TMH accepts 2009 audit

It was no ordinary year for The Memorial Hospital in 2009, and Certified Public Accountant Mike Rowe, of Stockman Kast Ryan, didn’t expect an ordinary financial audit.

The cost abnormalities of moving into a new $42.6 million facility, as well as heavy turnover in the financial department, caused a few deficiencies in the audit, Rowe said as he presented the audit to the TMH board at its monthly meeting Wednesday.

But, he touted TMH for its compliance and material strength throughout the process.

“We got full cooperation from all the staff and had full access to anything we asked for,” said Rowe, prefacing his presentation to the board. “We had some unique challenges this year in finance with the construction of the facility and your regulatory agreement. But, we did get through it and we have a few findings but none that are material weaknesses or compliance issues, which is important.”

TMH board members accepted the audit in a 6-0 vote.

Obvious changes in the audit from 2008 to 2009 were reflected by TMH’s capital assets and long-term debt, both of which can be attributed to the new facility, which was completed and moved into ahead of schedule in November 2009.

Capital assets increased from $17.8 million to more than $47 million, however the debt increased accordingly, reaching $36 million by the end of 2009.

Despite these adjustments, Rowe said the hospital’s net assets remained relatively steady from 2008 to 2009, decreasing by $111,000.

On a positive note, Rowe said TMH made improvements in collecting on patient accounts and increased its patient service revenue by 9 percent.

The audit identified three “significant deficiencies,” which Rowe said are common among hospital financial audits.

First, the audit report states the hospital did not adjust employee health insurance accruals on a periodic basis, and an adjustment was made during the audit.

Second, the loan for the new hospital was guaranteed by the U.S. Department of Housing and Urban Development, which requires certain financial reporting practices throughout the year. Rowe said some of these practices were not met.

Also, the Facilities Corporation failed to enter capital asset acquisitions into the hospital’s appropriate software.

However, the final two issues can both be attributed to turnover in the financial department, which went through three controllers and two chief financial officers in 2009.

Chief financial officer Bryan Chalmers started at TMH just weeks before the hospital move in November.

Rowe said the changes in personnel, as well as the difficulty and time consuming nature of the hospital move, could account for some of the deficiencies.

“Transitioning to a new hospital, it takes a little bit to get it filled up and get operations going,” Rowe said.

As for the one significant deficiency found in 2008’s audit, the report said TMH implemented the recommendations appropriately in 2009.

In other action, The Memorial Hospital board:

• Approved, 6-0, a 2009 Medicare cost report provided by Don Hoerl, an accountant based in Colorado Springs. TMH is slated to receive $541,599 in reimbursements from Medicare and $15,340 from Medicaid.

• Approved, 6-0, a recommendation by the finance committee to sign a two-year lease for the TMH Rehab Center to retain its physical therapy space in Centennial Mall. Rent will cost $1,278.25 per month for the first year and $1,339.20 per month for the second.

• Heard an annual status report from Quorum Health Resources representative Mitch Edgeworth. Edgeworth sought to put a tangible dollar amount on the benefits QHR provides for its clients. TMH paid QHR $263,791 in 2009.

The report estimated QHR services at a value of $1.7 million for enhancing revenue and cash flow, expense reduction and Medicare and Medicaid compliance.

Comments

justthefacts 3 years, 11 months ago

Fact: TMH owns a big empty old hospital.

Fact: TMH and others continue to try and find uses for that facility.

Fact: TMH just signed another contract with the Centennial Mall to keep it's rehab center there.

Fact: TMH competes against other privately owned rehab centers in Craig.

Fact: TMH does not need a rehab facility, the community is covered.

Fact: TMH just wasted more money !!!!

Question: How much are the experts at Quorum with all of their expert advice saving TMH?

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xrsareus 3 years, 11 months ago

Ok, I'm totally confused... Here is the link to a story in the press about the old hospital building and renovations that where budgeted.
http://www.craigdailypress.com/discussions/stories/119847/ Below is the answer from the hospital about a question I and others had. 4 January 2010 at 4:55 p.m. Suggest removal Permalink SamanthaJohnston (Samantha Johnston) says… All: As promised, below is the break-down of the rental costs incurred for the Moffat Building downtown (formerly known as the MRI building) and the space currently rented in the Centennial Mall for TMH's physical therapy department: Monthly payment for the Moffat Building $8,652.94 or $103,835.28 annually. Monthly payment for the Mall $2,028.42 or $24,341.04 annually. Total annual rental $128,176.32. The cost savings from the consolidation from the MRI building in 2010 alone will more than cover the cost of the renovation. PT isn't expected to move until late spring - probably March/April - but the annual savings is worth the reinvestment in the old building. Renovations included critical things that must be updated such as paint, carpet, minor renovation of patient treatment/exam rooms, etc. This would be classified as slight remodeling rather than renovation. I hope this helps to bring some light to the subject. As always, I am available by email at samantha.johnston@tmhcraig.org or by telephone at (970) 826-3109 anytime. I welcome feedback, comments and questions. Samantha

Now in today's paper this article appears.
http://www.craigdailypress.com/news/2... So what is going on??? What was the money for renovations used for if now a two year lease was just signed at the Mall for PT????? In the answer dated Jan. 4, unless I can't read it say's " PT isn't expected to move until late spring - probably March/April"
The last part of the answer also states "I hope this helps to bring some light to the subject" I feel more in the dark than ever!!!!

