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Bartlett begins digging into improving finances

Posted: February 29, 2012 - 1:01am

Bartlett Regional Hospital’s Finance Committee has started looking into areas where it could use fiscal improvement, and also discussed admissions concerns.

The first thing interim Chief Financial Officer Dennis Stillman reviewed with the committee Tuesday evening was the hospital’s accounts receivable and its “aging.”

The hospital has $10 million in money owed to them from patients or other entities for patients discharged 151 days or more.

Of that owed revenue, $6.7 million is from patients who’s remaining balance is self-pay. Stillman said $2.5 million of that is tied up in a payment arrangement — typically $50 per month. Stillman said there is no policy that actually allows for that, more of a practice that has been going on for at least a few years.

“We have some accounts where patients came in under other payment arrangements and converted from an insurance plan,” he said. “Some of those we may not ever collect on. Some may qualify for charity care.”

The other “aging” accounts payable categories are from Medicaid ($425,000), Medicare ($962,000), SEARHC (SouthEast Alaska Regional Health Consortium) ($1 million), the state of Alaska ($336,000) and commercial balances ($632,000).

Stillman said he will bring back any policy the hospital does have on record for payment arrangements, along with recommendations to get that $10 million lump down to a more reasonable proportion. He explained the other categories as having a reasonable expectation of getting paid, even if the others do pay late. The only other category that may be difficult to get payment from is commercial, where typically cruise ship employees and passengers (and their insurance companies) either don’t pay or are very slow to pay at this point in the billing cycle. Stillman is going to look into what kinds of treatment are being sought for these cases. He isn’t sure if they are mostly emergency cases, which the hospital treats regardless, or if there is situation where the hospital may have to ask people to pay first before receiving services.

Stillman said some of the balance designated as owed by SEARHC may also never come.

“When we have patients treated for alcohol, that is not a covered payment for SEARHC,” Stillman explained. “It should have dropped into self-pay. If they are chemically dependent and on SEARHC, the odds of us collecting money are not great. We should have known that early on because it’s not a covered service.”

Board member Linda Thomas said the information was helpful because it’s useful in understanding why the hospital has had to write off so much bad debt in the past two years.

Stillman said one part of that problem is the rotation of employees in those departments. He said there is a new accounts manager he believes is diligently working to help solve the issue.

Stillman also talked assumptions for the next year and preliminary budget outlooks. He is projecting flat admissions numbers for emergency room visits, surgeries and other services. Stillman said that ER visits and surgeries are the driving force behind activity at the hospital, because those lead to use of ancillary services.

He is projecting ER admissions of 1,350 ­— back down to the numbers the hospital saw in 2009-10. Stillman said last year there were 1,475 ER visits. This year the hospital had projected a high end of 1,500 range of visits, which have not come.

“ER visits have been very flat,” he said. “My guess is we’ll probably be higher than this.”

Both in-patient and out-patient surgeries have also dropped by several hundred since 2009-10.

Stillman said he has received preliminary budget proposals from all of the departments. He has yet to go through them and remove duplications, as well as add in things department leaders may have forgotten. Stillman said if everything were approved, they would be looking at a $3 million deficit, however he said that is not how it will end.

Stillman expects labor costs to be up 3-4 percent, an increase in benefit prices and a 5-6 percent increase in pharmaceutical costs. He anticipates an overall 4 percent increase in inflationary costs.

“What we’re doing now is going through the budgets with the managers,” he said. “There are going to be some mistakes in there. ... It’s not a surprise where we are. I would be surprised if we were at break even right now. I would assume we’re missing something. Working on this next month, say OK, what can we clean up in submittals.”

Thomas asked to look into the effect of rate increases, expanding revenue sources and also taking a closer look at philanthropy.

Thomas also asked for investigation into a rumor.

“It is my understanding is insurance companies are changing, they’re actually advising people to go to different locations potentially for service, which may be impacting the reason why our visits have dropped and (patients are) going Outside for assistance,” she said. “It’s less expensive, supposedly, in areas where there is more access and more competition and more availability for services.”

Dr. Alex Malter said there are people who are going “down south” for medical care, but he didn’t know what the margins were.

Thomas said that also is a concern, because that kind of behavior could put Bartlett at risk in the long run.

“You can’t have your cake and eat it too, if you want to have a hospital for us here in Juneau and for emergencies,” she said. “For us as a board we need to decide what services we need to provide here.”

Thomas also asked for the hospital administration to get information on what other hospitals in Alaska and Southeast are experiencing. Thomas said she believes Sitka is struggling, but would like more information.

The committee expects to delve deeper into the admissions decline in March.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.

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