Hospital enacts temporary expense reduction plan
by Justin McGill, Executive Editor --
Sep 30, 2009 | 0 0 comments | 8 8 recommendations | email to a friend | print
The country’s economic downturn has not bypassed Trigg County Hospital, which is instituting what hospital CEO Alisa Coleman called a temporary expense reduction plan.

The hospital’s approximately 150 employees were told last Wednesday that all of them, including Coleman, would be required to give up one paid vacation day per year and have their salaries frozen effective Oct. 1 and have 401(k) plans replaced by 403(b), in which employee salary deferrals are made before income tax is paid and allowed to grow tax deferred until the money is taxed as income when withdrawn from the plan. The 403(b) switch takes place in January.

“That will not have anything to do with the employees’ ability to contribute,” Coleman said. “No salaries are being decreased, but no salaries will be increased effective Oct. 1.”

The plan, Coleman said, will save the hospital approximately $50,000 a month.

Coleman said since December, the hospital has seen an increase in the number of hospital patients who either do not have insurance, cannot pay for services or are unwilling to pay.

“We treat those patients regardless, and that’s our mission to do that,” Coleman said.

Another factor causing financial problems for the hospital, Coleman said, is the recent closing of Johnson Controls, Inc.

“Economically, that was a huge impact on the community and the hospital,” Coleman said. “Other businesses have had layoffs and cut benefits. I don’t think we’re the only one that’s had to do that.”

Coleman said the hospital will receive some compensation for patients who qualify for the Disproprtionate Share Program, a state program for the indigent, but that compensation doesn’t come until a year later.

Coleman said the hospital also tries to get those patients assistance through Medicaid, Medicare or other insurance if they qualify.

“We desperately try to get folks eligible for those programs,” Coleman said.

Bills from patients who do not meet the qualifications for any of those programs qualify as bad-debt writeoffs for the hospital, Coleman said.

As a critical access hospital, Trigg receives reimbursement plus 1 percent for allowable Medicaid and Medicare costs.

“Not everyone we see has Medicare or Medicaid,” Coleman said. “A lot of the people we see have nothing, and that leaves us with fewer payers covering our costs. It’s a decrease in cash, and when that happens, we have to do what any other business would do, and that’s cut back on expenses.”

The hospital will continue to add new programs, including daily MRI availability and possible sleep studies. Coleman said community support would be vital to a financial turnaround for the hospital.

“We need folks to have their mammograms here and their blood work,” Coleman said. “The things we do here, we do them well. Our employees provide excellent care, and that’s why we’re not cutting any nursing positions or any clinical positions. That’s not what we need to do, and it’s not on our radar screen. We need to get as lean as we can without compromising patient care.”

Currently, the hospital is awating word on a $300,000 grant application with Delta Regional Authority and $500,000 in state ARRA funds for electronic medical records, which are mandatory by 2014 to comply with Medicare.

Coleman said the hospital has set triggers in place that include increasing the number of days the hospital have cash on hand and decreasing accounts payable to a more current status.

Said Coleman: “If we meet those two trigger points, we’ll be able to guage how long this plan will need to be in place.”
Click for Cadiz, Kentucky Forecast
Sponsored By:
Beaus Blog Logo
Read Beau's Daily Analysis