By Mary Alice Murphy

[Editor's Note: For those patients who have outstanding bills from at least six months ago, the hospital will continue to offer 50 percent off any payments received up through Dec. 30, 2021.]

The regular Gila Regional Medical Center Governing Board meeting took place on Monday, Dec. 13, 2021 at 4 p.m.

After recognizing Mallory Gonzales, who is currently serving with Emergency Medical Services, for 10 years of service, the members went into executive session.

They approved coming out of executive session, stating they had taken no action during the session. The next item was the consent agenda of minutes from the Nov. 18, 2021 regular meeting.

Under reports/updates, the first came from newly hired permanent chief executive officer Kathleen Cahill. She promised to be brief and said the members had already discussed recruitment. 

“We have five openings in critical director/manager positions,” Cahill said. “They include the director of planning, the director of HR (human resources), the director of case management, the director of revenue management and the director of medical staff services. I want to emphasize that maintaining our current staff is a focus. We will hold all-staff meetings on Dec. 17. To accommodate the different shifts, we will have three separate meetings. We will feed them at every meeting. I hope to receive some good input and feedback, and if not this time, I hope this will build a foundation for trust. We have some holiday events planned leading up to Christmas, Dec. 20-23, with Friday being the official day off. Some are contests, like an ugly sweater contest. Even with Covid, we want to get some of the patients somewhat involved, even if it’s just taking cookies and hot cider to them. We are asking for board member volunteers to judge the contest.”

She mentioned several things that she had already mentioned and was not going to repeat them.

[Editor’s Note: In the interest of transparency, this editor and author request that those things be mentioned in open meeting, because the public needs to know what those things are.]

“In January, we are going to put together a staff committee, not directors or supervisors, but staff members to come up with a corrective action plan on how we can improve our employee satisfaction scores, but really how we can move into a culture of engagement at the hospital. And I want line staff, because they are the ones in the trenches. I want them to tell us what we can do to grow that culture of engagement.”

Governing Board Member Harry Browne asked: “I want to applaud that philosophy. I hope we are prepared to pay them for work hours.”

“Yes, absolutely, it will be during work hours, and we will feed them,” Cahill said. “I’ve done this before and it has worked well.”

She said in terms of recruitment, surgery is top of mind. “Our local community has four surgeons, and one is quite ill and has taken an extensive leave of absence and may never return, which leaves us only three general surgeons. We need to backfill that. Our remaining three surgeons are really slammed, especially when you include call. So, I immediately contacted some physicians’ recruitment agencies and I have two phone interviews this week. My only reservation is that they are new grads, especially if we don’t have an adequate training in process. I will make sure that the local surgeons and total medical staff will be involved in the process. The Covid team, I was very enthusiastic about a meeting we had last week, and enthusiastic about our community’s commitment to covid mitigation. My first two weeks have been a whirlwind, but I see multiple possibilities for this little hospital and multiple opportunities for synergy with the local health care providers. I’ve already met with HMS (Hidalgo Medical Services) and other providers, and I see a real enthusiasm to work together. I am enthusiastic about seeing Grant County grow as a health care hub in southern New Mexico and eastern Arizona.”

Chief Nursing Officer Kelly Rodriguez, in her report, said nursing continues to recruit aggressively to fill the nursing positions, so that “we can continue to take patients at full capacity. We are working to secure some traveler positions. We have finished eight interviews with graduating nurses from Western New Mexico University. We have offered five positions. We had three interviews today and will offer those positions tomorrow. Hopefully all eight will come on board and join our residency program. Our ICU was opened in partial capacity a couple of weeks ago and the beds have been full the entire time. We are working with our employee health nurse, William Hemmer, and our interim HR director, Evelyn Campos-Diaz on the new mandate that will be coming in January for our boosters for our health-care workers. Very exciting to see forward movement in our labor and delivery renovations. Having a plan put together with our facilities directors is exciting. Our window for Joint Commission opens Jan. 1, so we’re working on quality measures. We’re so thankful for our mock survey, which gives us some outside views. Nursing administration will meet on Dec. 20 doing a retreat, so we can align for the new year to pull our projects together. My December recognition is for Holly Glick, our in-patient supervisor for med surg and the observation unit and ICU. She jumps in and helps wherever she is needed. Thank you all because it’s been a tough year, but we’ve had strong support from all of you. And the support of your 40 friends, Alicia, is also appreciated, and Mr. Billings doing some extra things, too. It means the world to staff to know that they are cared for.”

