Viewpoints by Virgil Boss, CEO of Teton Valley Health Care

January 2012 Viewpoint - Safeguarding the Health of Our Community

Fire-Based Ambulance Service vs Hospital-Based Ambulance Service 

The recent public statements by our County Fire Department endorsing an action to eliminate the currently operating Teton Valley Ambulance Service District were shocking to many of us. 

Several years ago, residents voted to support a hospital-based ambulance service.  Since that time, tax support has built an effective and experienced team of paramedics and EMTs who have worked closely with physicians and midlevel providers during pre-hospital and ER care.  We’ve also implemented a patient transport service that has been professionally staffed, with appropriate State of Idaho pharmaceutical licensure for medication that might be required during transport to other facilities.  Teton Valley Ambulance earned the highest certification possible for pre-hospital care by receiving Advanced Life Support designation by our state.

The rallying point for breaking a contractual agreement that allows Teton County Ambulance to provide this service until 2013 is based upon statements by our Fire Department that they can save hundreds of thousands of dollars in tax funding.  Yet, our community has not seen budget numbers that can be adequately substantiated.  Until our entire community is invited to the table and can be assured that budget savings can be validated by an actual staffing plan that shows adequate capacity for greatly increased services, this argument should be set aside.

Teton Valley Health Care will not engage in divisive, politically-charged arguments to retain Teton Valley Ambulance.  We will, however, work to ensure that optimal patient care is the ultimate reason for any changes to the current structure of community emergency medical services.  At this point, too many questions remain unanswered by our Fire Department.  Details must be given about a plan for patient transport.  Answers must satisfy doubts about overall responders’ experience, communication during an emergency, capacity to cover multiple-occurring events (fire plus human injury plus a need to transport to another facility) and responsibility for billing, employee benefits and adequate volunteer management.  Simple responses from our Fire Chief stating that these problems are non-issues should not be acceptable answers for our community, nor should canned research from our Fire Department’s national union headquarters provide the basis for our rural community to make swift changes to the most crucial service offered by our County.

It’s our mission to promote the health of our community.  We are not opposed to improving the method by which pre-hospital and ER care is administered.  We support thoughtful, fact-based discussion, collaboration, and adequate time to ensure that in the end, our community truly benefits from any changes. ******

December 2011 Viewpoint - Reinvesting in our Community

From the halls of Congress to the local coffee shop, there’s been a lot of discussion about tax dollars: how they’re collected, spent and accounted for.  While it’s obvious that we don’t all agree on these tax topics, it seems to me that everyone wants to realize a return on our tax investment that’s personally meaningful.

In May 2010, voters in our County approved a second two-year supplemental tax levy to support Teton Valley Hospital.  The levy funds are designated toward capital improvements only, and may not be used for debt relief. 

Here’s a breakdown outlining how TVH has spent our tax dollars after the first year of levy funding totaling approximately $1M:

• Facility improvements and renovations totaled $288,322.91. These purchases included remodeling for the new digital mammography, ultrasound, echo-cardio, and CT Scan suites; replacement of the air conditioning system in our OR; and energy improvement projects including solar panel installation and window replacements.
• Essential upgrades for our healthcare information technology totaled $63,437.40.
• Installation of new technologically-current diagnostic equipment totaled $634,515.40, with the digital mammography unit purchased for $327,568.80 and the 16-slice CT Scan purchased for $306,946.60.

So far, the grand total comes to $986,275.71.

We were fortunate to receive grant funding to replace our aging facility boiler, acquire state-of-the-art lab equipment, and to help defray costs for the energy efficiency improvements. (It’s interesting to note that our organization has benefited from a reduction in energy costs of almost 14% over last year’s utilities costs, all due to infrastructure renovations.) In fact, grant awards topped $103,000 for our past fiscal year, making it possible to reserve more cash for future sustainability.

