TR Health financials improve

2009 was a “huge improvement” financially for Three Rivers Health compared to 2008.

That’s one of the observations shared during the Three Rivers Health Authority Board meeting Thursday morning (April 29th) as representatives of Plante & Moran, PLLC reviewed the hospital’s audit report for 2009.

According to the report, Three Rivers Health had an operating loss of about $400,000 in 2009 compared to a loss of almost $3 million in 2008. The bottom line for 2009 was a loss of $589,000 compared to a loss of about $3.1 million the previous year. Auditors said, “2008 was a really, really tough year, and there has been significant improvement in 2009 based on the difficult decisions that this board and management have made.”

Plante & Moran issued an “unqualified opinion” regarding the audit, the highest evaluation of the hospital’s accounting processes.

During a post-meeting interview, Bill Russell, president and CEO, expressed pleasure with the report. He noted that there were “no deficiencies” and it was “a good year in the books.” He said the audit reflects “that there is integrity in our accounting processes and we feel really good about that.”

Regarding the bottom line for 2009, Russell said, “Last year was a better year. It wasn’t where we wanted to be, but a much better year than the previous year, and this year is going to be a considerably better year than last year. We anticipate to be operating above the line. We’re going to leave the red environment and move into the healthier environment of black ink so that’s a good thing.”

The meeting also brought some encouraging signs in the March financial reports showing net income for the month of nearly $100,000 ($97,535). Although it was more than $140,000 ($140,188) under budget, there was a “black ink” performance for the period that shrank the year-to-date loss for 2010 to just under $213,000 ($212,894).

In reviewing the March numbers, Steve Andrews, vice-president of finance, said, “March ended up pretty close to where we thought it would be.” He said March was the “highest admission month in quite some time” at 150, identical to a year ago. He noted that lab procedures in March were higher than the prior year and budget, indicated that home health visits were also up, and said other outpatient visits exceeded budget in March.

Regarding FTE’s, Andrews said March was the first month that the impact of recent adjustments were noticeable and indicated the effects will continue to be seen over the next three months.

Andrews said that “most notable” in the report was the fact that outpatient revenue for the month exceeded budget.

As far as April is concerned, Andrews said the “best case scenario” is that there is “probably going to be a slight profit.”

TR Health will host Town Hall meetings

Three Rivers Health will welcome area residents to a series of Town Hall Meetings scheduled for 7 p.m. on Wednesday, April 28th, and Thursday, April 29th, in the Three Rivers Public Library Community Room at 920 W. Michigan Avenue.

This event has been specifically designed to gather audience input regarding the strengths of the hospital, opportunities for improvement, and future possibilities that will meet the healthcare needs of our local community. Residents can attend either evening.

“Three Rivers Health remains dedicated to providing the compassionate, award-winning care our community expects and deserves,” said William Russell, CEO of Three Rivers Health. “We’ve faced some difficult challenges this past year, and I feel it is important to connect with our community members and receive their input. These town hall meetings provide an opportunity for Three Rivers Health to listen to the Voice of our Community.”

Russell, along with representatives from the Three Rivers Health Authority Board, Medical Staff, and leadership team will be at the meeting to listen to comments and take questions from the audience.

For more information, call (269) 278-1145, ext. 202, or visit www.threerivershealth.org.

TR Health Authority Board meets

Two actions related to a $3.3 million loan by Chase Bank to Three Rivers Health were items of business during the March meeting of the Three Rivers Health Authority Board Thursday morning (March 25th).

The board approved a resolution to extend debt covenants with Chase for another 90 days – until June 1st – with instructions to negotiate the terms. The covenants call for an accelerated principal payment of $30,000 a month for the next three months, plus the original principal payment, and paying off a ‘swap’ of $210,000 by March 31st.

Another 90-day extension on the note expired on February 28th and required payment of a $30,000 extension fee.

The board also authorized the administration to continue to negotiate with another financial institution, CapitalSource, to establish a line of credit and empowered the Executive Committee to approve the line of credit when complete.

The moves reflect ongoing efforts to shift the long-term debt from Chase. Lancaster Pollard, a consulting company that works with health care organizations on financing and refinancing, is assisting with those efforts after being engaged to do so through board action in October. Regarding the work by Lancaster Pollard, CEO Bill Russell said, “Mostly the feedback they’re getting is that the banks are in a ‘wait and see’ position.”

During a post-meeting interview, Russell discussed the debt problem and said, “It will be nice when we get this attended to and this is no longer an issue and we can actually pay more attention to what’s really important – and that’s taking care of the good folks around here.”

Three Rivers Health is working to shore up its financial condition after recording a net loss of more than $3 million in 2008. The red ink was trimmed to just over $757,000 in 2009.

After losing more than $273,000 in January of this year, Russell announced last week a work force reduction affecting 28 departments and involving the elimination of 16 positions and the reduction of 45,000 hours worked. According to Russell, the “reduction in force to equalize hours to volumes” was being implemented “to return Three Rivers Health to financial viability and to continue and sustain the mission of quality healthcare.”