Next up was Interim Chief Financial Officer Greg Brickner. “Tonight, we are talking about the November statistics. Discharges have dropped a little bit. As we discussed last month, that is related to the volume lost from the ICU. In the prior year in November 2020, elective procedures were closed. But now we are doing elective procedures. Outpatient and the emergency department things are stable. A weird thing always happens with major holidays. ED went down due to Thanksgiving and weekends. Year-to-date outpatient visits are up 3 percent. I dug into the financial case mix. There are four main metrics. One is the trailing 12-month profit margin. Right now, we had losses a year ago, so as we pare those losses, the margin will go up. This margin has the most sensitivity in the formula. Days cash on hand is the second driver, and it continues to go up. Debt financing is the third. Often, we say the hospital has no debt. That is not completely true. The hospital has no long-term debt, with the key differentiation we have payables that show up as debt. Then the average age of the plant is the fourth. This has very little impact compared to the others. A weird thing has occurred and that is our Covid relief funding. Some is debt, which we are paying back, and the PPE loan was forgiven. It all went into the balance sheet as debt. Plus, then you have the losses pulling the score down. Next month we’ll discuss the audit. Because the PPE loan was forgiven in June, it shows as a massive profit and drives up the score. As you move forward in 12-month increments, by July 2023, we will lose that, so we’re naturally going to plummet as soon as it happens. The opposite of that is that this board has approved a lot of grant applications. I just got an email that they’re getting ready to start on the roof. So last year’s grant funding, we’re spending now. When it comes through it comes in as non-operating revenue, which ultimately falls into our bottom line, so it will come through as a profit in a weird way. It’s also going to change our capital investment for average age of plant.”

Browne asked if the grants were reimbursement-based. Brickner replied that they are, but they go on as asset-based and come through only as non-operating revenue. “I hope we see a lot more grants, because they will offset some of the drop we see from Covid.”

Brickner explained that none of the money spent on a contractor comes through as an expense but goes onto the balance sheet as a capital improvement. 

“What’s really the goal for all this?” Brickner asked and answered. “We want to do slightly better than break even, because we know there are expenses and investments we have to make. We continue to reinvest. So, our goal is to keep the hospital profitable but to spend the money to catch up for prior years. We want to strive to hold cash. Across the country, for instance in New York, because of Covid, 32 hospitals are not doing elective surgery. But there is no federal money coming in to offset that loss. Purely speculative, but if the physicians decided to stop doing elective surgery, that’s an immediate hit to cash. I would argue we need to hold more cash than is prudent, because we’re not out of the woods yet and we just don’t know what will happen. We know we don’t want to take on debt because that obligates future cash flows. But at the same time, to get through the losses the option is to lease capital assets, which shows up as debt. Ultimately, when do we get to where we want to be? I think it will bounce around from a low of .5 to around 3. As we work through the losses, it will probably stabilize, but more likely closer to the .5 metric by fiscal year 2023.”

Governing Board Member Billy Billings thanked Brickner for warning them, so they wouldn’t hold the new CFO accountable for a low metric. 

On cash trends, last month Brickner said Mr. Manis showed a chart showing the growth in cash since March 2020. Brickner said the community has asked how much of that was covid relief funding. “There’s a bucket with water in it and you dump in five gallons, then you pull a plug at the bottom to use some water. Which water are you using? Some hospitals that weren’t sure how they could use the Covid funding, put it aside. We didn’t have that luxury. In reality, that funding is what kept this hospital open. For fun, I took our cash balance, pulled all the Covid money out, and without it, we still wouldn’t be back to zero yet. We hit a negative $11.6 million dollars. If you were at negative $11.6 million, you wouldn’t be operating, so even today, without the Covid money, we would be at a negative $800,000. The critical access designation helped us rebuild the hospital structure and is a radical change. The key thing here is we are rebuilding our cash. Today we have $21 million in cash. Toward the end of November, we received about $2 million more in Covid relief that was targeted to rural hospitals. Holding cash and helping get new equipment in is a really tight balance we’re trying to hold.”

Billings said he appreciated hearing that, because “it’s not like we have $21 million to blow somewhere. It’s because of the windfall of the Covid relief money.”

Brickner agreed. “Here’s the success. For the month, we lost a total of $112,000. We had budgeted a $387,000 profit, compared to last year when we had a loss of $865,000. We’ve truly stabilized the hospital. We will see fluctuation, and we will see good months and bad months. We did the raises, which is important to keep the hospital operating to keep personnel. So, yes, it’s important to spend money to support staff, keep equipment up to date and continue to make the hospital be stronger. For the full fiscal year, we have a profit of $1.6 million, before depreciation versus a budgeted loss of $239,000 and compared to last year’s loss of $2.6 million. That nets us to a $433,000 profit. That’s right where we want to be. Spend where we need to.”

The last thing he reminded everyone about was the 50 percent off patient bills that are at least six months past due. Another few days are left until the end of the year. “We’ve had some participation, and I’m pleased that at least 20 patients have gotten out of debt. Actually any funds that come in are a gain to the income statement.”

Board Chair Alicia Edwards asked Brickner to repeat what the auditor said earlier on the call during the executive session.

