PMH set to plan its way out of financial disaster
Pocahontas Memorial Hospitalﾒs board of directors will this week begin a series of strategic planning meetings targeting the financially ailing hospitalﾒs future as a ﾓgoing concern.ﾔ
The board received results of a study that compares four scenarios, including:
ﾕStatus Quoﾗmanagement practices remain unchanged. This plan forecasts a $578,000 loss for fiscal year 2011-2012, a $498,000 loss for 2012-13 and a $440,000 loss for 2013-14. According to Arnett and Fosterﾒs audit report, ﾓthe hospital has suffered recurring losses from its operations (more than $713,000 for 2009-10).ﾠ This raises substantial doubt about the hospitalﾒs ability to continue as a going concern.ﾔ Arnett and Fosterﾒs Rod Hardy said getting the ﾓgoing concernﾔ message is serious. ﾓItﾒs telling you changes have to be made,ﾔ he said.
ﾕOperational Improvementsﾗthe hospital would remain autonomous, but would implement operational improvements that project a $7,000 profit for 2011-12, a $138,000 profit for 2012-13 and a $244,000 profit in 2013-14. PMH has already begun operational changes including changes in employee vacation and sick leave, reductions in overtime, bringing the billing department back to PMH and collecting co-pays from patients at the point of service. All those changes have come about since PMH contracted with Minnie Hamilton Health Services, a Federally Qualified Health Center in Calhoun County. MHHS management has been overseeing operations at PMH since shortly before the retirment of PMH administrator Don Mulenthaler in August.
ﾕOperate as a division of MHHSﾗPMH would be an branch of Minnie Hamilton Health Systems, which would take over management. This option has by far the most financial advantages with projected profits of $238,000 in 2011-12, $373,000 in 2012-13, and $500,000 in 2013-14. But that would mean that PMH, a county-owned hospital, would have to become a non-profit, not public, entity. The county commission must sell its assets valued at more than $15,000 at auction on the courthouse steps, which presents the board with two problems: the non-profit would have no money with which to purchase the hospitalﾒs assets and another healthcare company may purchase the building and its equipment, but not operate the hospital. Hardy said this option should stay on the table, but it will ﾓtake awhile and some legal gyrating.ﾔ
ﾕOperate as part of a larger healthcare entityﾗPMH would be taken over by a healthcare corporation. This option was not detailed on the report.
The PMH board will meet Thursday, November 4, Tuesday, November 9, and Wednesday, November 17, to review the entire report, then ﾓdo some brainstorming to come up with which option makes the most sense for us at this point,ﾔ board chair Dr. Robert Must said Tuesday.
The board is expected to choose a plan at its regular meeting November 18.