The Drew Memorial Health System Board met for their regularly scheduled monthly meeting at 11:30 a.m., Monday, February 27.
Representatives from Baptist Health that attended the January Board meeting, CEO Troy Wells and COO Doug Weeks, were present and accompanied by CFO Brent Beaulieu and Sydney Fellow, head of the Information Technology Department, to speak to the board about the options they had developed since the last meeting.
Wells opened the presentation by stating that a strength of the Baptist Health System is the longevity of the leadership team and that they are a faith based, non-profit organization.
The system has grown in the last 60 years to include healthcare campuses across the state.
Weeks spoke to the board and stated that he had been asked what the hospital had done wrong to end up in this financial situation.
“The answer is, we aren’t seeing anything that you’ve done wrong,” Weeks answered. “Healthcare is a challenging industry, especially challenging coming out of the pandemic. There are payer issues, labor issues and we have seen those in various locations. We want to focus on what we have done at Baptist Health to move past those challenges.”
Weeks then pointed out that Drew Memorial is surrounded by mostly critical access hospitals within the region and this affects how the hospitals are paid. Drew Memorial is not considered a critic access hospital.
“We were able to come by last week and take a very detailed tour and your facility is in great shape,” Weeks added. “There doesn’t appear to be any capitol improvements around the corner. The OR’s are fantastic. L and D is a wonderful place for soon to be mothers. You seem to be delivering a very high quality of care. You’ve got really strong primary care and specialty clinics available here. The weaknesses that we came across, I don’t think will surprise you. You have a revenue cycle problem. There is payment issues related to payers, you don’t have the leverage that an organization like Baptist Health does when you walk into a room and start talking about rates. You have labor challenges. We have the ability to spread those costs out. We have really good data management tools that allow us to adjust costs when the hospital census changes. One thing I will point out, and I know it isn’t popular to talk about, is taxes. With our regional facilities in Malvern and Stuttgart, which are not critical access hospitals, both of those facilities are supported by a local tax that happens to be significantly higher than the one that is in place in Drew County. Possibly three to one. We think that is possibly an opportunity for this area to consider. We want to investigate compliance further. We don’t know that there is an issue, probably bring some of our compliance experts in just to check things out. We want to make sure that their billing practices are consistent with what you are charging patients. We know that because we have experienced problems with that before. We centralize all our administrative staff, so we have a consistent level of expertise. We have four regional hospitals and they all had a good year last year.”
“In our view, it would be smart for Drew Memorial to have a partner,” Wells added. “Baptist has a strong regional hospital model that works. We think that applying that model here would really help this hospital continue to be a leader in this part of the state. It is necessary, I can’t imagine Drew Memorial not being a healthcare provider for this area. Most regional hospitals in Arkansas do need tax support. It’s just part of keeping the local, community hospital healthy.”
“We estimate that it is going to take nine to 10 million dollars in capital investment from Baptist Health, for just normal transition costs and operating losses until we can get things going in the right direction with the revenue cycle, which will take time. Our board thinks that this is a smart decision to partner with Drew but they are interested to know this board’s appetite and willingness to support to increase the tax that supports the local hospital. Those are the things we would like to here more from you on.”
Drew County Judge Jessie Griffin addressed several questions including the issue of taxes.
“I don’t have a problem with it if its worth while and we are educated on the importance of the tax,” Griffin stated.
“Part of the conversation with the community is unfortunately the idea that Baptist will tax our community and take the money back to Little Rock,” Wells stated. “That is absolutely not true but we have to be able to communicate that properly to the community. We produce documents now to our regional hospitals so that people can see where the money goes.”
Board member Josh McKiever asked what the implications would be to the outside specialty clinics that are already in place at Drew Memorial.
“We always try to do what the community needs and what they will support,” Wells added.
“What if we have physicians that are affiliated with JRMC for example. Will a partnership prevent people from seeing the doctors they are already established with?” McKiever added.
“No,” Wells stated. “Hospital privileges are hospital privileges. We have open medical staffs at all of our hospitals.”
Board President Mike Akin asked if a partnership was made, would Baptist enter into some type of lease agreement with Drew Memorial and the county.
“Yes, we would sub-lease from the 501c3,” Wells added. “This keeps the local involvement.”
“If a partnership is the decision we jointly decide to take, is there a line in the sand drawn and a particular date set where Baptist would take over,” Akin asked.
“Yes, there is an affective date that would be picked and we typically chose the first of the month to keep it clean for tax and governmental purposes,” Wells said.
Board member Wayne Owen asked how Baptist would deal with the existing debt that the hospital has.
“We would continue to make payments to those debt holders,” Beaulieu stated.
In regards to staffing, Wells said that there would be local administration but there would be less administrative positions on the local campus if a partnership with Baptist was made.
Akin then asked how much time was needed for Baptist to complete their compliance checks and Wells said a few weeks.
“By next months meeting, if you get all the information you need, we should be able to make a thumbs up or thumbs down decision on this partnership,” Akin added.
A representative from HRG, the company that is contracted by Drew Memorial for revenue cycle management, was present at the meeting to discuss mistakes from the previous month is collection efforts.
The representative stated that previous problems included a labor shortage and that this issue had been rectified with off shore labor.
Board members Mike Akin and Carl Lucky expressed their extreme disappointment with the downward trend in collections that HRG has produced.
Stout Technologies made a presentation about antimicrobial lighting. Robert Akin introduced the company stating that they had done some work previously at the Drew County Courthouse.
The meeting then went into Executive Session to discuss the quality and credentials report and personnel matters.
The next hospital board meeting is scheduled for 11:30 a.m., Monday, March 27.
