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Community Presentation December 21, 2009

Community Presentation December 21, 2009. Do we want a county hospital, or a hospital in the county?. Brief History of past 5 years Impact of changes in the reimbursement environment since 2004 Loss of revenues beyond CMH’s control: Reduction in Medicaid reimbursement -$1.8M

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Community Presentation December 21, 2009

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  1. Community Presentation December 21, 2009

  2. Do we want a county hospital, or a hospital in the county?

  3. Brief History of past 5 years • Impact of changes in the reimbursement environment since 2004 • Loss of revenues beyond CMH’s control: • Reduction in Medicaid reimbursement -$1.8M • Charity Care/Bad Debt -$5.0M • Air park -$7.5M • Loss of Orthopedic surgeon -$3.0M • Reduction in outpatient imaging -$2.8M

  4. Brief History of past 5 years • Changes to Expenses: • Reduced overhead by $8.8M in 2007-2008 • Identified another $3.9M in 2009 • Reviewed non-core services that had $50K loss through June 2009

  5. Why pursue affiliation? • Current situation: • Erosion of market share over past 10 years • e.g., 53% of market share (from 63% in 2004) • Diminishing reimbursement environment • Changing payor mix (more Medicare/Medicaid, self pay…) • Medical Staff retention/recruitment • Recruitment costs, $300-$500K per physician • Capital improvements under-funded

  6. Capital Expenditures - Capital improvements • under-funded due to operating losses • Year Actual Target • 2008 $2.0M $4.2 - $6.3M • $1.3M $4.2 - $6.3M • Total $3.3M $8.4 - $12.6M

  7. Changing Payor Mix

  8. Why pursue affiliation? • Benefits to be gained: • Ability to retain and recruit physicians • Access to capital funds • Less susceptible to individual negative events (Airpark) • Financial safety net • Access to expertise, resources, best practice • Improved third party payor contracting • Pursuing growth will ensure Employees of continued employment and creation of new positions

  9. RFP Process/Organizational Chart (Oct. 2008) Medical Staff Advisory Group Keith Holten, M.D. Mary Lou Inwood, M.D. Stella Ling, M.D. Tom Matrka, M.D. John Mehnert, D.P.M. Ron Pedalino, D.O. Tommy Tigar, M.D. Clinton County Commissioners (final approval) CMH Board of Trustees Operations Team Becky Allen, Amy Donaldson, Dana Dunn, Kathy Dye, Mary Ann Foland, Dennis Gambill, Judi Henson, Cindy Holland, Laura Martin, Kyle Parker, Andy Riddell, Ron Bachman • Ad Hoc Affiliation Committee • Randy Riley, Commissioner • Hon. G. Allen Gano • Tom Neville, M.D. Board of Trustee Chairman • Bob Wagenseller, CMH Trustee • Marcy Hawley, CMH Trustee • Ed Kuehn, CMH Trustee • Mike Choo, M.D., Chief of Medical Staff • Jennifer Bain, M.D., Chief of Medicine • Rajiv Patel, M.D., Chief of Surgery • Ronald Pedalino, D.O., Med. Staff At-Large • Bill Peelle, County Prosecutor • David Raizk, Mayor • Andy Riddell, Ron Bachman, Laura Martin Employee Advisory Group Alyssa Alden; Shelley Brooks; Danielle Brown; Lori Chaney; Cynthia Chester; Youvona Clemens; Beth Ellis; Daniel Hapner; Libby Higginbotham; Gene Hook; Angel Hughes; Debbie Johnson; Dustin Lewis; Pam Merritt; Paul Miller; Elaine New; Mandy Platt, Amanda Powell; Michelle Roth; Cathy Terrigno; Kathy Trisel; Jason Vaughan; Tammy Warnock; Joy Weng; Sandra Whited Community Advisory Group Ed Kuehn, Chair/Affiliation Committee Liaison Craig Beam, Brian Bourgraf, Rachel Boyd, Art Brooks, John Chambers, Jeff Copsey, Dan DiBiasio, Karen Haley, Stan Hannah, Deborah Hess, Chad Hollon, Bob Johnson, Charlyn Kruszka, Tony Lamke, Rod Lane, Leilani Popp, Jack Powell, Betty Rice, Ron Rudduck, Christian Schock, Phil Snow and Richard Thompson

