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KershawHealth passes 2 percent employee raise

Increase to go into effect in late December

Posted: October 5, 2010 1:35 p.m.
Updated: October 6, 2010 5:00 a.m.

Most KershawHealth employees can expect a little more in their paycheck at the end of December, thanks to a 2 percent across-the-board raise enacted as part of the healthcare system’s Fiscal Year 2011 budget.

The approximately $112 million budget was unanimously passed at the KershawHealth Board of Trustees meeting Sept. 27 and went into effect Friday.

“The salary increase is to recognize that we have to stay competitive in the market,” said Trustee George Corbin.

“We (also) need to recognize our employees and make sacrifices in other areas to do so,” added Jody Brazell, who was installed as the board’s chairman at the end of the meeting.

The new budget makes several assumptions, including a 2 percent inpatient admissions increase; 3 percent increases in births, emergency department visits and most outpatient services; and 5 to 10 percent increases in certain services at the Elgin outpatient/urgent care center.

“We felt the 2 percent increase in inpatient volume was reasonable,” said Vice President and Chief Finance Officer Don Trippell.

Trustee Dr. Marguerite Carlton, however, expressed concern with the idea that KershawHealth might only see a 2 to 3 percent recoupment on services she said were down 10 to 11 percent in the previous fiscal year.

“That’s what we’re projecting,” said Trippell, “but we hope it’ll be more.”

KershawHealth is also expecting a 5.8 percent decrease in Medicaid inpatient admissions, 1.2 decrease in similar Medicare inpatient admissions and a Home Health budget that will decrease by 5.8 percent.

Trustee Dr. Tallulah Holmstrom expressed concern about those numbers and a resulting thin profit margin. Trustee Scott Ziemke, the board’s finance committee chairman, and Trippell projected an operating margin of only .4 percent and total margin of 1.7 percent.

KershawHealth and CEO Donnie Weeks said that is why every part of the budget is important.

Corbin agreed.

“It’s important, but those decreases were factored into this budget,” said Corbin. “It is thin, but that’s why every line item is important.”

A price increase of 5 percent was included in the budget factoring in to a projected $1 million increase in net revenues. But expenses are projected to increase 5 percent as well, balancing the projected revenues. In a budget summary handed out to trustees, finance officials said much of the 5 percent revenue increase would be as a result of new services. However, no new positions were budgeted.

Other budget assumptions include a 4 percent increase in health insurance benefits costs; 6 percent increase in drug supplies; 3 percent increase in surgical supplies; and between 2 and 4 percent increases for other supplies.

“We’re up in admissions where patients are spending the night but down in outpatient services,” said Weeks. “So a critical factor is to determine which a patient needs: being an inpatient or receiving outpatient services?”

“We have conservative budget hopes,” added Brazell. “We think every business is doing that and we will continue to do that.”

Trustees also voted unanimously to approve a more than $6 million capital budget that includes 73 different items. The largest is to replace KershawHealth’s MRI unit at a price tag of $1.907 million. The budget summary stated that 45 percent of the capital budget was being set aside for clinical/patient care items, 19 percent for facility expenses and 25 for information technology (IT).

KershawHealth has budgeted some $1.5 million on IT, including $350,000 for a computerized physician order entry system and $300,000 for a software package that will handle a number of quality, credentialing, peer review, case management and other tasks.

The healthcare system is also budgeting $250,000 to a replace a large chiller for the Karesh Wing, $200,000 to replace domestic water lines and $180,000 for a pair of basic life support ambulances.

There were some items deliberately left out of the capital budget, one of which might be paid for by taxpayers: an estimated $10 million to renovate and equip the old Burndale shopping center. KershawHealth bought the center and adjacent bowling alley several years ago with the intention of transforming it into an outpatient center.

The Burndale project is one of eight listed on a ballot measure connected to a proposed 1-cent county sales tax increase. Part of the tax, if voters approve it, would cover $4 million of the $10 million transformation. KershawHealth has already pledged $3 million of its own money toward the project, with the Hospital Foundation committed to raising another $3 million. All three sources of funding -- KershawHealth, the foundation and penny sales tax -- would then cover the project.

“Some of these items aren’t on the budget, but they could be back depending on how things develop,” said Weeks.

The two other items left out of the capital budget were $500,000 to replace a boiler and $750,000 for a healthcare practice in the town of Kershaw.

Trippell said KershawHealth may seek funds for the boiler replacement from a state revolving fund and from American Reinvestment and Recovery Act funds to offset some of the IT expenses.

Ahead of approving the budgets, trustees received a report from Ziemke and Trippell on August’s financial activity. KershawHealth suffered an operating loss of $1.1 million compared to a budgeted loss of $182,000 and a prior year operating loss of $71,000. The total net loss was $980,000 for the month.

That made the fiscal year-to-date (2010) operating loss $1.1 million compared to budgeted income of $1.1 million and prior year income of $2 million. KershawHealth has suffered a $568,000 net loss compared to budgeted net income of $2.2 million and prior year net income of $3.1 million.

The reason Fiscal Year 2009’s net income was so much higher, said Ziemke, compared to 2010’s so far, was because of recoupments from Medicaid ($1.7 million) and Medicare’s Recovery Audit Contractor program ($1.2 million).

In other financial news, the board learned that its finance committee had approved a $273,000 capital request to replace nine wall-mounted emergency department telemetry monitors with 13 such units while retaining two portable units as backup.

