Tallahatchie General’s listing on auditor’s ‘watchline’ an image set back, CEO says

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Published: April 17,2014

Tags: Business, education, finance, healthcare, Mississippi

tallahatchie general hospital logo_rgbIt takes time and money to turn around a publicly owned rural hospital’s image once it is seen as troubled and cash-strapped.

That’s why the chief administrator of Tallahatchie General Hospital says he fears his work to convince Charleston and the surrounding communities to think differently about Tallahatchie General sustained an unnecessary set back in State Auditor Stacy Pickering’s recent report on rural hospitals.

Tallahatchie General and three other taxpayer-owned rural hospitals — Tippah County Hospital in Ripley, Natchez Regional Medical Center in Adams County and Montfort Jones Memorial Hospital in Kosciusko — landed on a “watchline” that Pickering said represents hospitals that fall below national financial standards.

The auditor said concerns over the future of Mississippi’s 25 taxpayer-owned rural hospitals led him to direct the Performance Audit Division to examine audited financial statements of the 25 hospitals from 2009 through 2012. He said he specifically wanted to determine which of the hospitals are best situated to weather a period of challenges ahead with reimbursement declines from Medicare and Medicaid.

Pickering’s report “The Financial Health of Publicly Owned Rural Mississippi Hospitals” ranked 15 of the hospitals as performing above national standards, six as meeting the standards and four as falling short of them.

Unfortunately for Tallahatchie General, the auditor’s assessment took in 2009 and 2010, the two worst financial years in the hospital’s history, said Jim Blackwood Jr., administrator/CEO.

The ranking would have been much different with 2013 in the calculation, he said, listing a profit of $1.86 million for last year and profits of $374,684 and $87,659 for 2012 and 2011, respectively. For those three years, revenue grew from $14.5 million to $23.7 million, and days of cash-on-hand increased from 9.79 to 13.89.

By contrast, Tallahatchie General ended 2010 with 1.59 days of cash-on-hand, along with a loss of $443,755 on revenues of $9.5 million. Near the end of that financially awful year, the hospital’s board brought in Blackwood and Sunflower Management Group to run the facility.

Since the Pickering assessment left out the big turnaround year of 2013, Blackwood must now begin repairing the image damage he says the report inflicted on the 18-bed community run hospital.

He started the process shortly after the Pickering report by sending the auditor a letter suggesting a new assessment next year and in the years beyond.

“If future assessments are performed which again use four years of data, we anticipate TGH will perform much better under the model once the data for 2009 and 2010 is used.

“We have done a lot to pull ourselves out of the hole,” Blackwood said in an interview Monday.

While Tallahatchie General may have come full circle, the report on rural hospitals broke the circle somewhat, according to Blackwood. “That is my concern with the auditor’s report. We had come a long way,” he said.

“It affects us indirectly. The assumption is if you have good quality and good care, then you wouldn’t have the low numbers.”

Right out of the gate upon Sunflower’s hiring in November 2010, the hospital company renovated patient rooms and increased the number of licensed rooms from nine to 18. The new rooms doubled in size and became certified for “swing beds,” a designation that allows a hospital to use the rooms for patient recovery and rehabilitation rather than acute care.

“The patient facilities were dated,” Blackwood said. “The community didn’t utilize the hospital. They were going to other hospitals in the area” including Grenada and Batesville 25 miles away and Oxford 50 miles away

What was to be a 99-bed nursing home stayed only half full after design and workmanship deficiencies delayed construction of a new wing, according to Blackwood.

Straightening out the problems with construction of the new wing, adding new and enlarged hospital patient rooms and obtaining a dual designation for acute and swing-bed care “helped the picture considerably,” Blackwood said.

“That brought in dollars.”

Tallahatchie General also extended the hours of its rural health clinic and today is averaging slightly below 2,000 patients a month, he said.

And in a step that Blackwood says has significantly enhanced the community’s perception of THG, Sunflower Management put each employee through customer-service training. “That can’t be understated,” he said of the boost the training gave the hospital.

In responding to the audit report, Blackwood said the peer group comparisons may have been skewed by several of the higher-ranked rural hospitals having received “windfall” Disproportionate Share Hospital (DSH) payments from the federal government for treating uninsured patients. “This anomaly will likely self-correct if the model is performed with 2010-2013 data” that includes adjusted lower DSH payments to the hospitals that received the windfall amounts, Blackwood said.

He said he expects any subsequent review will list TGH with hospitals operating above national fiscal standards. If nothing else, he added, “I am very confident we would be up above the watchline.”

Another of Pickering’s “watchline” hospitals, Tippah County Hospital in Ripley, is focusing on cutting expenses, according to administrator/CEO Donald Jones, who said he has brought costs down by 10 percent since taking over six months ago under the county’s management contract with North Mississippi Health Services in Tupelo.

“Our revenue stream has not kept up where it needs to be but we are doing really well on expenditures,” Jones said.

The facility recently became a Critical Access Hospital by reducing its number of licensed beds from 45 to below 25.

The hospital continues to have 40 nursing home beds, which Jones said stay 100 percent full.

The rebound is not all about cutbacks, according to Jones. He noted the hospital last month opened a wellness and patient rehab center which includes a swimming pool for aquatic therapy.

“We have to create our future. And we are doing that,” he said.

“We are going to pull this thing out.”

 

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