The financial report reviewed during Thursday’s meeting revealed a net loss of just under $37,000 ($36,932) in February, an amount that was nearly $71,000 ($70,654) below budget. Steve Andrews, Vice President of Finance, said there “could be a slight profit in the month of March.” For the first two months of 2010, the bottom line is a net loss of a little over $310,000 ($310,460) which is more than $240,000 ($240,389) below budget.

TR Health – Work force reduction

William Russell, CEO of Three Rivers Health, has announced that a reduction in work force will take place over the next two weeks.

In a news release issued Monday afternoon (March 15th), Russell said this will affect 28 departments and regrettably, involve the elimination of 16 positions and the reduction of 45,000 hours worked.

The news release says that, over the past two years, Three Rivers Health has struggled to maintain current programs and services while enduring operating losses. A significant contributor to these losses is the number of hours being used to produce the amount of care and services in light of lower demand. This coupled with Michigan’s economy, pressures from lending institutions, and mandated information technology upgrades has had a direct impact on the financial position of Three Rivers Health.

According to Russell, the reduction in force to equalize hours to volumes is being implemented to return Three Rivers Health to financial viability and to continue and sustain the mission of quality healthcare.

Larry Clark, Chair of the Three Rivers Health Authority Board, said, “This move to right size creates the opportunity for Three Rivers Health to regain financial stability without compromising patient care or access and should insure long-term employment stability. We remain committed to providing high quality healthcare to Three Rivers and the surrounding area.”

Three Rivers Health recorded a net loss of more than $273,000 ($273,529) in January, an amount that was nearly $170,000 higher than the loss of just under $104,000 ($103,793) that was budgeted for the month.

The February meeting of the Authority Board included discussion regarding the development of “dashboards,” similar in concept to what drivers utilize in operating their vehicles, to provide information to better match staffing with volumes.

TR Health looks to improve ER services

Three Rivers Health (TRH) has launched “Lean Six Sigma” and the hospital’s Emergency Department is first in line to receive attention in the improvement process.

Alice Mayer, hired recently as Vice President of Quality & Risk Management, provided an overview of Lean Six Sigma during a “Board Education” presentation that was part of the February meeting of the Three Rivers Health Authority Board last week (Thursday, February 25th).

Mayer stressed the importance of “the voice of the customer” in the Lean Six Sigma process and said that the top hospitals have one thing in common: “They listened to the voice of their customers.”

Nancy Buscher, Vice President of Patient Care Services, said, “I think it’s phenomenal that we have Alice because we need to think differently.”

During a post-meeting interview, Bill Russell, President and CEO of Three Rivers Health, discussed the initial focus on the Emergency Department. He said, “We’re not happy, but more importantly, our customers are not real happy about the throughput process in our Emergency Department.” He explained that the hospital is “actually trying to teach these tools and we’re also trying to improve a process so those two events have been bundled into our initial program of Lean Six Sigma improvement.”

Russell indicated that two different groups are involved and said, “One is working on the time it takes from our front door until you see a doctor and the other has to do with the turnaround time for laboratory testing.”

Russell said, “We’re taking about 12 to 15 weeks, which is longer than it would normally take to do a Lean or Six Sigma project, but we’re also using it for its academic opportunity as well so that, instead of just fixing one process, we now have a group of people who actually can take the skills that they’re acquiring …and apply it again, and again, and again to a myriad of different areas so that we can get this ball rolling.” He likened it to a snowball and said, “We’re starting with a snowball and we’re going to end up with a massive avalanche of good, positive changes in our organization. I’m real excited about what we’re doing.”

TR Health shows a net loss

“Dashboards” were part of the conversation surrounding the January financial statements during the February meeting of the Three Rivers Health Authority Board Thursday morning (February 25th).

The January reports show a net loss for the month of more than $273,000 ($273,529), an amount that was nearly $170,000 higher than the loss of just under $104,000 ($103,793) that was budgeted.

Steve Andrews, Vice President of Finance, said the performance was “pretty much volume driven” and added, “Obviously, (we’re) disappointed in our ability to adjust our staffing costs to those volumes.” He indicated that meetings with departments started two weeks ago, “looking at what we need to do to adjust to the volumes.”

Discussion regarding the subject revealed that “dashboards,” similar in concept to what drivers utilize in operating their vehicles, are being developed to provide information to better match staffing with volumes.

Bill Russell, President and CEO at Three Rivers Health, indicated that the hospital is in the process of putting together dashboards and said, “By March 31st, we will have a daily dashboard that will ultimately communicate to the entire workforce in this organization and have meaningful responses on a daily basis.”

Russell said, “What we’ve got to get away from is getting financials two weeks after the close of the previous month where you don’t have an opportunity. That’s retrospective. If it’s a current dashboard, which is the daily dashboard that we’re working on developing now, it’s not retrospective. It’s current. We can react to it on a timely basis.”

Andrews said, “This is not just clinical departments. It’s non-clinical departments as well.” And Russell said, “That’s one of our historical challenges. It’s got to be the entire organization.”

Andrews said, “February inpatient volumes are pretty consistent with January. We are seeing an increase in some of the outpatient, but, if you look at the stats, you can see that outpatient is down as well. So, obviously, (we’re) disappointed there.” However, he indicated that the anticipated loss for February may be less than January because of “other revenue that comes in that’s higher.”

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