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Westlake acts to break even: adopts $300,000 month turnaround

In the December 27, 2012 Adair County Hospital Board of Trustees meeting
  • Austerity program vote started implementation immediately with RIF - reduction in force - of 10-20 personnel major part of plan
  • Westlake still in survival mode for short term, Chairman says, but adds firm note of optimism "We're going to get through this."
  • CEO David Rasmussen commends new trustees for utilizing their expertise in hands on manner. Two with telephony backgrounds have already cut phone costs by thousands per month
  • Mr. Rasmussens cites private volunteers who help hospital with professional services: Jeff Wall with HVAC care
  • Hospital employee health insurance goes to Bluegrass Family Health
  • New payroll system up and running.
  • Dr. Phil Aaron credentials renewal unanimously approved.

Click on headline for complete story w/photo(s)

By Ed Waggener

Adopting a combination of cost savings measures and revenue enhancement approaches, the Adair County Hospital Board of Trustees took significant steps last night to stanch the cash bleeding and put the hospital on a break even or better footing.

The steps are not without some pain. A reduction in force will cost more than 10 and fewer than 20 jobs, according to Chairman Craig Pyles, who shepherded the stern measures through with a 5-0 vote at the trustees December 27, 2012 meeting. He said that for the moment, the hospital remains in survival mode. "We've got to do what we have to do, or no one will have jobs," but added a positive note, "We're going to get through this."

Mr. Pyles said that the next 90 days are the critical ones. Most of the institution's own vital stats are positive: The clinics - Westlake Primary Care and others - are profitable. The Behavioral Care unit is doing well. Outpatient care is profitable. Costs in the ER are stabilizing. And seemingly fortuitous payments have been flowing into the hospital's coffers so there is reason to share Chairman Pyles' optimism.

In fact, two large, extraordinary payments in November, a $1,486,00 meaningful use payment and a $684,622 DSH payment provided a cushion for November to make a $1,771,364 positive total bottom line income posting possible - and, together with a relatively good month for operations, to post a $660, 368 net income for the month of November.

The problem in the determined clawing back to prosperity is largely two fold: 1) Cashflow during the growth period, and 2) Holding the confidence the public to rely on the Westlake system for basic healthcare. That has put momentary stress on top management and the Board of Trustees, but the tightfisted approach appears to be working.

All the trustees, a full five member panel now, were at the meeting, in person. In addition to Chairman Pyles, whose background is business and construction, it includes two with IT - information technology - backgrounds, Richard Grant and Neal Goal; one whose background is banking and finance, Bruce White; and a fifth, Brad Keltner, whose background is in auditing and accounting.

Westlake CEO David Rasmussen credited much of the cost savings to the knowledge and actual contributed work the very involved trustees are giving to the turnaround. He made note of the IT work of Mr. Grant and Mr. Gold, saying that their knowledge of telephony is meaning a savings of several thousand per month, while at the same time providing better communications.

Mr. Grant said, after the meeting, that they aren't through with the telephone changes, and cited the inherited antiquated PBX system, still leased and at a relatively exorbitant rate. New technology can give better service, he said. Upgrading will give better service, he said, at a much lower cost.

Intensive care patients moved to second floor

Besides the layoffs, the hospital board of trustees voted to move the telemetry patients from the ER area to the second floor. The move will maintain - possibly improve - patient care, while saving nursing care costs, and freeing up space in the ER for better patient care there.

The move involves a significant capital outlay for new telemetry equipment, but should be handled with only a slight cashflow problem. The 8 patient Nihon-Kohden system is being obtained with a 60 month lease agreement at $575 per month with the availability of a fair market value (usually 10% of original cost) at the end of the lease.

The equipment allows continuous monitoring of vital signs of multiple patients from a central station.

Mr. Rasmussen said that a transfer agreement was reached with Taylor Regional Hospital to accept patients beyond the eight Westlake might have, and to accept the patients needing the next level of care not available at Westlake, should these needs arise. In all the cost cutting moves, he and Chairman Pyles said, patient care and community needs remain topmost priorities.

Trustees give one month help on new FT to PT employee insurance

A proposal by Human Resources Director Barry Corbin for the hospital to pay half the cost of part-time employee's health insurance received approval of Chairman Pyles for a one-month payment for those former full time employees who were agreeing to accept part-time positions. After that first month, he said, the employees would have to pay under cobra provisions.

The rationale for the proposal, Mr. Corbin said, was that it would enable the hospital to have a more reliable work force of part timers rather than pay the huge premiums agency provided PRN (pro re nata) as needed nurses and other healthcare professionals. Chairman Pyles acknowledged the value of the concept, but stuck to his survival-is-the-first-order-of-business principle, saying that the matter might be reconsidered when the hospital is in better financial condition.

Trustees give insurance contract to Bluegrass Health

The board voted unanimously to change insurance carriers from Anthem Blue Cross to Bluegrass Family Health with a $280.29 single individual plan, with a 70/30 employee Westlake share on deductible, and with the hospital waiving deductibles for employees utilizing any Westlake facility.