  10. RFP Process/Organizational Chart (Oct. 2008) • Ad Hoc Affiliation Committee • Randy Riley, Commissioner • Hon. G. Allen Gano • Tom Neville, M.D. Board of Trustee Chairman • Bob Wagenseller, CMH Trustee • Marcy Hawley, CMH Trustee • Ed Kuehn, CMH Trustee • Mike Choo, M.D., Chief of Medical Staff • Jennifer Bain, M.D., Chief of Medicine • Rajiv Patel, M.D., Chief of Surgery • Ronald Pedalino, D.O., Med. Staff At-Large • Bill Peelle, County Prosecutor • David Raizk, Mayor • Andy Riddell, Ron Bachman, Laura Martin

  11. RFP Process/Organizational Chart (Oct. 2008) Community Advisory Group Ed Kuehn, Chair/Affiliation Committee Liaison Craig Beam Brian Bourgraf Rachel Boyd Art Brooks John Chambers Jeff Copsey Dan DiBiasio Karen Haley Stan Hannah Deborah Hess Chad Hollon Bob Johnson, Charlyn Kruszka Tony Lamke Rod Lane Leilani Popp Jack Powell Betty Rice Ron Rudduck Christian Schock Phil Snow Richard Thompson

  12. Medical Staff Advisory Group Keith Holten, M.D. Mary Lou Inwood, M.D. Stella Ling, M.D. Tom Matrka, M.D. John Mehnert, D.P.M. Ron Pedalino, D.O. Tommy Tigar, M.D. Operations Team Becky Allen, Amy Donaldson, Dana Dunn, Kathy Dye, Mary Ann Foland, Dennis Gambill, Judi Henson, Cindy Holland, Laura Martin, Kyle Parker, Andy Riddell, Ron Bachman

  13. RFP Process/Organizational Chart (Oct. 2008) Employee Advisory Group Alyssa Alden Shelley Brooks Danielle Brown Lori Chaney Cynthia Chester Youvona Clemens Beth Ellis Daniel Hapner Gene Hook Angel Hughes Debbie Johnson Dustin Lewis Pam Merritt Paul Miller Elaine New Mandy Platt Amanda Powell Michelle Roth Cathy Terrigno Kathy Trisel Jason Vaughan Tammy Warnock Joy Weng Sandra Whited

  14. What options have been discussed? • Essentially, the Ad Hoc Affiliation Committee, Executive Council, Board and Commissioners have explored: • Asset purchase (Acquisition) which would require a public competitive bidding process, ultimately resulting in the sale of the county hospital. The new hospital would be a for profit or non-profit corporation. • Conversion of the Hospital from a county hospital to a tax-exempt 501(c)(3) non-profit Ohio corporation; and the new non-profit corporation affiliating with another non-profit healthcare system (focus of 12/2008 RFP) • CMH would remain independent; however, it would still convert from a county hospital to a non-profit tax-exempt 501(c)(3) Ohio corporation - Taken off the table after Board representatives’ meeting with County Commissioners on 12/14.

