, and gyn use a specialized robotics device we’d like to have—good to find other specialties to make this possible. Opportunities in the next 3-5 years. Expensive device. Maybe question is can we increase what we’re doing? GI surgeon, for instance, doing more can use equipment more.
Question about Self pay discount rate last year? 79% was bad debt from Change Healthcare.
Revenue: on budget for the month. Payor mix matters within department. Global numbers are combination of all. Budget is on track with write off.
May financial outcomes without Allina: supplies are down compared to budget. Drugs are over budget. Looking for ways to source drugs cheaper. Loss for month is better than budget. Good investment month. June looking good for budget. July is looking light.
Allina financial outcomes: budget approved a few months ago. June a lot of start up costs for the move (IT staff, hardware like computers). Fall: start up expenses related to staff, onboarding. Huge expenses will start to be offset by revenue in the fall.
Also, service line growth: cancer center will have an additional clinical day starting in July, which should increase revenue. New provider in place. Good foundation for growth. There is also demand in this area to fill that capacity.
Questions
Any changes related to Faribault clinic changes? More patients coming here. They are a combo of private pay and govt pay. NH is seeing more families from Faribault. People know there is no surgery on weekends in Faribault.
Cash on hand: Big payout today of $3 million from Change Healthcare, finally. This is not saving the day. These were dollars due to us. But will have a positive impact. Staff did a good job getting this to happen. Total Change Healthcare $ impact was 3.3-3.4 million. A lot of impact was about staff time and other issues. This will all go into cash on hand next month. Won’t impact operations.
Announcements, questions? Finance committee meeting is July 21, with Great Lakes Investments.
Break, followed by Closed session pursuant to Minn. Stat. 144.581, subd. 5.
