Veterans Memorial Hospital posts positive financial January, stays focused on impact of changes in managed care and payment models

by Brianne Eilers

Following a few months of losses, Veterans Memorial Hospital (VMH) in Waukon ended the month of January on a positive financial note, showing a net income of $78,679. VMH Administrator Mike Myers noted that skilled days and outpatient services were both strong for the month of January, contributing to the net income. He further stated that acute days, deliveries and surgeries were down in January.
"Our expenses were 0.2 percent under budget so we are managing our expenses," Myers said, explaining that it is the revenue side that is impacting the bottom line. The number of days in accounts receivable is at 84.2, compared to 102.3 last year. VMH also has about $2.2 million in cash reserves, compared to $1.6 million last year.
Myers also noted that Medicaid Managed Care has moved forward in the state of Iowa, and is now scheduled to begin in April. Myers noted that representatives from the Kansas Hospital Association spoke at an Iowa Hospital Association meeting regarding Medicaid Managed Care. "They spoke on the problems that they've had with the managed care, and (the problems) were pretty impressive and phenomenal," Myers said. VMH will be contracting with all three of the companies involved in the managed care.
In other matters, there has been a small remodeling project done in the hospital's OB department, with a kitchenette being installed. Myers recently attended a rural healthcare conference in Phoenix, AZ. At the conference, Medicare payment models were examined. Myers noted that while Critical Access is important to small hospitals, many of the speakers seemed to indicate that payment models will be moving away from that and VMH will be looking ahead to see where healthcare payment is going and how to prepare for changes.
"You can't stay the same and expect to survive in the ever-changing landscape of rural healthcare," Myers said. He added that VMH will have to determine what the hospital wants to look like going forward, as well as looking into the services it provides. The focus will be looking at what's working and what's not, as well as how to expand and what kinds of services the hospital might like to bring to patients. VMH does not receive tax money, unlike many of its peers, which puts them at a slight disadvantage by limiting the hospital in terms of what it can do.
VMH signed a network agreement with Gundersen Health System. "We are looking forward to working with them," he said. "It looks like they will be involved with QA, credentialing, peer review." Myers also said Gundersen will be helpful in making sure VMH is in compliance with CMS (Centers for Medicare and Medicaid Services) regulations.
On the AthenaHealth front, Myers said the hospital is on track and AthenaHealth is continuing to add more people, and VMH is looking to start utilizing those services possibly as early as April.
The Finance Committee met and put together an operating budget for the coming year. Myers explained that in the past, the hospital has always used an average taken from the previous three years, however, the patient volume has shifted drastically in the past two years from inpatient to outpatient. Myers noted that they have had to change their methodology for figuring the budget, because if they kept using the three-year average, it would artificially skew what they should expect for a budget.
Myers said that for the next year, they are budgeting a 1.1% profit margin, until the hospital knows what to expect from the Medicaid Managed Care and how payment will work out under those regulations. Myers noted that they have heard many stories from hospitals in other states where Medicaid Managed Care is already in place regarding delays in payment and denials of service, and sometimes Medicaid patients can make up to 10% of the hospital's business.
Myers also noted that VMH has set a resolution for the patient loan program. The loan program has been in place for a while, and patients can take out a loan to pay off medical expenses. The bank that VMH has been using, located out west, was sold so VMH had to make a new resolution.
Myers also noted that VMH has reviewed its employee turnover report, and VMH continues to have a lower turnover rate than the state average. "We do expect to see that creep up with retirements, as we get more and more people retiring. But, overall, we're still pretty steady," Myers said.

 

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