Hospital Board and City Council Hold Joint Meeting

Thursday, February 1, 2018
Piggott Community Hospital administrator James L. Magee speaks to the combined working meeting of the Piggott City Council and PCH Healthcare Facilities Board on Tuesday.
TD photo/Tim Blair

Members of the Piggott City Council and the Piggott Healthcare Facilities Board held a joint working meeting Tuesday afternoon. The meeting had been called to provide the hospital board the chance to outline measures they will be taking in order to avoid any future lapses in payments for electrical service, and was stipulated by recent council action. A large crowd of interested spectators was also in attendance, primarily due to social media posts which indicated an increase in electric rates for all customers would be considered at the gathering. Speculation which appears to have been fabricated.

In late December, members of the city council were informed the hospital had fallen behind in payments for electric service, and was asking for some relief. At a special meeting they addressed the debt by the city-owned hospital to the utility department, which is also a city-owned entity.

Tuesday evening the council held their regular meeting, and opened the floor to comments from over 50 in attendance. During the gathering the council, and Utilities Administrator Brian Haley, sought to clarify the matter of rates—which have remained basically the same for months. Additional information on the meeting may be found in the Feb. 7 edition of the CCTD.

At issue Tuesday was a bill in excess of $445,000, which had accrued over the course of the past 13 months. Following a lengthy, and often impassioned, discussion the council chose to forgive the debt and offer PCH a lower rate--with stipulations, including the meeting with the hospital board to allow them to outline their plan.

Mayor Jim Poole called the meeting to order with all members of council in attendance, along with city clerk Ramona Magee and city treasurer Jamie Cluck. Also on hand was utilities director Brian Haley.

In calling the meeting to order, Poole explained it was a working committee meeting and the council would not be taking any action. He then turned the floor over to James Magee, administrator of the local hospital.

After introducing several doctors and staff members in attendance, Magee offered an overview of the local operations, noting “this is your hospital, it belongs to you. It doesn't belong to me, it doesn't belong to the board—it belongs to all of us.”

He then reviewed profit and loss statements from several small, rural hospitals in Arkansas and drew comparisons to PCH. In all instances the small hospitals are losing money, although others benefit much more than the local facility from municipalities and counties providing additional funds.

Magee then outlined the numbers for the local hospital, pointing to the 200-plus jobs and nearly seven million dollar payroll. He indicated PCH is a critical care facility, which has different guidelines than the larger hospitals.

“The payroll for our emergency department alone was $3,479,071.54 in 2017, and that's just payroll from W-2's, since we do have some staff on contract,” he offered. “They provide services 365 days a year, 24 hours a day, and we have to have staff on hand to do lab, radiology, medical records, registration and other services too.”

Overall, the hospital's total payroll for 2017 amounted to $7,173.476.

Magee also outlined the information on visits, noting there were 21,304 outpatient visits; 7,033 visits to the Rector Clinic; 6,702 visits to the Campbell Clinic; 627 admitted to acute care; 559 admitted to observation and 195 admitted to swingbed. There were also 4,923 visits to the ER.

“Most of our bad debt is generated through the ER, but we are required by law to never refuse treatment,” he explained. He also indicated many commercial insurance companies will not approve acute care for patients, regardless of the needs.

Magee told the gathering the average cost per day to operate the hospital in 2016 was $43,621.67—or about $1,817.56 per hour. In turn, the monies generated by the local sales tax issue for the hospital generates about $30,000 a month, which will pay to operate the hospital for about 16.5 hours a month.

“Don't get me wrong, we really appreciate those funds,” he added.

He also outlined the particulars of Medicare and Medicaid reimbursements, and noted all payments for patients who live in Missouri are lower than costs.

“We're at the mercy of the federal government for Medicare and Medicaid, but we know we're going to lose money on every patient,” he added. “You can't just inflate the charges to try to gain profit, because they'll only pay a set amount.”

In an effort to better explain the intricacies of the process, the hospital's CPA addressed those in attendance.