“This would enhance monitoring patients in all our emergency rooms,” said Vice President and Chief Operating Officer Mike Bunch. “The current ones are 10 years old and the new ones will automatically interface into Meditech.”

Bunch said the upgrade would allow for monitoring standardization as a patient flows through the hospital.

“A big piece of this is that, right now, we have to shuffle patients around, which affects patient satisfaction. This will move us forward in the nursing area,” Bunch said.

Vice President and Chief Nursing Officer Gloria Keeffe agreed.

“They’re interchangeable, which means the monitor can go with the patient if necessary,” she said.

Other business

* Weeks, in going over a list of accomplishments for Fiscal Year 2010, recognized Don Witham’s years of service to the board, including the last two as chairman. Weeks included the opening of the Elgin center and opening of its second floor; acquisition of women’s services and gastroenterology, pulmonology, psychiatry and nephrology practices; a partnership with the Medical University of South Carolina for the REACH tele-stroke program; addition of 20 rehabilitation beds to the Karesh Wing; and implementation of the pediatric hospitalist programs as being the top accomplishments for the year under Witham’s leadership.

“This has all happened in the last year and a lot happened the year before that, too,” said Weeks.

Witham thanked the board and added special thanks to the healthcare system’s staff.

“We received a letter from the daughter, from Orangeburg, of a 96-year-old patient who thanked us for taking care of her mother. That makes it all worth it,” said Witham. “Thank you for letting me serve as chairman these last two years and I will continue serving through 2013.”

Weeks and Brazell presented Witham with a small gift and a plaque thanking him for his service.

* Carlton, who is heading up the board’s quality oversight committee, presented an updated performance improvement priority dashboard the highlight of which has been a steadily improving “fall rate.” Fall rates describe the rate, per 1,000 days, a patient falls, for whatever reason. The goal is to keep fall rates for inpatients under 4.5; long-term care patients under 3.0; and hospice patients -- reflected as a percentage -- under 15 percent. The first quarter of the calendar year provided a baseline of 3.96 falls for inpatients, 2.2 for long-term care patients and 7 percent for hospice patients. By the third, most recent, quarter, those rates had improved to 3.05 for inpatients; gone up slightly to 2.78 for long-term care patients; and dropped to 2 percent for hospice patients.

“We identified patients prone to more falls and put (in) additional staff and other measures,” explained Carlton.

She said committee members have worked hard this year to make these and other improvements in patient care quality.

* Weeks reported that a husband-and-wife physician team that had indicated a commitment to come to Kershaw County did not work out, but that the hospital still hopes to bring on someone to add to Camden’s local orthopedic group. He also said KershawHealth is working to bring in part-time urgent care and emergency department physicians.

“There is a significant need for primary care, especially in the town of Kershaw,” said Weeks.

· Trustees voted unanimously to approve a new Plan of Care for the healthcare system. Keeffe said the plan was “pretty much the same” as it had been three years ago. The only significant change was adding information regarding the Elgin center.

* Weeks noted that Dr. Olajide Balogun has been elected chief of medicine and Dr. Macy Vidrine as chief of surgery. He recognized Dr. Todd Alderson’s work as chief of staff for the past two years and said the staff would be electing a new chief this month.

* Weeks reported that KershawHealth joined forces in August with the United Way of Kershaw County to sponsor the second annual Springdale 5K at Sunset to benefit the New Day on Mill transitional housing project for women and their children. He also said KershawHealth is working with Doby’s Mill Elementary School on its Race 2 Read event and the Downtown Camden Guild for its Broad Street Trick-or-Treat.

* Trustees unanimously approved the appointments of Greg Joseph of Camden and Charles Phillips of Elgin to the KershawHealth Board of Visitors.

* Witham noted that the board received education on healthcare reform Sept. 21. Holmstrom said she came away from the session feeling “more excited” about healthcare reform where she had originally been concerned about the changes.

“What excited me most was that there’s going to be chances to cooperate -- to have ‘physician champions’ and bridge the gap that’s existed for a while. I now see (reform) as a possible force for positive change,” said Holmstrom.

* The last item trustees voted on before heading into executive session was a joint election of its officers and committee assignments. In addition to Brazell being elected chairman, Ziemke will now serve as vice chair, with Corbin taking over for him as chair of the finance committee.

The vote was not unanimous, however, falling 5-1-1, with Carlton voting against and Holmstrom abstaining. Both voiced their displeasure not with Brazell and Ziemke as officers but with the committee assignments.

Carlton, especially, thought some trustees -- most notably Ernest Witherspoon -- were taking on too much responsibility. Witherspoon, she noted, has been placed on five of the board’s eight committees in addition to being the board’s Hospital Foundation liaison.

“We talked about that,” said Witham, regarding Witherspoon’s assignments. “This actually came down from what he had originally.”

Witherspoon expressed no problem with serving on the multiple committees. Most of the other trustees only serve on one or two committees; Brazell, as chair, will serve on four.

Following the executive session, the board voted to approve the Medical Executive Committee’s (MEC) credentialing and activity recommendations. By doing so, seven physicians from Columbia Nephrology were given provisional affiliate status, two members of Pitts Radiology were given provisional active status as was psychologist Leslie Franks. Also, following what MEC described as a focused evaluation, Dr. Darrell Palladino was moved from provision active status to active.

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