Glen Rose Medical Center, which has struggled as a small rural facility in a complex health care market that favors big hospitals, last week hired a consultant to explore possible partnerships and other options for the future.
The Somervell County Hospital Authority Board voted to contract with Community Hospital Corporation’s consulting unit for “strategic advisory services.”
The board wants to evaluate potential partnering arrangements with other health care systems, including affiliation, purchase, lease or other options. Or it may decide to keep the medical center an independent, county-owned facility.
“We are making a decision to explore opportunities, whatever they may be,” board Chairman Larry Shaw said at last Thursday’s meeting. “This is probably a necessity. We are exploring every option and looking under every rock.”
Board member Gary Whittle added: “We’re trying to end up with what’s best for the entire county.”
In another meeting on Tuesday, the board also approved a new budget for fiscal 2011 that begins Oct. 1 and received the results of a financial audit for the last three months of last year. The budget contains more than $1.1 million in capital expenditures, including funds to hire a surgeon and surgery, cardiology and laboratory equipment.
The medical center is budgeting for an operating loss of $851,000, much of that due to bad debts and charity care.
The outside financial audit, conducted by Condley and Co., L.L.P. in Abilene, didn’t turn up any surprises, but auditor Jeff Graham noted that managed care contracts continue to present a big challenge for community hospitals.
Constantly trying to renegotiate those and get the best contracts is key to the future, Graham said, because “self-pay is going to get hard to collect.
“There are lots of challenges in this arena,” Graham added. “This medical center is a great asset to the community and really looks first-class.”
CHC consultants earlier this year conducted a “desktop operational assessment” of the medical center to give board members a clearer picture of the center’s operations and its strengths and weaknesses. The review concluded that the facility is on a “good foundation” and suggested areas to improve, especially in managed care.
Because GRMC is a “standalone facility” and not part of a chain, it’s been difficult for it to leverage big health care systems such as Cigna, United Healthcare and Blue Cross. The medical center’s affiliation with Baylor Healthcare System has helped it get more favorable pricing.
CHC consultants will assist the board to develop a request for proposal and send it to potential strategic partners, review the proposals and recommend finalists to interview. The consulting arm also will assist with negotiations and stay in communication with the medical staff and community about what’s happening, said Cindy Matthews, CHC senior vice president of marketing and strategic development.
In return, the board will pay CH Consulting professional fees of $2,200 per day for the president/executive vice president’s time, $1,800 per day for the senior vice president, $1,500 per day for vice president and $750 for the staff. The cap on the agreement is $25,000.
Lake Granbury Medical Center has expressed interest in an arrangement with GRMC. It’s not known yet whether it will be one of the potential strategic partners evaluated. A more formal relationship with Baylor also has been discussed in the past.
The medical center is in the process of evaluating information technology vendors for a new system, which will cost $1.5 million and is not included in the fiscal 2011 budget, medical center Chief Financial Officer Ray Reynolds told the board.
The first round of federal stimulus money is available in March 2012 for hospitals who meet the Sept. 30, 2011, deadline to implement standardized electronic medical records by 2012.
To meet that deadline, the medical center must go ahead and purchase software and hardware between now and that year so it can install the system, build interfaces and go “live” by next June.
In other medical-center related news, Somervell County Commissioners appointed board members Bob Lancaster and Gary Whittle to new three-year terms.