July brought a profit of $231,966 to Cook County North Shore Hospital, said Controller Yvonne Gennrich at the Thursday, August 20 hospital board meeting, but the year to date loss is $91,033. The numbers change as Medicare makes adjustments, so knowing ahead of time what the financial picture will be at the end of the year is almost impossible.
The hospital board discussed how to set the levy amount for 2010 given the unknowns regarding Medicare adjustments and upcoming costs, such as labor negotiations and a possible H1N1 flu pandemic. Gennrich pointed out that they budgeted for a lot more swing bed use in 2009 than is being used, but they would not have known that from the 2008 figures.
Tom Spence suggested that counting on taxes to fund operating losses is “dangerous” and asked what they would do if the levy was not available. Administrator Pearson said they would negotiate with the labor unions, discontinue certain services, or lay off personnel.
Kelly Swearingen suggested including union employees in trying to figure out how to cut expenses. As both a taxpayer and an employee, she said, she does not want to see her taxes go up but wants to keep her job. Department heads are involved in budgeting, she said, but “worker bees” might be able to help, and their involvement would give them a greater sense of ownership in the success of the hospital.
Abrahamson said providing services with the given reimbursement rates puts them “up against a rock and hard place.” Before insurance was common, he said, levies funded hospitals. When insurance became common, hospitals would tell insurance companies what they would be charging, but now, insurance companies tell hospitals what they will pay. “We wouldn’t exist if this wasn’t a critical access hospital,” he said. Critical access hospitals are reimbursed by the federal government for the actual costs of caring for people on Medicare.
Head Nurse Bridget Sobieck said public assistance is not as available as it once was, but the hospital is still obligated to serve patients even if they can’t pay. If the hospital closed, some people would not even have the gas money to get to a Duluth hospital even if they had a broken arm that needed to be set.
Thepublic needs to know that any tax increases are absolutely necessary, Spence said, and that without those increases, the quality of the “product” would need to go down.
Pearson said a levy increase of just over 10% would mean a levy amount of $400,000. Theboard must set the levy amount soon but could reduce that amount when it learns more about budget needs at the end of the year. It could not increase the amount once it is set, however. The board passed a motion to set the levy amount at $425,000.
Life and long-term disability agent
Both John McClure of Grand Marais and Ochs Insurance of St. Paul offered to prepare bids for life and long-term disability insurance on behalf of the hospital, which is required to send out requests for bids every five years.
Ochs made the same offer to both the hospital and the county, but it came with the stipulation that it would be named as the agent of record on whatever policies were chosen. McClure has been the hospital’s long-term disability agent for over 20 years and would lose the account if Ochs prepared the bids for the hospital.
If the hospital had McClure prepare the bids, it would need to post public notices, send them out, and analyze them without McClure’s help because he would likely be submitting a bid on behalf of Assurant, the hospital’s current long-term disability provider. Pearson said they would probably want to get help interpreting the bids in that case.
McClure said he thinks allowing Ochs to be the agent of record is unfair, but he would be willing to provide all the same services Ochs is offering if they would guarantee that he would be the agent of record.
McClure recommended that the hospital review its current benefits and decide whether it wants any changes before sending out for bids. He also suggested that the board ask sales reps from several top companies to come and present what they had to offer.
The board deferred its decision until fall.
Boiler upgrades
Rory Smith, who has been investigating upgrades needed for the boiler system, told the board that an engineering company could do a “boiler study” for $5,900, which would include investigating the feasibility of hooking into the proposed biomass-fueled district energy plant, and could do construction drawings for $14,850.
Boiler upgrades will not be necessary in 2010, Smith said, although they would reduce fuel costs. Theboard decided to wait before proceeding to see what happens with the city’s federal district energy grant application.
Portable MRI
Pearson reported that the physicians on staff do not believe they would have enough referrals to meet the minimum of four MRIs twice a month required for a company to bring a portable MRI unit to Grand Marais.
The doctors are interested in increasing local ultrasound services from two days to three, however.
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