New payroll system up and running

HR Director Barry Corbin reported that the hospital's new payroll system is up and running and that the first payroll produced will be for Friday, February 4, 2013. He said that direct deposit is just a few pay periods away. Cost savings on the new system is $400 per month for software, but even greater savings will come from reduced labor costs, he said.

Dr. Phil Aaron credentials renewed

Mr. Rasmussen gave the report of the hospital medical staff in the absence of Chief of Staff Kiteck. Only one provider was recommended, renewal of privileges for Dr. Phil Aaron. The recommendation was unanimously approved.

State inspects blood banks - find no deficiencies

Mr. Rasmussen reported that both Westlake Regional Hospital and Westlake Primary Care were inspected by the state this past week, and that neither had deficiencies.

Emergency Room having possible record high usage

The Westlake Regional Hospital Emergency room is headed for an 800 visit month, Mr. Rasmussen said, noting that that would be a new high. On one day, the ER had 35 visits, which if an average, would have put the utilization at 1,085, a financially healthy number.

MRI unit being moved to meet state requirements

Faced with moving the MRI unit or building a 200 yard canopy from the main hospital to the unit, a decision was made to move the MRI behind the radiology department at the back of the building. The move was necessitated when Mr. Rasmussen reviewed regulations and made inquiries as to a solution. He said that Jeff Wall of Wall Refrigeration volunteered professional services and that the move had been at no cost to the hospital.

Trustees okay application for new mammography unit

At Mr. Rasmussen's recommendation, the trustees unanimously authorized him to apply for a matching Appalachian Regional Commission (ARC) grant to secure a new mammography unit. The unit will cost $241,000, with the ARC paying 70% and the hospital paying 30% or $72,333.00. The decision on the grant isn't expected until next summer, at the earliest he said, and also answered Chairman Pyles question about a back out if funds are not available. Mr. Rasmussen said that once the grant application is approved, the hospital trustees will then face financing decisions and decide whether or not to proceed.

Chairman Pyles agreed there is a need for the equipment and the service, and that it should make good business sense.

Mr. Rasmussen said that Russell County Hospital, where he was previously the administrator, had obtained ARC funds for its mammography equipment.

Good crowd

Evidence of the value the public, employees, and hospital staff put on the survival of the hospital, the attendance overflowed the hospital cafeteria, where the meeting was held, with 5-10 observing the proceedings from the hallway at various times during the session.

About your Adair County Hospital Board of Trustees

The Adair County Hospital Board of Trustees meets at 6:30pmCT each last Tuesday of each month, at the Westlake Regional Hospital Conference Room, 901 Westlake Drive, Columbia, KY. Craig Pyles, Chairman; Neal Gold, Vice Chairman; Richard Grant, Secretary; Bruce White, Treasurer; Brad Keltner, Trustee. David Rasmusssen, Administrator. Cheryl Wall, Administrative Assistant. Phone 270-384-4753. Ext. 0 for operator.

This story was posted on 2012-12-28 05:34:26
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Westlake's Craig Pyles: We're going to get through this

2012-12-28 - 901 Westlake Drive, Columbia, KY - Photo by Ed Waggener. Adair County Hospital Board of Trustees Chairman Craig Pyles told those at the Thursday, December 27, 2012 meeting, at which a $300,000 per month austerity plan was adopted which includes a reduction in force of more than 10 but fewer than 20 personnel, that the measures were consistent with maintaining quality care, but were necessary to the institution's survival. "We're going to get through this," he said.
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Westlake CEO Rasmussen and Treasurer Bruce White

2012-12-28 - 901 Westlake Drive, Columbia, KY - Photo By Ed Waggener.
Westlake CEO David Rasmussen right reported on efforts to get Westlake Regional Hospital to get to the right size and to position itself in the healthcare market to survive, meet the needs of the public, and provide quality healthcare. One avenue studied, he said, was a look at becoming an ambulatory care center. He and trustee Richard Grant visited a center at Nicholasville and made inquiries in Frankfort about licensure needs. He said that the plan was put on hold because of the cost - in money and much needed management time - of securing Certificates of Need for such a facility. At left is Adair County Hospital Board of Trustees member and treasurer Bruce White.

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New trustees all bring special skills

2012-12-28 - 901 Westlake Drive, Columbia, KY - Photo by Ed Waggener. CEO David Rasmussen cited the special skills of all the new members of the trustees of the Adair County Hospital District, overseers of the Westlake Healthcare system. At left Trustee and Secretary Richard Grant has a back gound in Information Technology, as does Trustee and Vice Chairman Neal Gold, right. Brad Keltner, in the center photo is an accountant with an auditing background. Mr. Rasmussen commended CJE Ann Melton and the Adair Fiscal Court for appointing the board. Judge Melton was in the audience, as were Magistrates Billy Rowe (7), Billy Dean Coffey (5), Joe Rogers (6), and Harold Dean Burton (1).
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