• Approved, 6-0, a recommendation by the finance committee to sign a two-year lease for the TMH Rehab Center to retain its physical therapy space in Centennial Mall. Rent will cost $1,278.25 per month for the first year and $1,339.20 per month for the second.

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Cole White 3 years, 11 months ago

JTF,

You usually have some pretty good facts but I am going to have to disagree with you on this one. . I can understand a lot of people's frustrations when government entities compete with private businesses, but in this case, TMH was providing physicial therapy services before either of the other two businesses were in town. Those two businesses chose to come in and compete against a governement entity, not the other way around. . Same was the case when Northwest Imaging decided to open up an imaging center in Craig. TMH was already providing those services and it wansn't good practice to just stop providing x-ray and CT scans just because a private business wants to jump into the mix. When NW Imaging was failing it was TMH's imaging services and money that maintained those services in our county. No other private company or individual stepped forward and picked up the slack when NW Imagin was failing. As a hospital you can't just provide some healthcare you have to provide enough to be competative and provide your patients with comprehensive care.

Xrsareus,

Haven't you ever had to change your mind? I am not sure if you have ever owned a business or had to manage a project where you work, but sometimes the best laid plans of mice and men change. OK so they are still renting the Mall Space. They seem to be getting a better deal on the rent so I guess that is a good thing and now they have less space they have to remodel and heat at the old hospital and that is a good thing. Sometimes plans change. You can't expect anyone to stick with an old idea if a better one or a different one comes along that makes better sence for the current situation. A good business plan is flexible and adjusts to meet current and future demands. If your organization isn't flexible enough to change you will likely end up being out of business.

I have not always agreed with the decisions that the hospital makes but with regard to physical therapy and renting space in the mall I hardly find them to be issues in which to break out the pitch forks and torches, those days have passed.

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justthefacts 3 years, 11 months ago

Fact: TMH loses money on PT.

Fact: Continuing to provide a service that is being provided by a for profit private businesses when you are losing money, is financial irresponsibility.

Comment: Your are right 1340, " you can't expect anyone to stick with an old idea if a better one or or different one comes along that makes better sense."

Fact: N.W. Imaging only provided MRI.

Fact: Moffat Family clinic and the Craig Clinic ( Dr. Told) Provides and, did provide x- ray service.

Fact: Doctors from Steamboat Springs that practice in Craig, embraced the MRI at N.W. Imaging over the inferior mobile unit.

Fact: Craig Doctors and TMH staff chose to make patients wait for MRI Imaging for up to a week, so the injured person would use the TMH mobile service only availiable on Saturday or Sunday.

Comment:Rather than use the technology that was immediately available to them.

Fact: N.W. Imaging was available 5 days a week, and on call weekends.

Comment: Petty jealously, turf wars, and egos trumped good health care.

Fact: Fortunately private industry chose to provide imaging services since TMH lacked the foresight.

Fact: After taking over MRI imaging, TMH got rid of the techs and only offered service on appointment and then sporadically.

Comment: A great service diminished under the TMH management team!!!!!

Fact: A new hospital with an unbudgeted MRI, and MRI addition, fixed the problem?

Comment: With a loan courtesy of Bank director, Hospital Board chairman, and Moffat County First Husband Ron Danner. (MRI Only?)

Comment: Only another $1.5 million. The PT at the mall is peanuts in comparison.

Fact: Your TAX money at work.

Just The Facts, and always a little more.

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Cole White 3 years, 11 months ago

Facts,

Thanks for the response, but you should go meet with the new CFO up at the hospital so he can maybe clarify some items for you. Their PT provides services to patients in the hospital as well as patients outside the hospital. Their PT isn't losing money at all. I bet if you looked at the numbers they are making a nice profit on that side and if they got rid of PT on the outpatient side then they would lose money because their PT staff wouldn't have anyting to do between visits with patients in the hospital

Also, NW imaging did X-ray and Ultrasound too. Talk to one of the original partners. They had hoped to do CT and mamograms but never could bring them on board.

Sticking with imaging, since other providers in town are providing X-rays to their patients as Dr. Told did and Moffat Family Clinic does should the hospital stop providing X-rays? It's competition so should they stop?. What is your opinion? What about ER patients who need an X-ray at 2:00 a.m. how do they get an X-ray if Moffat Family is closed. Is there a county hospital in the state that doesn't provide these services? Do all hospitals provide PT? I think they do. I just called Yampa Valley and they do. There are a lot of private PT places in Steamboat, but the hospital continues to provide PT. What are your thoughts?

