Following mass layoffs and an audit report, hospital plans for future

Published 7:52 pm Tuesday, December 6, 2016

The Hospital Authority of the City of Bainbridge and Decatur County was presented an audit report Monday that spelled out the ongoing concerns and risks the hospital faced, and the authority met with Decatur County and the City of Bainbridge Tuesday to discuss how to fix those problems and eliminate millions of dollars in debt.

Bert Bennett, a CPA with Draffin and Tucker, LLP, of Atlanta, told the hospital board Monday there were significant risks that impact whether the hospital can remain open.

“What I do want to make sure the board hears is we as auditors are not saying the doors are going to close,” Bennet said. “What we are saying is there are significant steps you have to take, some things that our outside of your control, that you must accomplish.”

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In 2015, the hospital lost $4.8 million, followed by a $6.3 million loss in 2016. In short, the hospital has lost more than $10 million the past two years.

The reasons for the millions in losses range from computer systems that were not up to date and personnel not doing their jobs correctly, hospital CEO Billy Walker said.

But hospital leadership has taken steps to correct the problems, and interim CFO Gregg Majors believes the process is working.

“It is getting better every day,” Majors said. “My involvement with the turnaround started around September. Particularly when it comes to the revenue cycle, I think this hospital went through a lot of trouble with information system challenges. We changed our hardware out and so on, but all of that doesn’t really excuse the performance, because we did have bad performance that came to the revenue cycle.”

Majors promised a “sense of urgency” to righting the hospital’s ship when he was brought onboard.

“We are taking the necessary steps to make sure we will be here for the long term,” Walker said. We will continue looking for ways to be more efficient with cost structure, and look for ways to deliver high quality care at the most efficient manner we can.”

At Tuesday’s tri-entity meeting between the Hospital Authority, the Decatur County Board of Commissioners and the Bainbridge City Council, Walker gave more details on how the hospital leadership and the authority would tackle their issues.

Financial challenges include updating equipment, training and infrastructure, all items that have been delayed for the past decade and treating uninsured or underinsured patients.

Walker’s short term goals range from redesigning the revenue cycle system, where billing accuracy has fallen short and reduced cash flow significantly; engaging in a health care cooperative with Decatur County and the City of Bainbridge to reduce employee healthcare costs and potentially save up to $180,000; pursuing grant funding and recruiting new physicians.

Some of those short term goals are in the works now, including the redesign of revenue cycles.

After the 2016 Fiscal Year ended in March, the first seven months of the 2017 fiscal year show a loss of $683,716. But finances are looking up the past two months, according to Walker. September saw a profit of $383,000, and October saw $104,000. Walker said he anticipates November to be a positive month as well.

In October, the hospital dropped 40 jobs, modified employee benefits and reduced contracted staff.

“We have made changes in the revenue cycle, and changed management in revenue cycle,” Walker said. “We’ve gone through a reduction in staff to help lower expenses, and we’re looking at non-salary expenses for other reductions.”

Walker also presented what he called “mid-range initiatives” that included initiatives to increase efficiency and the use of Stratus Healthcare to share resources and practices with 20 other hospitals in Central and South Georgia.

County Commissioner Butch Moseley asked what the backup plan was if none of these initiatives reversed the hospitals sinking financial state.

“This is going to be unpopular answer, but if our plan doesn’t work and we can’t turn it around, we are going to have to look at somebody else owning this hospital,” Walker said.

Walker said he did believe the current plan will work, adding, “Even if 100 percent of it doesn’t work, even if 75 percent of it works, we will be much better off than we were last year.”

Majors said he travels to handle hospital turnarounds all over the country, and from his personal experience, a hospital needs to be locally managed for as long as possible before resorting to a sellout.

“They don’t necessarily have the same sincere patient avocation, so to speak,” Majors said. “They operate totally different.”
Majors ultimately agreed with Walker that he was confident the hospital could be turned around.

“We can do well here, but it’s going to take some time,” Majors said.