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Declining revenue worries PVHC board

$2.2 million loss this fiscal year as board mulls 2015 budget  

As they look toward a budget for the 2015 fiscal year, Powell Valley Healthcare board members know something has to change.

As of April 30, Powell Valley Healthcare had lost $2.2 million during the 2014 fiscal year, which ends June 30.

“We’re going downhill faster than we’re going up,” Trustee R.J. Kost said during the board’s meeting Monday. If that continues, he said, “we’re not going to be here.”

“Currently, we’re losing — in the hole — about $500,000 per month,” added Trustee Larry Parker. “That’s not crying wolf.”

Bill Patten, PVHC chief executive officer, said later the revenue decline is due to multiple factors. Patient numbers are down. That, in turn, also is caused by a number of factors, such as physician turnover and the loss of Dr. Jeff Hansen.

Hansen “was a workhorse,” Patten said, and he provided surgical care for many orthopedic patients.

While orthopedic surgeon Dr. William Jarvis is on board, his practice still is building.

Early in the year, OB/GYN Drs. Roger Brecheen and Karla Wagner left, followed by family practitioner Dr. Betsy Spomer.

While their replacements — OB/GYN Drs. Jenkins Clarkson and Dr. James Lloyd, and family practitioner Dr. Angela Mills — have arrived, “any time there is a turnover, there will be a lag,” Patten said.

Hospitalist search

While Powell Valley Healthcare has been recruiting for two hospitalists (doctors who care for hospitalized patients), PVHC family practice doctors last year began a rotation system in which each of them took week-long shifts to care for patients at the hospital.

“That took primary care doctors out of the clinic more than we wanted and impacted their ability to see patients,” Patten said. “We never thought it would take us this long to recruit two hospitalists.”

Beginning June 1, doctors will go back to the original model of caring for their own patients in the hospital and in the clinic, he said. Meanwhile, recruiting for two hospitalists will continue.

Mike Gilmore, vice president for outpatient services, said he is in contact with a few candidates for the positions.

In a further effort to address low patient volumes, Powell Valley Healthcare has added a number of mid-level, advance-practice providers. Those include physician assistants Megan Gilroy and Lisa Smith.

Another reason for the revenue decline is the fact that all four Emergency Department physician positions at Powell Valley Hospital were vacant for an extended time due to resignations, retirement and death. Until they were filled, those positions were covered by locums, or traveling temporary physicians, at a cost of $777,165.01 so far. When you add the cost of temporary physicians for the clinic and Express Care, along with travel and lodging for all of them, that number swells to $952,065.45 for the current fiscal year.

“Those are huge numbers there, and for next year, huge savings,” Patten said.

Three of the ER positions now are filled, and a search continues for a fourth doctor, who would work part-time. Several candidates have expressed interest, and plans are underway for candidate interviews and visits to the PVHC campus.

“We have a lot of good candidates of late,” Patten said.

Temporary staffing also has been necessary at Powell Valley Care Center and at the PVHC fiscal and patient care divisions. Those costs add up to $684,255.25 year to date, with the lion’s share of that, $427,768.46, for the care center, which has had difficulty staffing enough nurses.

Care Center Director Nicole Ostermiller told the board Monday the care center now has only one temporary nurse, down from six previously.

Other factors

Another factor in revenue reduction is the fact that some visiting physicians — doctors from other cities who see patients at Powell Valley Healthcare on a weekly or monthly basis — have begun performing their procedures on Powell patients at other locations.

Dr. Valerie Lengfelder told the board on May 19 that PHVC doctors are concerned about that trend and want to make sure those providers are encouraged to perform their procedures at Powell Valley Hospital.

“Our job is to refer to them, then they do the procedures,” she said.

Patten said he and others will be working to encourage those doctors to “keep Powell patients in Powell.”

The conversion to the NextGen electronic medical records system also has added to revenue woes, but actual numbers are hard to quantify, Patten said.

