Coast Hospital (Bad) News

The May 28 meeting of Mendocino Coast District Hospital's Finance Committee brought more dire financial news courtesy of interim Chief Executive Officer (CEO) Wayne Allen. According to Allen, the projected net operating cash available to the hospital on June 30th will be $63,000. He also stated that creditors who have been put off are starting to demand payment. The interim CEO also noted that adjusted patient service revenues, as of the end of April, 2019, are $3.5 million less than they were last year at the same time. Despite this drop in volume the number of full time employees has increased by 4.6%. A clear bottom line is apparent, a hospital living on the financial edge can't afford a significant drop in patient generated revenue while increasing its work force. There's also a clear message here for anyone below the CEO and CFO level and not protected by the union. Some mid-level managers and extraneous management types are going to need to update their resumes.

If readers want more data to show where Mendocino Coast District Hospital (MCDH) is at, try the total number of outpatient encounters (outpatients account for over 80% of hospital revenue). Those numbers are down from 45,118 last year to 44,169 this year. Need something more compelling yet quantitative? Gaze at the monthly net operating surpluses or loss by month for the last year:

  • April, 2018 = a loss of $410,003
  • May, 2018 = a loss of $246,685
  • June, 2018 = a gain of $52,771
  • July, 2018 = a loss of $232,278
  • August, 2018 = a loss of $90,356
  • September, 2018 = a loss of $493,716
  • October, 2018 = a loss of $152,199
  • November, 2018 = a loss of $320,403
  • December, 2018 = a loss of $301,248
  • January, 2019 = a loss of $275,146
  • February, 2019 = a loss of $363,249
  • March, 2019 = a gain of $2,150
  • April, 2019 = a loss of $212,497

Over thirteen months, that's $3.1 million in net operating losses offset by just under fifty-five thousand in gains.

Yet there are a small handful of yammerers (see the “Coast Hospital Cabal” piece in the May 22 AVA) who continue to maintain that the money from the Measure C parcel tax will save MCDH and sustain its ability to operate independently. Let's look at those numbers. 

The parcel tax money for this year has been collected. It totals a bit more than $1.5 million. Obviously, that does not come close to offsetting $3 million or $2.75 million or even $2.5 million in losses. Furthermore, one has to recall that more than $700,000 of that $1.5 million parcel tax pool has been promised to pay for the implementation of a new electronic health record (EHR) system from the Meditech company.

Meditech's website claims, “Our fully inter-operable web-based platform navigates the care continuum with unparalleled confidence, so you can see the full picture and treat the whole patient – no matter where you are.”

At that May 28 Finance meeting, Dr. William Miller, MCDH hospitalist, presented a different take on Meditech. Keep in mind the new Meditech EHR is scheduled to “go live” on July 1, 2019.

At one point Dr. Miller said, “I absolutely do not think we are ready to go live on July 1st. I have serious concerns about this program.”

Dr. Miller cited a recent May test of the new Meditech system in which the doctor's notes and everything else that should be entered on a real case file were going to be put into the new EHR, but Meditech could not even register the patients into its system. Miller recounted another test performed when he tried to order Heparin (heprin) a blood thinning drug; the new Meditech EHR interpreted it as Cefazolin, an antibiotic. He contacted the MCDH pharmacy about the error and personnel there stated that they were aware of such situations, but that Meditech had not figured out a way to correct the errors as yet. Dr. Miller said, “As it stands right now, I think we'd be better off staying with our current software.” This in light of Dr. Miller describing the current EHR at MCDH as really bad, “It's horrible.”

According to the contract between MCDH and Meditech, the hospital still pays Meditech on July 1, even if the EHR system isn't ready to go. Keep in mind that MCDH will be making $700,000 (plus) annual payments to Meditech for multiple years.

By comparison the MCDH Board of Directors meeting on the last Thursday in May proved tame. A couple of agenda items that looked like they might provide figurative fireworks were avoided, in part by the deft parliamentary maneuvering of board member Steve Lund. In addition, board member Amy McColley gave a Powerpoint presentation of a self-assessment the board completed in April. McColley laid out for all to see the shortcomings the five board members acknowledged in the self-assessment study. The other board members did not react defensively. Instead, they proposed and voted unanimously for a board retreat within the next 45 days. Given the collegiality on display concerning that agenda item and others, the upshot of the retreat may be a board that is able to work together and not at cross purposes.

If only the financial end of things would take such a positive turn…

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