  15. Parties currently involved in affiliation discussions • TriHealth – non-profit 501(c)(3) organization • LifePoint Hospitals/The Christ Hospital • LifePoint Hospitals is a for-profit organization • The Christ Hospital is a non-profit organization • RegionalCare Hospital Partners – For-profit organization

  16. Medical Staff involvement and participation: • 2008 • Feb. 5 – Letter form Chairman of Board to Medical Staff, Commissioners, Judges and Operations Team • Feb. 7 – Letter from Chief of Staff to Medical Staff • Feb. 14 – Reminder letter to Medical Staff re: participation in completing questionnaire

  17. Medical Staff involvement and participation: • 2008 • March 13 – AdHoc Clinical Strategy Team (AST) Presentations • March 27 - AST Presentations • April 3 - AST Presentations • April 9 – AST Presentations • April 15 - AST Presentations • April 29 - AST Presentations • May 22 – AST presents their presentations • Oct. 6, 13, 20, 27, Nov. 3 & 12 –Medical Advisory Group meetings

  18. Medical Staff involvement and participation: • 2009 • Medical Staff off-site meetings with bidders – • July 14 – TriHealth • Oct. 13 – LifePoint/The Christ Hospital • Nov. 18 – RegionalCare Hospital Partners

  19. CMH Affiliation Meeting Presentations to Public Clinton County Democratic Leadership Committee November 17 Wilmington Friendly Center Attendance: Approximately 25 Wilmington Kiwanis Club November 19 Wilmington Presbyterian Church Attendance: Approximately 50 Clinton County Republican Central Committee November 23 Cape May Retirement Village Community Room Attendance: Approximately 60

  20. CMH Affiliation Meeting Presentations to Public Clinton County Family and Children First Council November 24 Clinton County Annex Attendance: Approximately 30 State, Regional, County, City, Village, Township Elected Officials November 30 CMH Conference Center Attendance: Approximately 40 Network Alliance December 3 Hampton Inn Attendance: Approximately 50 Wilmington Noon Rotary Club December 7 Damon’s Restaurant Community Room Attendance: Approximately 50

  21. CMH Affiliation Meeting Presentations to Public CMH Medical Staff December 8 CMH Conference Center Attendance: Approximately 40 Employee Advisory Group, Community Advisory Group, CMH Foundation Board December 10 CMH Conference Center Attendance: Approximately 30 Wilmington AM Rotary Club December 11 Wilmington Assembly of God Attendance: Approximately 15 CMH Foundation Auxiliary and Volunteers December 11 CMH Conference Center Attendance: Approximately 45

  22. CMH Affiliation Meeting Presentations to Public: In total we have had approximately 11 public presentations with more than 440 attendees.

  23. Timeline - 2008 When did the process begin? • Early 2008 - Affiliation exploration began based on recommendations from AdHoc Clinical Strategy Team (AST) • Mid 2008 - AST Recommendation to the Board to pursue affiliation. Committees formed: • Employee Advisory Group • Community Advisory Group • AdHoc Affiliation Group • Medical Staff Advisory Group • December 2008 - RFP sent out to interested parties: • Ohio Health, Community Health Partners, Kettering Health Network, Premier Health Systems, The Christ Hospital, TriHealth • RFP contemplated option #2 – long term lease with nonprofit

  24. Timeline (continued) 2009 • Jan. 2009 - Proposals from: • TriHealth • The Christ Hospital • Kettering Health Partners • Feb. 2009 • Feb. 9 and 11 visits to TriHealth and The Christ Hospital by Employee Advisory Group and Community Advisory Group. • Feb. 19 TriHealth presented at Murphy Theatre to public. • Kettering and Christ withdrew proposals. • Early 2009 • LifePoint/The Christ Hospital entered into process • March - November 2009 • Meetings, due diligence, site visits, etc. • Near the end, asset purchase structure entered discussions & analysis

  25. Timeline (continued) 2009 • November 2009 - • Nov. 2-6 visits to LifePoint-owned hospitals: Somerset, Georgetown, Maysville, Kentucky and Conyers, Georgia. • Nov. 30, Final and best offers from interested parties. • December 3, 2009 - Three bidder presentations to AdHoc Committee, Commissioners, Board, Executive Council and Medical Executive Committee. • December 10, 2009 - Meeting: Community Advisory Group, Employee Advisory Group and Foundation Board