It’s my hope that we can all find something personally meaningful in the expenditure of levy funds to support our County hospital.  Enhanced diagnostics will save lives.  Energy efficiency lowers costs and improves our environment.  New information technology makes it easier and faster to share medical records, improve billing accuracy, and maintain federal requirements toward patient quality outcomes.

Teton Valley Health Care recently received the results of an independent economic impact analysis.  While the report is currently in draft form, the consulting firm concluded that “Teton Valley Health Care plays a vital role in the infrastructure of Teton County…”  Based on this study, TVHC contributed $11,034,975 back into the local economy in FY2011.  Included in this figure, it was shown that $710,000 was paid directly to local businesses by TVHC. 

If you’re looking for a tangible return on investment, a return of over $11M on a $1M outlay is pretty darned good. 

You can find the complete Economic Impact Study by following this link:  IMPACT STUDY 2011. 

From everyone at Teton Valley Health Care, we wish you a Merry Christmas and a healthy New Year.

October 2011 Viewpoint - The Bottom Line

If you read the newspaper, visit our website, attend public meetings, or have a friend or family member who works at TVHC, you’ve heard the most recent news about operational changes at Teton Valley Health Care.  The Conversion Plan is comprised of several significant components, all designed to build a self-sustaining community hospital. 

Over the past three years, it’s become clear that the fiscal health of our local hospital is tightly connected to the fiscal health of Teton County, Idaho.  Because of TVHC’s impact on our economy and personal health, it’s imperative that our organization is built to respond to changes in the economic climate and anticipate challenges related to upcoming national healthcare reform mandates.

Our Board of County Commissioners voted unanimously October 11^th to allow hospital leadership to pursue the Conversion Plan.  Under the terms of our proposal to the County, we’re not asking to sell county assets, we plan to maintain local control, and we’re endeavoring to form an affiliation with Bingham Memorial Hospital.

There are three steps toward the completion of the Conversion Plan.  First, we must create a new legal entity to apply to the IRS for private, nonprofit status.  Second, a 99-year operating lease will be created between TVHC and Teton County.  Finally, we plan to complete a Hospital Management & Health Services Agreement between TVHC and Bingham Memorial Hospital.  Of course, a mountain of work and due diligence will have to occur to complete each step to the satisfaction of all the collaborators.  The overarching objective is to show a sustainable positive benefit for our community.

The timeline for accomplishing all steps runs from 6 to 14 months with December 2012 as a “not to exceed” deadline date.  We will share updates with the public as we achieve deadlines and formalize agreements.

Quality of care will continue to be our top priority.  It’s our mission to offer excellence in every aspect of our delivery of care. In order to fulfill one of the key aspects of a nonprofit hospital, we have to ensure that the business end – the bottom line – is sustainable. 

What is that key aspect?  Anyone who enters our doors in an emergency situation is guaranteed top quality care, regardless of their ability to pay, regardless of citizenship, race, etc.  It would be very difficult to find a business that must successfully fulfill that key mandate while maintaining healthy cash reserves.  We believe that we have begun to make the changes necessary to accomplish that goal.

Your questions and comments are always welcome.  Please contact me at (208) 354-6317 ext. 153 or vboss@tvhcare.org

August 2011 Viewpoint - Making Progress in 2011

As we approach the end of our fiscal year at TVHC, I can see some similarities to how many of us feel on the brink of a new calendar year; what did we accomplish, how can we improve, and what plans should we make for the New Year? 

Fiscal year 2011 will close chronologically at midnight September 30, 2011. This has been a year of great importance; a year that could signify a turn-around for a hospital that was preparing for closure just three years ago.  At the start of the year October 1^st, 2010, our Hospital Board of Trustees set three essential performance benchmarks that TVHC had to reach by the end of fiscal year.  These three measurements were determined to be the trifecta that would signal a true recovery, or alert everyone to continued poor performance that would necessitate significant operational changes.

