HCHC BOT review financial indicators, approve asset agreement for EMS services to supervisors

MT. PLEASANT - Henry County Health Center CEO Robb Gardner pointed to financial impacts caused by the switch to managed-care Medicaid in 2017 as a reason behind the hospital's decision to 'restructure” certain lines of service.

At the HCHC board of trustees on Tuesday, Gardner reviewed data from the Iowa Hospital Association on financial indicators for HCHC as compared to critical access hospitals across the state.

According to the data, HCHC is operating at a -4.8% operating margin.

'You can see our performance really started changing in 2017 and 2018 on the operating margin. That's the reason we had to make the very difficult decision about labor and delivery. Also too, we are talking about some other needs for transition for other service lines such as EMS and other operational changes within the organization,” Gardner said.

Before 2017, the hospital was 'at or above” their peer group.

'That is the first full year of managed-care Medicaid in the state of Iowa that we lost our cost-based reimbursement,” Gardner added.

The hospital's days cash on hand has also dropped about 40 days across a ten year timespan and is at 226.1 days cash on hand. From 2017 to 2018, HCHC's days cash on hand dropped about 25 days, Gardner said, a historical trend across the past two fiscal years.

'The discussion of the reason why about the need to restructure on some really important service lines [is] for the long-term sustainability of the hospital to be able to be here to provide services to our community,” Gardner said.

During the meeting, the board of trustees also approved an EMS services asset agreement as well as an EMS services utilization agreement.

Gardner explained the asset agreement is 'a nominal transfer of all assets to supervisors for a dollar of the assets that … provide the ambulance services.”

Within the agreement, which was drafted by the hospital's legal team, the hospital also stipulates the Board of Supervisors must develop a Henry County EMS board. One of the hospital's trustees would sit on that board.

'I think that's appropriate fiduciary responsibility. If the board of trustees were to agree to transfer those assets for a dollar, there should be some governance and fiduciary oversight on how those assets are being used to serve our community,” Gardner explained.

Another stipulation is that the supervisors will agree to provide the service for five years following the transfer.

'That's a commitment that we felt was appropriate the supervisors commit to our community. EMS is important for the health of our community,” Gardner said.

The CEO added the hospital 'would have the first right of refusal,” should the transfer of the service to the county not be able to provide the service for five years and ensure assets would be transferred back so the hospital could continue to provide that service.

The utilization agreement also ensures to the Board of Supervisors that the hospital is committed to'use them as a EMS service,” for 'transfers of hospital patients.” The agreements will be presented to the Board of Supervisors at their next work session.

In addition to the EMS update, Gardner also gave an update on the hospital's COVID-19 response. As restrictions have loosened, the hospital has begun offering normal services again.

'We are starting to resume services, we are seeing patients,” he said.

Gardner explained the hospital began offering elective surgeries on May 7 and has also resumed outpatient services.