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Spectrum releases its assessment of Westlake Regional Hospital

The long-awaited report gives a General Summary of the Conditions Assessment and Strategy for the future. A sale of the hospital is precluded for now, heavy debt-to-asset ratio on March 29, 2011 - and County Judge Executive Ann Melton says, that regardless of what may being speculated, a sale of Westlake won't happen on her watch if she can help it. The report also includes a Strategy for the future -turn around plans - which gives hope for what could be, and should be, Adair County's flagship business: Healthcare. It also includes a review of salaries paid to healthcare providers at present. -CM

Part 1, CM Report on Report: General Summary

By Ed Waggener

Spectrum Health Partners recently released "Business Assessment of Westlake Regional Hospital, Columbia, KY. March 29, 2011," to members of the local media this week, and was given to ColumbiaMagazine.com on Thursday, July 20, 2011.

The report includes a rather daunting summary of the March 29, 2011, situation, but the Spectrum Health Partners leadership team headed by Rick Brown, interim CEO of Westlake Regional Hospital; Will Moore, Partner, Spectrum; and Ken Doran, President and CEO of the Franklin, TN turn-around team, see great potential for the future of the institution.



More importantly, both have expressed belief that, in the near future, the institution will be the major driving force behind a movement for better health in the area, an objective clearly subordinated to the economic well-being of the institution in the past.

The full 84 page report is now open public record and is available at the hospital.The summary includes the following findings and opinions of Spectrum Health Partners, LLC as of March 29, 2011, verbatim from the report (bold face emphasis by CM):
  • Westlake Regional Hospital is cash flow negative in the current year and now routinely operates with five (or less) Days Cash on Hand

  • Information Systems have not been adequately developed within the organization and the facility is highly dependent on manual process to support all operating functions

  • Current year Financial Reporting has been materially incorrect, and financial processes in place need to be materially overhauled to improve accuracy of reports and provide actionable management information

  • The Debt to Assets Ratio of the hospital is now excessive, with recent borrowings used to fund working capital and operating losses.

  • Given the high debt of the hospital, little if any debt capacity exists to support additional borrowings, meaning cash flow must now be generated from operations

  • While the physical building is reasonable well maintained, Plant and Equipment has limited technology and is almost fully depreciated

  • Hospital Admissions are highly dependent on a small number of employed/contracted medical staff, with little if any voluntary attending physician activity

  • Physician employment relationships should be examined and aligned with physician production. All attempts must be made to correct and/or avoid compliance issues.

  • Clinic Operations are inefficient from a staffing perspective and highly dependent on Rural Health Clinic cost reimbursement

  • Revenue Cycle issues have been ignored over time to the point that process improvements, Charge Description Master maintenance, and managed Care Contract renegotiation are now critically important to resolve.

  • Potential exists for Operating Expense improvement in both salary and non-salary costs, but hard decisions and potential controversy will be required to implement.

The report to the media was released following an Attorney General's Opinion on a complaint filed by Sharon Burton, Adair County Community Voice.Next: Part II Provider Salaries


This story was posted on 2011-07-26 08:45:45
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