“Early in the year, it affected cash flow because we weren’t able to get bills out in a timely fashion, but that’s fixed now,” he said. “Certainly, it has increased staff time to get certain work done, and that’s a negative impact. We were spending a lot of time doing workarounds.”

While NextGen concerns still not completely addressed, many of those problems now have been resolved, and NextGen is considering a credit to compensate Powell Valley Healthcare for the problems it has experienced with the system.

Solutions pondered

Beyond addressing patient volumes, temporary and visiting physicians and NextGen issues, Patten said the ideal solution to revenue problems is to “grow yourself out of a financial predicament.”

“The tricky part is getting the revenue from that growth quickly enough when you’re in a really negative financial position,” he said. “Through the end of April, we had lost $2.2 million, and the projection is that we’ll lose $3.1 million by the end of the fiscal year. From a cash position, you just can’t sustain that long.

“So, while growth is the preferred option, we have to look at both sides of the equation, at least in the short term. We’re looking hard at expenses. Supply costs — are we buying under the best contract we can?

“We’re looking hard at overtime hours. We’re looking closely at overall employee productivity.”

The board asked for a cost analysis for each department of the hospital in preparation for budgetary decisions it must make next month. Patten said that process already was underway.

Looking ahead

Patten said he still believes Powell Valley Healthcare could be in a position to upgrade and expand its facilities in three to five years — and that would be a positive change to meet the organization’s needs and position it for the future.

“I keep hoping this year is what I call the reboot year,” the bottom of the downward financial curve before the trend turns upward again, he said. “We need to have there solid bottom ones in a row before we can approach lenders for the kind of money we’re going to need.”

Without that history of solid financial performance, “it’s like going to the bank and saying, ‘I’m overdrawn on all my credit cards, but I want to build a new house.’”

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7 comments

  • posted by A.K.Mayes

    May 29, 2014 7:38 am

    Make health care affordable and the patient numbers will rise. Instead of recruiting high dollar specialists, recruit some good old fashioned doctors - people don't care so much if a doctor has a bunch of letters after his name...they want affordable health care and doctors who care about the patients, not the almighty dollar.

  • posted by Michelle

    May 28, 2014 5:51 pm

    I have left Powell but still keep up on what is happening in town. I open the paper to read an article about the hospital knowing at the end there is going to be some comment by Clipstein. Just once I would love to read something without this opinion. I hope this person never needs this hospital to be the difference of life and death...oh wait they never use their real name, hmm. I guess that's smart.

  • posted by Pearl

    May 28, 2014 5:10 pm

    So bill Patton writes something good about Jeff Hansen???? "He was a WORK HORSE" what kind of facility is this???

  • posted by Pearl Perfect

    May 28, 2014 4:17 pm

    WHAT???? The loss of Dr. Jeff Hansen??? They are they ones who fired him... That place is going down the toilet. The reason why PVHC patients go to other places is that the services are more qualified and have state of the art facility. In regards to the post above, so true. You try and help this facility and they don't care. They have never cared about employee's. Rumor has it is that PVHC is going to file for bankruptcy.

  • posted by Sam Allison

    May 28, 2014 2:33 pm

    Maybe you should finish building the new clinic and actually use it instead of having physicians decide they want to move back into old buildings and have them be remodeled once again so that they have more room. Dont see what the point of a new clinic building was.

  • posted by Disgusted taxpayer

    May 27, 2014 1:09 pm

    "We’re going downhill faster than we’re going up,” Trustee R.J. Kost said during the board’s meeting Monday. If that continues, he said, “we’re not going to be here.” Really? Is that surprising? Look at some of the idiotic mistakes you people have made in Powell concerning money.It's a wonder Powell has even survived this long.

  • posted by clipstein

    May 27, 2014 10:17 am

    When someone tries to help and don't even get a thank you. then a problem when I went there once--how many others feel the same way. Operate like a hospital should and maybe things would change. how many cardwells have you allowed to move through the system

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