Yes the hospital would schedule patients a week out for the MRI but most MRIs are easy to schedule and aren't done on emergency trauma patients so a wait isn't that inconvenient. Also, demand for MRI doesn't require having MRI techs on site 24/7 so use the best staffing model available for a rural hospital. Too much staff just standing around isn't good business. Would you agree? One tech doing five MRI's once a week costs less than a tech working eight hours a day and only doing one MRI a day. Do you agree?

The new MRI was planned for and purchased using mostly grants. Keeping the old MRI which was out dated was costing them money as it was always broke and many patients were being sent out of area because of problems. Now the new MRI allows very timely scheduling. I think Moffat county tax dollars were stretched further by using outside grant money. What do you think?

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Cole White 3 years, 11 months ago

The group at NW Imaging got into business because they thought they would make a big profit on county residents not because they wanted to provide great care. A couple people saw saw what MRI's cost and thought about the money side. Unfortunately they didn't understand healthcare and how you get paid and they started losing tons of money. TMH came in a bought them out at tremendous costs to the hospital and prevented that group and the MRI services from disappearing from the county. It was a bad business decision to take over NW Imaging and a good one to abandon the lease when better opportunities came up. What do you think? Had they stayed with the NW Imaging building to the end of the contract they would have a worthless outdated MRI, a servies that was two miles from the hospital, and would have paid out hundreds of thousands of dollars over the course of the lease for a service that didn't fit with the current business model. What are your thougths on that? Yeah the debt sucks and it was unbudgeted, but that's half of life, working through the unexpected things that come our way and trying to develop good solutions.

Also, a lot of services that a hospital provides loses money. Maybe even half of them, but the other half makes up for it. Imagine what our lab services would be like if the hospital only provided those that made money. There are private labs in Denver that can provide those services a lot cheaper, but it would take 24 or more hours to turn around a lab that the TMH lab can have ready in just a few minutes or a couple hours. Should the hospital stop doing those labs procedures that lose money and send them to a for profit lab in Denver? The same is true for radiology. You don't make much of any money on X-rays. Should they stop doing X-rays? What would you do at 10:00 at night when you fall and break your arm and the clinic is closed?

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justthefacts 3 years, 11 months ago

Fact: Mumbo Jumbo, Mumbo Jumbo.

The Facts ARE THE FACTS

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justthefacts 3 years, 11 months ago

1340, Sorry for being so rude. I won't do that again. ( I PROMISE)

In house PT services needed at TMH, based at the mall.

MAKES PERFECT SENSE TO ME!!!

Plus the mall is at least 11/2 minutes closer to the new JUST STARTING TO MAKE PAYMENTS ON new hospital ,than the PAID FOR OLD HOSPITAL!!! ( Big advantage)

A $43 Million dollar new hospital with no room for PT services. ( We do do surgery there and take care of sick people don't we?)

MAKES PERFECT SENSE TO ME!!!!

Fact: The CEO of TMH has ignored offers by private contractors to provide in house and out patient PT services.

MAKES PERFECT SENSE TO ME!!!

FACT: In fact, TMH does lose money on PT. I have read the financial statements. (1340 I assume that you have also?)

DON'T HAVE TO ASK THE CEO!!!

JUST THE FACTS, THE SOMETIMES SAD FACTS, THE FACTS THAT SOME DON'T WANT FACE FACTS, AND ALWAYS MORE!!!

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xrsareus 3 years, 11 months ago

Here is my problem with the whole thing. First, I agree that everyone needs to be flexible with goals they set for themselves. It doesn't matter if you are a single person or a large company. You should set goals with your budget, with what you want to accomplish, where you want to be later in a year and how you are going to reach them. I think it is called a budget. So I'm sure one of the TMH goals for this year was to budget $50,000 for renovation of the old hospital so they could put PT there as stated in the January 4 news article and follow up on this forum by Samantha the same day.
"Monthly payment for the Moffat Building $8,652.94 or $103,835.28 annually. Monthly payment for the Mall $2,028.42 or $24,341.04 annually. Total annual rental $128,176.32. The cost savings from the consolidation from the MRI building in 2010 alone will more than cover the cost of the renovation. PT isn't expected to move until late spring - probably March/April - but the annual savings is worth the reinvestment in the old building. Renovations included critical things that must be updated such as paint, carpet, minor renovation of patient treatment/exam rooms, etc. This would be classified as slight remodeling rather than renovation." So 4 months later, I'm sure they spent the $50,000, like they said, and now are going to spend another $31,409.40 on rent at the mall for two years for a total of $81,409.40 and the PT has not moved. How is any company or government entity ever going to get ahead with crazy (just my opinion) choices like this. Usually if you change directions before reaching your goal it is because of some type of unexpected expenditure has come up. I would just like to know from someone, that will give a true answer, the reasoning behind the TMH board and County commissioners decision. What was the benefit to the taxpayer's and to TMH to keep PT where it is for another 2 years? Please, Inquiring minds what to know !!!!!!

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