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KershawHealth has better January financially

Board reveals strategic plan categories

Posted: February 25, 2014 7:30 p.m.
Updated: February 26, 2014 5:00 a.m.

On paper, January turned out to be a better month financially than KershawHealth has seen in some time. Compare January’s $84,000 operating loss to December’s $344,000 loss, November’s $572,000 loss and October’s $902,000. For all of Fiscal Year 2013, which ended Sept. 30, 2013, KershawHealth experienced a $3.62 million operating loss and $4.75 million decrease in net assets.

Even with January’s relatively minor loss -- and $31,000 decrease in net assets -- KershawHealth has, Fiscal Year 2014 to date, suffered $2.4 million in operating losses and a matching $2.4 million decrease in net assets. KershawHealth lost $3.62 million Fiscal Year 2013 impacting a $4.75 million decrease in assets.

Still, having an only $84,000 operating loss in January led KershawHealth Executive Vice President and COO/CFO Mike Bunch to express some hope during Monday’s KershawHealth Board of Trustees meeting that some things are back on the right track.

“While, on the one hand, we certainly do not like to have losses, clearly, this is a much better month than what we’ve been experiencing (compared to) the first quarter of last year,” Bunch said. “We’re encouraged by that. I can point to any number of things that look a little bit better this month…. There was no one particular thing; I think it was a series of things that made the month look better.”

Bunch said the following statistics may have helped with creating the better bottom line for January:

• total length-of-stays decreased 3.1 percent from January 2013, with Medicare-related lengths of stay decreasing 10.9 percent during the same period;

• a 20.7 percent rise in observation patients from January 2013 somewhat offset a decrease in inpatient admissions;

• KershawHealth’s case mix -- determined by how acute a patient’s treatment needs to be -- were up for January compared to a year ago, leading to higher reimbursements for the healthcare system;

• outpatient G.I. labs increased by nearly 21 percent over January 2013;

• bad debt and charity “offset each other,” and

• inpatient commercial insurance patient volumes was up.

Bunch said these factors provided KershawHealth with a strong patient gross revenue figure -- listed on materials included with Monday’s agenda at nearly $29.69 million -- compared to a year ago.

“So, there was a lot of give and take in the numbers, depending on which angle you look at,” he said.

Helping January’s bottom line is that expenses were slightly lower over January 2013 at nearly $8.299 million, compared to $8.352 a year ago. Along with that, Bunch reported that the number of full-time equivalent employees, or FTEs, stood at 810.7 in January.

A little of what also helped in January included moving $750,000 of cash on hand into the general fund to cover certain expenses. KershawHealth did the same in December, to the tune $1 million. As of Jan. 30, Bunch reported, the healthcare system’s cash and investments dropped to $32.1 million, decreasing the number of days of cash on hand to 95.3. It marks the first time in recent memory that KershawHealth’s days of cash on hand is below 100 days.

Since learning last summer that KershawHealth could lose a projected $32 million by 2018, the board’s strategic planning committee has met often to work on solutions. That work became more intense with the hiring of interim CEO Terry Gunn.

During Monday’s meeting, Gunn and Strategic Planning Committee Chair Susan Outen talked about the fact that KershawHealth must have a plan in order to remain viable. Gunn said that when you see random variations in statistics -- a good month, followed by a bad month and then a really bad month followed by a good month again-- that is, usually, the result of not having a plan.

“You kind of wish and you hope things go well, but (with) a written strategy and a driving plan -- one our community and our patients can understand -- you get a better service,” Gunn said. “You get a better experience when you come into (a department) that is part of a strategy, part of a mission, and it all flows from there.”

He said what KershawHealth has really been missing is the strategy.

“We’ve got a mission. We’ve got highly qualified, well-intentioned, absolutely dedicated people who want to deliver excellent service and we’ve not had a strategy that we can execute that with,” he said. “You’ve got to have a plan, work the plan, we’ve got to measure the plan and then celebrate the results.”

As Gunn stated during January’s meeting and another meeting earlier this month, a draft of the new strategic plan is scheduled to be released at the end of the second quarter, March 30. Monday, Outen revealed part of the plan -- six priority categories for the plan to focus on: outpatient and emergency services; orthopedic and sports medicine; surgical services; cardiac services; women’s and children’s services; and quality initiatives.

Outen said subcommittees for each area have been created, made up of at least one trustee each, along with a physician and consulting staff member.

“Here’s our chance. Terry has given us a real strong path to go down for the strategic plan and I really got very excited to actually feel that we’ve done something and are moving forward and going to get something done,” Outen said. “If you don’t participate, then you can’t complain.”

Gunn said he and KershawHealth Chief of Staff Dr. Andrew Piasecki will work together to have physicians on the teams.

“(The goal) is to really drive what it is we need to do … along these strategic service lines, with all of them, wrapped inside a cocoon of quality. They all need to fit within that realm. What we do with these strategic services lines is, absolutely, what’s going to drive us to be competitive,” Gunn said. “That’s what it’s all about: to make sure that we are delivering what’s in the heart of the people who are delivering care … the very best service, very best quality, very best pace and for a high value for our community. And, we’re bold enough to say, people in other communities that surround us that want to see better care than what they can get in their local community.”

Outen said that the strategic plan is something KershawHealth owes to the community.

“Is this something we need to continue doing or not?” she said of the named service areas. “Or do we need to enhance it or not? That’s what they put us here for.”

Answering a question from Trustee Bobby Jones, Gunn said the first subcommittee meetings would provide trustees with background and include feedback from the community.

“These are probably going to be ‘roll up our sleeves and work sessions,” Gunn said.

During trustee comments near the end of the meeting, Outen noted that the plan will not only include feedback from the community, but it “will have to answer to the community, too.”

Gunn also alerted trustees to a new marketing effort. KershawHealth is partnering with Mad Monkey, a team of healthcare marketing specialists, to develop a brand initiative. The firm will facilitate 15- to 30-minute voluntary conversations with employees, physicians, board members, patients, volunteers and community leaders to gather insights on both accomplishments/triumphs and challenges/failures.

In addition, trustees received copies of a short questionnaire asking stakeholders:

• what are the county’s top unmet healthcare needs;

• what factors differentiate KershawHealth from its competitors;

• what services whould be provided, added or eliminated at the Outpatient/Urgent Care Center in Elgin, West Wateree Medical Complex, Burndale Shopping Center property and Healthcare Place at Bethune; and

• does KershawHealth have the reputation and strength to sustain growth into the future?

With the last item, the questionnaire also asks respondents to indicate what they believe the healthcare system’s key driving points are, or what improvements, partnerships or other initiatives are needed.

Trustees also met in executive session to discuss a medical staff report; continue a review of feasibility, planning, marketing information/evaluation/materials containing references to competitive information or evaluation; three contractual matters, including general surgery, emergency department and management consulting; and a personnel matter involving vice president contracts and incentives.

The C-I will report on actions taken following the executive session in Friday’s edition.

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