Brickner said he didn’t recall the exact words. “He was very impressed with the turnaround from the $19 million loss to our current profit.”

Edwards said what the auditor said was: “He had never seen anything quite that extraordinary.” 

The chief of staff report was in the members’ packet.

Mike Lieb, HealthtechS3 regional manager, reported: “First thing, welcome to the new CEO. We’ve been making her drink out of a firehose and it’s not going to let up for a while. The one thing I want to mention is culture. It’s our focus here. We wanted to make sure you still had a hospital here. We’ve got that done. Now we want to focus on the staff, the training, the support. We know that there is incredible cost with interims. We would like to get them all out. No offense (to Brickner). But ultimately you need to grow your own to stabilize the hospital. We are committed to continuing to get you the help you need while we cross these bridges. We still have some work to do.”

With no old business, the members went into new business.

The first item was approval of the medical staff credentialing reports that they had heard in executive session. Members approved the reports.

Next was consideration of the bulk order agreement with Laboratory Corporation of America Holdings for the purchase of 480 Covid-19 kits.

Rodriguez said the hospital received a $260,000 grant from the rural hospital improvement program and related to it was Covid relief. “One of the bachelor students at Western asked if I could be her preceptor for a community-based program, and, of course, I said yes. She asked for ideas, and I have tons. These PCR-test kits are for at home use, with the shipping labels also included in the kit. We will distribute to local resources, such as El Refugio, SPIN, the Gospel Mission and Beginning Years, so that community members can swab at home and register online to find out their results. This funding will also include masks, hand sanitizer and wipes and some quarantine/how-to-care-for-myself-at-home information. It will expand the use of the kits into the community.”

Members approved the bulk order of the kits.

An item considered a master services agreement with Tegria Services Group, a managed services provider for Meditech electronic health record support. Brickner explained that it was a very important agreement for the hospital, as the group would maintain all the Meditech functional operations. “Best case scenario, it will save the hospital some money. Worst case, it will be break even with what we were accomplishing before. The key to this is that we will have subject matter experts on Meditech to help with things we get stuck on. It’s really a big win for the hospital.”

The members approved the agreement.

Also considered was a SelectChoice service agreement with Steris Corporation for two years of comprehensive maintenance and customer support for operating room sterilization equipment. 

Brickner said this agreement will keep the OR equipment running, “because we wouldn’t want any down time in the OR.”

Governing Board members approved the agreement. 

 Members considered a letter of engagement with Butler Snow for legal services for certain governance and operational matters. 

Browne asked if it were about the consideration of different structures, which Brickner confirmed and said the group would be reporting directly to the board. 

Members approved the letter of engagement.

A resolution considered approval of the final quarter of fiscal year 2021 financial report.

Brickner clarified that it was not the audit. “The state is requiring this. I disagree with this, but it’s from the state. I believe we will have to redo this in February, when we have the audit approved with the final audit items being put in. We’re doing this, but we believe we will have to ask you to redo it in February.”

Browne asked if there were a need to put into the resolution something like the audit is not final. “We are verifying the amounts at the end of June.”

Bricker said: “We already send the state the same management reports that we send the auditors, and then, once the final audit is completed with the adjustments, such as the PPE loan, so those things will come back through. They ask that we have this in the minutes.”

Brickner said it is a unique thing for New Mexico, that he was not familiar with, but “we need to keep the state happy.”

Members approved the resolution. 

The following resolution addressed approval of the Workers’ Compensation Insurance Policy.

Brickner said the hospital is negotiating with several carriers to get the best option for the hospital. “We are asking for the resolution, because it will come right down to the wire and we have to have workers’ compensation insurance coverage, so we are pre-emptively getting authorization from you to select the best option.”

Browne asked if the board would hear back on this. Brickner said he would absolutely report back on the decision. 

Members approved the authorization.

The final resolution was consideration of approval of a CenturyLink or other selected provider for Metro Optical Ethernet Service. 

Brickner said there are a couple of key items. “The telecom companies are very last minute. We are expanding our bandwidth between the clinics and the hospital, so ultimately we have better service for the physicians. The biggest impact is for the physicians when they are dictating. Right now, on our bandwidth, it’s not fast enough, so we are increasing the circuits, so we have faster service at the clinics. We will lose the USAC (universal service administrative credit) grants that help us pay for bandwidth. We’ll sign the contract in January, and it will take up to April to implement, so we will lose the USAC credits for April, May and June, but in July they will start again. You’re almost penalized for making changes. We’re doing it because it’s the right thing to do for patient care.”

Edwards asked if the hospital had looked at Western New Mexico Communications. Brickner said that is why the resolution says CenturyLink or other telecom providers. “Western is one of the bidders. And there is a third one. CenturyLink is the current provider.”

With clarification of the language in the resolution, the members approved the resolution.

Members adjourned.