Let’s start with number three: Net Days in Accounts Receivable.  Our goal is to have 65 Days in AR (lower is better.)  The industry standard is 60.  At the beginning of 2011, TVHC showed 84 days which means we were waiting an average of 84 days to be paid for services.  Today, we’re at 71 days and moving lower. 

Number two:  Days in Cash.  Over the past year, we’ve talked a lot about Days in Cash in our news articles and public meetings.  This figure represents how much cash is unrestricted and in reserve in the event of an emergency.  Personal financial advisors often tell their clients that they should have at least three months of living expenses put aside in the event of a personal emergency.  Hospitals strive to save at least 90 Days in Cash.  The ability to secure ample Days in Cash generally shows that the organization is financially sound and on the path to sustainability. At the end of the first quarter of 2011, TVHC had almost 19 Days in Cash compared to 56 today.  Our year-end goal is 59.  Please note that these cash reserves reflect operating revenue and do not include tax levy funds. 

Number three:  Net Operating Margin.  Our target is .5% compared to -5.4% in 2010.  Our current Year to Date is 1.2%. The Critical Access Hospitals of the far west average 1.5% Net Operating Margin.  Again, this figure is based on operational revenue, not tax levy funds, Foundation donations or interest income.

In other words, TVHC is showing every sign of a successful operational turn-around.  However, I doubt that there will ever be a time when any Critical Access Hospital is safe from financial crisis.  Sustainability rests on various factors that are out of our control including utilization, governmental changes in health care, acts of nature, and the general economy.   Recent studies have also shown that the increase in charitable care across our nation is resulting in closures of hospital facilities that have stood for decades.  Private philanthropy and grant applications will continue to be very important to our organization. 

Given the many risks associated with stand-alone County hospitals, leadership has decided to officially open a dialogue with the administrative team at Bingham Memorial Hospital to determine if an alliance would help place both facilities on firmer ground with less reliance on Teton County tax support.  Thursday August 11^th, The Board of County Commissioners voted unanimously to endorse a Letter of Intent between TVHC and BMH to begin the discussion.  As always, the objective of our BOCC and hospital leaders will be the continual enhancement and sustainability of our community hospital.  

Please feel free to contact me with your questions or concerns at (208) 354-6317 ext. 153 or vboss@tvhcare.org

May 2011 Viewpoint - Where's the Beef?

For people of a certain age, the headline statement will take you right back to a wildly popular television commercial from the 80’s.  (By the way, if you immediately made that historical connection, it may be time for a colonoscopy).  TVHC has undertaken many internal improvements in order to hardwire accuracy and efficiency into the business side of our organization.  Not all of these improvements have been easily visible for our community.  In this column, in our public board meetings, and on our website, we’ve talked about ongoing operational projects.  Now it’s time for solid results. 

In order to improve the accuracy of our revenue cycle process and provide patient-friendly bills, we’ve entered into an agreement with American Accounts Receivable Management (AARM), an outside medical billing organization.  AARM will handle our current and past-due self-pay patient accounts from Teton Valley Hospital and Driggs and Victor Health Clinics.  Bills will be reformatted to clearly summarize services rendered. We anticipate handing over this portion of our billing by early May.  

We’ve also restructured the day-to-day duties of our billing representatives to ensure that credit balances, insurance claim denials, and patients’ concerns are handled timely.

Newly installed software plus consistent training have greatly improved our ability to collect, share and measure data.  In the past, one of our greatest challenges was a lack of compatible software programs and training.  Now, coding and account reconciliations can be completed much faster and with a higher level of accuracy.

In the upcoming weeks, some patients may receive a credit refund from TVHC.  For over a month, our revenue cycle team has been performing a thorough review of patient accounts, combining and reconciling open accounts throughout the Teton Valley Health Care family: our hospital and both health clinics.  Any credits outstanding are being refunded in May.  It’s our objective to begin the month of June with fully updated accounts. 

