Financial complexities in rural healthcare top the agenda at EPHC

The October meeting of Eastern Plumas Health Care’s board of directors focused largely on financial issues.

Vice-Chairman Dr. Paul Swanson, who is also on the finance committee, reported that the hospital has had a net loss of $700,000 for the first three months of the fiscal year. Last year at this time, however, EPHC’s losses came in at $1.1 million, but were offset by incoming Intergovernmental Transfers (commonly referred to at IGTs), according to Chief Financial Officer Katherine Pairish.

Small rural hospitals such as EPHC have to get creative to stay afloat, she explained.

EPHC relies on IGTs to help make up the difference between what the hospital and clinics charge and what they are paid by Medi-Cal and Medicare. Medi-Cal and Medicare pay approximately 15 cents on the dollar.

EPHC’s patients are overwhelmingly insured by one of these two insurance providers, so making up the difference is essential to the hospital’s survival.

IGTs come from a number of state and federal programs through which hospitals and clinics can recoup some of that lost money. EPHC applies for as many of these programs as possible to try and break even.

EPHC hasn’t booked any of these IGTs yet this fiscal year. When it does, its finances will look much brighter, but this month’s report highlights just how important these programs are.

Patient volumes are also down, and several board members voiced their concern. Board President Jay Scutt said, “If you compare it to last year, it’s quite different. We need to look at this and figure it out.” Board member Harvey West suggested that it is an area they’ll want the new CEO to investigate.

Scutt also pointed out that the “clinic numbers drive ancillaries” [lab and radiology], so they’ve been down as well. In her report, however, CFO Pairish noted that, “October is looking better in clinic encounters [patients], and lab and radiology numbers are up, as well.”

Pairish also reported that the hospital had applied for a number of grants. The SHIP and CARE grants are both focused on hospital quality measures. EPHC just received word that their SHIP (Small Rural Hospital Improvement Grant Program) application was approved. This pays the hospital $48,000 over four years for projects related to quality improvement and education for health information management staff.

The hospital’s CARE (Critical Access Hospital Assistance For Rural Health Care Enrichment) grant will fund a new web portal-based patient safety, incident reporting, and risk-quality-safety management system for data collection.

It will improve the quality of EPHC’s patient-centered care in a measurable, reliable way. This $15,000 grant will also pay for employee training on the new system.

Finally, the hospital received a grant of $10,000 to start its own CNA program in the Portola Skilled Nursing Facility. The program was created by the SNF’s Director of Staff Development Deb Mancebo, who will also teach the course.

The class will run for six weeks, and it will allow the hospital to train CNAs in its facility and then hire them afterward. This increase in available CNAs will, in turn, allow both the Portola and Loyalton skilled nursing facilities to admit residents who are currently on a waiting list.

Getting Political

Board Chairman Skutt announced that EPHC had recently been visited by Congressman Doug LaMalfa and Kim Vann, the California State Director of USDA Rural Development. The visit was spurred by EPHC’s recent award of a Rural Development grant of $145,000 for a new ambulance, which Vann had announced several weeks earlier. 

But, the two also sat down with several members of the hospital’s executive team and board to discuss issues of concern to EPHC. One that Pairish drove home was the need for help getting the Pine Street Clinic certified as a Rural Health Clinic, which will mean higher reimbursement from insurers.

CEO Search

Interim HR Director and Acting CEO Jayne O’Flannagan reported that the board is searching for a new CEO. This past week, they viewed videos from the top 10 candidates as they answered questions relevant to the position.

From this group, the board narrowed the field to four candidates with whom they had Skype interviews.

Finally, three will be coming for a site visit this week. Chairman Skutt said he hopes the hospital will have a new CEO by the end of November.

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