  26. Timeline (continue) 2009 • December 14, 2009 - Met with commissioners to recommend option 3 (remain independent) be taken off the table. • “Can You Remain Independent?” • Market Share • Financial Performance • Dedicated Growing Medical Staff • Non Physician Recruitment and Retention • Strong Community Support • Seasoned Management Team * Other meetings and community presentations occurring within this timeframe. (i.e. Medical Staff meeting on 12/7)

  27. RFP Scenario Analysis Clinton Memorial Hospital Legend: 0=’s doesn’t register; 1=’s Fair; 2=’s Average; 3=’s Good; 4=’s Excellent Request for Proposal Analysis Each bidder was ranked from 1(fair) to 4 (excellent) in each of the following categories. (0 points given if didn’t register) Medical Staff Retention Recruitment Alignment/Decrease Outmigration Employment Joint Venture Seamless Transfers Voluntary Tertiary Referrals Managed Care Contracting Information Technology Honor Existing Contracts Leadership Development Growth Service Line Expansion Access to Capital E-ICU Maintaining Full Service Hospital Capital Spending Work Life Continuity for Employees Continuity of Middle Management Continuity of Executives

  28. Request for Proposal Analysis Each bidder was ranked from 1(fair) to 4 (excellent) in each of the following categories. (0 points given if didn’t register) Financial Long Term Debt Refinancing Managed Care Contracting Group Purchasing Information Technology Operating Margin Tax Paying Governance/Quality/Resources Maintaining CMH Identity Local Control/Influence (Governance Structure) Peer Group Networking Leadership Development Executive Recruitment Community Benefit Programs Culture Fit Quality Improvement Resources/Process * Other meetings and community presentations occurring within this timeframe. (i.e. Medical Staff meeting on 12/7)

  29. Hospital Executive Council 12/16 Recommendation to the Board of Trustees: • After review and analysis of the three proposals, recommend initiation of the county competitive bidding process to pursue county sale of the Hospital through an asset purchase • Competitive bidding process will best serve Clinton County and surrounding service areas to achieve all of the stated objectives, most significantly: • Short and long-term financial stability of CMH • Medical and Employee Staff retention and recruitment • Assurances to retain and grow full hospital inpatient and outpatient services in Clinton County

  30. Board of Trustees 12/16 Recommendations to the County Commissioners: Initiate the county competitive bidding process for the sale of assets and operations of CMH; Collaborate with County Commissioners on the development of a joint request for proposal (RFP) under county competitive bidding statute; joint working meeting to finalize RFP on or before December 30, 2009; RFP to be issued jointly by the Board and County Commissioners, with ability for either to reject any and all bids; Upon analysis of RFP responses, Hospital to provide recommendation with ultimate decision-making authority by the County Commissioners;

  31. Hospital Board Recommended Timeline: • Time is of the essence! Recommend the County Commissioners proceed with all necessary action and analysis as soon as reasonably possible to ensure continued interest and participation by all interested affiliation partners. • Joint working meeting: Board, Commissioners, Ad Hoc, MEC for review and revision of RFP (12/28 or 12/30 – as selected by commissioners) • Commissioner Action to Approve RFP and Authorize Competitive Bidding Process • Recommend action no later than 1/11/10

  32. Hospital Board Recommended Timeline: RFP published four consecutive weeks; Responses due by 2/8/10; 2/8/10 public bid opening at joint meeting of County Commissioners and Hospital Board; Time for review, analysis, and recommendation/action by Hospital and County to be determined based on content of responses; range of 1 week to 4 weeks; Need for another public meeting to be determined based on content of responses; County Commissioner action – selection of bidder with executed letter of intent; 90 day due diligence after executed letter of intent

  33. QUESTIONS?

  34. To Send Questions or Comments to the Clinton County Commissioners Mike Curry, Randy Riley, and David Stewart • Email: • commission@clintoncountyohio.us • Phone: • (937) 382-2103 • Address: Clinton County Commissioners Clinton County Court House 46 S. South Street Wilmington, Ohio 45177

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