We’ve made measurable progress and that’s good news for all of us.  We know that you count on TVHC to have highly-skilled, compassionate staff available 24/7.  It’s our mission to promote the health of our community for many generations to come.

If you have a particular concern that I haven’t addressed, please feel free to ask “Where’s the beef, Virgil?” via vboss@tvhcare.org or (208) 354-6317 ext. 156. 

March 2011 Viewpoint - AUDIT is a Five Letter Word

It has two syllables and five letters. Just mentioning this word has been known to cause shivers down the spine.  It’s an audit, and Teton Valley Health Care has just received the results of its 2010 fiscal year report by independent auditors Dingus, Zarecor & Associates. I’ll review the main points of the audit in this article; however, the entire document is available online at our website at www.tvhcare.org. 

Overall, TVHC showed steady, positive progress throughout a battery of fiscal indicators.  The auditors commended us for showing much needed improvements in targeted areas and cautioned us to maintain our trend toward lower operating costs.  We must also continue to refine policy and procedures to ensure compliance with all federal health regulations.

Please keep in mind that our fiscal year started October 2009 and ended September 30, 2010.

First, let’s tackle the Operating Margin which is a ratio that reflects profits only from operations.  In FY2008, the ratio was negative 16.5% that improved to 1.1% in FY2009 and dropped in FY2010 to negative 5.4% showing a total improvement of 11.1% from 2008.  The primary reason for the drop in 2010 was due to the re-opening of the Victor Health Clinic which took over $500,000 in unbudgeted funding.  Our Operating Margin goal is to reach a positive .6% by the end of FY2011.

Next up:  Current Ratio.  This is the most widely used measure of liquidity.  In 2008, we were at 1.0 and by the end of 2010, we reached 2.6.  (The average ratio of all Idaho hospitals in 2009 was 2.7). 

How about long-term debt?  If you recall, our debt burden was enormous several years ago, measuring 39.5% debt to net assets in 2008.  In 2010, we improved that figure to 19%, due primarily to tax levy funding.

We ended 2010 with an upward tip in Net Patient Accounts Receivable compared to 2009 (83.8 vs. 81.9).  As of today, we are showing 78 Days in Accounts Receivable. Lower is better. 

Since January 2010, TVHC has undergone three financial audits by outside entities.  These audits would include the recently completed 2010 audit, Teton Valley Health Care’s last fiscal year 2009 which included a review of 2008, and the KPMG forensic audit.

Hospital leadership volunteered to undergo the KPMG analysis to assure our community and ourselves that we’re focusing a microscope on every possible area of our financial management.   This particular audit took five months of time, effort and expense to complete.  We gained insight into potential problems and were given recommendations for improvement.  Of course, I’ve been asked why we haven’t publically released the KPMG audit. After review by our hospital attorney, it was determined that some of the information should remain confidential to abide by applicable Idaho Public Record laws. The statutes made clear that where a record “contains information regarding personnel information exempt under Idaho Law, or is compiled at the direction of the agency’s attorney in anticipation of litigation, the entire record may be exempt from disclosure.” 

We have been audited and re-audited, and then we ordered an additional audit! We’re answerable to our community, federal regulators, and ourselves in terms of how we manage our County hospital and rural health clinics.  Quality of care, fairness, and accuracy cannot be exclusive of each other and while it’s certainly necessary for TVHC to build a sustainable cash position, cash will always be secondary to the delivery of compassionate, quality healthcare. 

If you decide to take the time to read our audit reports at www.tvhcare.org and you find something you don’t understand, you are welcome to call me or our Financial Controller Jason Hotchkiss, C.P.A. at 354-6317 ext. 153.  As you check out the audit, I encourage you to take the time to review our Patient Satisfaction Survey scores, too.  Great care plus good numbers equals a promising future for all of us.

Share your experiences and suggestions with me. Together, we can build an environment of healthcare that reflects the needs of our community:  vboss@tvhcare.org