Bill Couch is a partner in Welch, Couch and Company and has been working as an accountant in the medical field for decades. He tried to clarify several of the points, and noted “yours is not the only one, there are a lot of small hospitals having difficulty.”

In addressing what measures will be taken to insure the hospital does not fall behind again, Magee outlined two new efforts. Currently, the hospital is in the process of converting the home health building into an infusion facility.

“We had a company come in and mine our data base for people already diagnosed with needing such treatments,” he offered. “We're moving home health into another facility and will be converting this to the infusion center. Just moving into a different facility will benefit us financially.”

He also indicated the hospital is examining a program to provide psychiatric services, dealing with such matters as depression and the loss of a loved one. “The influx of revenue from the two efforts, and the lower electric rate offered by the city will go a long way for us,” he added.

The base of operations for this effort will also be the former home health building.

Fielding a few questions from the crowd, Magee addressed the matter of debt to other vendors and indicated they were still in arrears on a number of accounts. He also responded to an inquiry about how many consultants are on payroll, and indicated only one is used part-time.

Haley was asked to explain some of the particulars of the city-owned utility department, and shared some of the issues which are faced on a daily basis. He also explained that no rate increase is being sought currently, and noted the issue of the hospital's bill will not affect rates in any way.

“Will anyone's electric rate go up because of the hospital's bill,” Healthcare Facilities Board member Keith Crittenden inquired, prompting a “no” from Haley. Seeking to further squelch the rumors to the contrary, he asked Haley to again repeat his answer, resulting in an emphatic “no.”

During the discussion Magee was asked why the city had not offered the lower industrial rate to the facility in years past. Actually, the industrial rate in question has only existed a few years and was put into place in an effort to help keep the L.A. Darling Company facility in the city.

Council member Mike Cook, who had been critical of the operations of the hospital at the earlier meeting, asked the board why he should believe they would pay their bill with the lower rate, prompting an exchange with Crittenden.

“If you look at the numbers you'll see we paid more in over the past 10 years than we would have been billed under the industrial rate,” he offered. “Why wasn't this done a long time ago? I don't understand why the hospital has been drug into this situation, I think we're caught-up in a political vendetta.”

Also weighing-in were two of the ER doctors, including Piggott native Dr. Randy McComb and Dr. J.T. DeWitt.

“I have worked at some of these other facilities we've discussed, and I can tell you we have a much cleaner and nicer hospital here,” DeWitt offered. “And, I came here because of the administration and James Magee. If it wasn't for him I would not be here.”

DeWitt had high praise for the local operation, and added, “we have a great facility, and there is no hospital around here that can provide better initial care.”

He also shared stories of residents from other areas coming to Piggott to take advantage of the quality of care, including employees of other facilities.

McComb echoed the sentiments, and shared his experiences in other facilities and as director of the ER at St. Bernard's Regional Medical Center.

“Everybody wants to rush to one of these big facilities, but I can tell you that the care is just as good here as it is at those hospitals,” he explained. “We need to do all we can to build confidence in this hospital within the community.”

Throughout the gathering Magee, Couch and administrative workers tried to explain the particulars of working with the federal government on Medicare and Medicaid and how the hospital is reimbursed.

Late in the meeting Mayor Poole asked the hospital board members what council could do to help, in addition to offering the lower industrial rate. He then rose to the defense of the local facility, adding “if it wasn't for the work of James Magee, these people on the hospital board and the people that work here this hospital would have probably closed five years ago.”

He pointed to the expansion projects, including the satellite clinics, and offered a word of thanks to those who have worked so hard to keep the hospital open and viable.

“These rumors about everybody's electric rate going up is wrong, everybody pays the same rate and if you got a big bill it's all based on your consumption,” he added.

Other issues discussed by those on hand was the prospects of passing a countywide sales tax to benefit the hospital, which has been fought in years past by the other municipalities in the county. The possibility of an increase in the local one cent sales tax to benefit the hospital was also broached, but is currently not considered a viable course of action.

In closing, Mayor Poole thanked those attending for their input and adjourned the meeting.

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