In the wake of a report on Delta Health System’s financials, which indicated a net income of negative $13.2 million in the year to date, the Washington County Board of Supervisors voted Monday to adopt an order declaring DHS to be in financial distress and to employ senior policy advisor Samuel Odle and Bose Public Affairs Group to conduct an investigation and analysis of DHS’ financial condition.
The report included all DHS facilities and medical groups and was submitted by DHS interim CEO Iris Stacker during last Monday’s regular meeting of the BOS.
Prior to Stacker’s report, there had not been one submitted since February 2022 by her predecessor Scott Christensen, which encompassed the months of October, November and December 2021.
Of the negative $13.2 million, DHS–The Medical Center has a net income of negative $334,000; Northwest Regional Medical Center in Clarksdale has a net loss of $3 million; Highland Hills Medical Center in Senatobia has a net loss of $2.2 million; and DHS’ medical groups consisting of Washington County, Clarksdale and Senatobia have a combined net loss of $7.6 million in the year to date.
The BOS’ decision to authorize an audit and analysis of DHS financials, as owners of the community hospital, was researched by board attorney Willie Griffin along with an inquiry regarding the authority to remove a hospital board trustee.
“I was researching that and what I found was there is no authority for the board of supervisors to remove a member of the board of trustees. Now there is authority to dissolve the hospital board, but you can’t remove an individual board trustee,” Griffin told the BOS. “You can dissolve the hospital board and the effect of it is they are eliminated, but I don’t recommend you do that.”
However, Griffin did discover the board had the legal latitude to exercise other actions as it pertained to the hospital board after reviewing related opinions written by Mississippi’s attorney general.
“There is authority according to Mississippi Code section 41-13-15 that authorizes this board to employ professionals and to move without the authority of the hospital board or the CEO to determine the financial conditions and related conditions of the hospital,” he said.
As such, he recommended the board take action given its authority according to Miss. Code 19-3-69, which essentially spells out the BOS’ right to hire certified public accountants and other professionals to conduct an investigation and analysis of the financial conditions, operations and related programs of the hospital.
Griffin also clarified for the BOS that while they had already retained a professional consultant, they had not given the authority to proceed, which would be done through the adoption of the order.
Before enlisting such services, the BOS was required to make a finding in its minutes that the “financial and operations of DHS are in a state of unknown condition.”
The order goes on to state, in part, “The board deems it necessary and in the best interest of Washington County to order an immediate investigation and determination of the financial condition, operations and related programs.”
The order provides that the DHS Board of Trustees cooperate and make available to Odle and Bose, their employees and associates as well as any and all records or documents required for the analysis.
As outlined in its order, items required to perform the analysis include but are not limited to the last three fiscal years of financial statements and the most recent year to date financials with balance sheet; last two years of external fiscal audits; last 12 months of board minutes of the board of trustees, the finance committee and the audit committee; most recent Joint Commission Accreditation of Health Organization (JCAHO) inspection report; any other external report for the past 12 month conducted by state agencies; summary of pending litigations; information on any external actions by a governmental agency or a payee that is ongoing; and such other records that the consultants deem just and proper.
District 1 Supervisor Lee Gordon was personally assured by Stacker, whom he regarded as the “key component” in the process, that she and the DHS board would work collectively and willfully with the BOS until the audit is concluded and thereafter.
District 4 Supervisor Mala Brooks said after conferring with three hospital board members, “they are very much ready to move forward.”
Her sentiments were akin to Gordon’s in that their goal is to work collaboratively with the hospital board and lend the necessary support.
“I want to let the hospital board do their job and let’s hold them accountable a little bit stronger than we have in the past…I just want to make sure we’re working together. I think we would get more accomplished that way,” Brooks added.
Gordon made a motion to adopt the order and Brooks seconded the motion, which was carried by an unanimous vote of the BOS.
