HCHC splitting with Board of Health over financial difficulties

By Grace King, Mt. Pleasant News


Henry County Health Center is seeking to end its contractual agreement with the Henry County Board of Health because of financial challenges the hospital has faced this fiscal year.

Although Henry County Health Center (HCHC) will be ending the 30-year collaboration with the Board of Health, HCHC Chief Executive Officer Robb Gardner said that this split will not impact the services the Board of Health provides.

?Through this transition, we can continue to provide outstanding services to the county,? Gardner said during an HCHC board of trustees meeting on Tuesday, Oct. 17. ?It?s a service (HCHC) does not get directly reimbursed for. We have to step down those costs. We hope it can be a win-win.?

Through the contract, HCHC has been responsible for the provision of services and employees for the Board of Health.

The physical location of the Board of Health will remain the same, located on HCHC?s campus. Gardner said that the transition of services and employees back to the jurisdiction of the Board of Health will not change the public health priorities or programs. They will continue working toward the physical, mental and social well-being of the community. Their services will continue on state and federal funded grants.

Gardner recognized Board of Health director Patti Sallee for her nine months work with the Board of Health. ?I want to say thanks to Sallee as this transition would go back to the county. With her leadership, there won?t be a change in public health services provided,? Gardner said.

The Board of Health offers immunization programs, homemaker and maternal-child programs, disease surveillance and emergency preparedness.

Gardner will be discussing this transition with the Board of Health during their meeting on Tuesday, Oct. 24. The Board of Health will remain under HCHC jurisdiction until the next fiscal year, July 2018.

The decision to no longer oversee the Board of Health was largely financial for HCHC. HCHC Chief Financial Officer Dave Muhs led a financial discussion during the board of trustees meeting, saying that there has been lower inpatient care and lower patient procedures in every area during the first quarter of the financial year, which started July 2017.

?We have some challenges going forward,? Muhs said. ?July started off bad, August recooperated a little, September was really bad.?

The major contributing factor to HCHC?s financial problems is the transition of the Medicaid program that happened on April 1, 2016, Muhs said. Data collected by HCHC has determined that based off the 2017 fiscal year numbers, they were reimbursed $992,280 less than they would have received with the former method of payment. This breakdown includes $537,000 less in cost reimbursement, which means HCHC was paid less by insurance providers than the cost of their services they provided.

The low reimbursement from insurance companies is because most patients at HCHC have Medicare coverage, there is less BlueCross than in previous years and commercial insurance is almost nonexistent, Muhs said.

Gardner began the financial year in July with a 10 percent budget cut for every department. During the board of trustees meeting, Gardner said that the 10 percent cut adds up to $3.5 million, which is what the hospital is looking at as their operating cost if they continue losing revenue.

?I?m glad I estimated that correctly,? Gardner said.

One of the hospital?s biggest hits financially is the only $120 reimbursement per ambulance ride.

?Every hospital is going through this,? Gardner said. ?We have our work cut out for us. Our administration team is taking this very seriously. Our leadership team is looking at things, and we?re having some tough choices going forward. If the Federal government can?t decide what it wants to do, the uncertainty is going to continue. That we?re certain of.?

These financial difficulties are juxtaposed with an IHA Financial Indicator Report, which compares critical access hospitals in the state of Iowa. The report showcased HCHC?s performance compared to their peers during the 2015 fiscal year. HCHC was slightly above average in most categories.

The next board of trustees meeting will be Tuesday, Nov. 14.