DMHS board hears sustainability plan from leadership team


In a special called meeting Friday afternoon, the Drew Memorial Health Systems board of directors and the Senior Leadership team at the hospital presented a detailed sustainability plan to the board.

Chief Financial Officer, Melodie Colwell presented most of the plan to the board. The plan included eliminating some non-clinical positions and a hold on rehiring non-clinical positions, converting travel nurses to in-house contracts, and renegotiating several vendor and provider contracts. Those changes would save the hospital 1.4 million dollars in 2023 according to Colwell. 

The plan recommended staff reductions of $766,000, which included “15 specific positions” Colwell said. Also included are contract reductions of $309,000, reduced employee benefits expense of $60,000 and printing reductions of $60,000. These items would save the hospital an additional $1.42 million in the year. 

Revenue enhancement opportunities in 2023 included converting part of the underutilized current hospital to a Chemical Dependency Unit. The plan estimates annual revenue from the new unit to be more than $1.3 million. Expanding a Federal program that allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a discount of 25 to 50 percent, called the 304B program, would increase revenue by another million dollars according to the plan’s authors. Revenue enhancements in 2023 are $3.5 million in the plan. The total cost savings and additional revenue proposed was $4.7 million. 

The plan also depends heavily on obtaining $5.6 million from the American Rescue Plan Act (ARPA) funds that the state of Arkansas received from the U.S. Treasury to mitigate the effects of the COVID pandemic. 

Arkansas received funding requests under former Governor Asa Hutchinson but an executive order from newly elected Gov. Sarah Huckabee Sanders halted the funding process. Hospital Chief Executive Officer Scott Barrilleaux told the board that they had been in discussions last week with the Arkansas Department of Finance and the Department of Health on how to obtain funds from the ARPA. 

The hospital has been losing money since the pandemic and is currently collecting 30 cents on every dollar in revenue. In the last few months, the hospital has been in discussions with Baptist Health Systems in Little Rock about leasing the facility and operations. Baptist currently operates hospitals in Arkadelphia, Stuttgart, Malvern and others. This sustainability plan was presented to the board as an option to keep the hospital independently operated. 

After the presentation, Board Chairman Mike Akin commented, “Based on your calculations here, we have an annual cash deficit of $8.7 million, we get the ARPA money, that props things up. Then, while we are kind of propped up, we enact some of the revenue and expense enhancements proposed. So, the way I look at it, we are still $4,700,000 upside down. I don’t see it” Akin stated.

Akin ended the meeting saying that it was for informational purposes only. No action was taken by the board on the presentation. 


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