The latest report from analyst Samuel Odle regarding the financial condition of Delta Health System - The Medical Center indicates the hospital seems to be “moving in a positive direction.”
Odle appeared before the BOS at Monday’s regular meeting to provide a brief update and answer further questions from board members relative to the operations of DHS.
“We continue to meet a couple times a week with Mrs. Stacker and her staff and we continue to make gradual progress and I think that we are on track to really stabilize things by the first quarter of next year — that’s my prediction,” Odle told BOS members. “Staffing has improved considerably. We’ve gone from an average census of 43 patients a day to 47 patients a day so that’s good progress and we want to keep that moving. ER visits and outpatient activity is starting to come back so all of those things are positive signs.”
Back in August, a report prepared by interim CEO Iris Stacker on Delta Health System’s financials indicated a net income of negative $13.2 million in the year to date at that time, which prompted the Washington County Board of Supervisors to adopt an order declaring DHS to be in financial distress and employ senior policy advisor Samuel Odle of Bose Public Affairs Group to conduct an investigation and analysis of DHS’ financial condition.
Stacker’s report included all DHS facilities and medical groups.
Of the negative $13.2 million, DHS–The Medical Center had a net income of negative $334,000; Northwest Regional Medical Center in Clarksdale had a net loss of $3 million; Highland Hills Medical Center in Senatobia had a net loss of $2.2 million; and DHS’ medical groups consisting of Washington County, Clarksdale and Senatobia had a combined net loss of $7.6 million in the year to the date of Aug. 8, 2022.
Odle highlighted one of the most important strategies for DHS - The Medical Center is to separate itself from Senatobia and Clarksdale and it is working to that end.
“There are a number of legalities that have to be handled there, but we continue to make considerable progress. The good news is we’re no longer subsidizing those operations, so they’re standing on their own now.”
He also noted the continuance of discussions with the Federally Qualified Health Centers as he believes doing so is important to the expansion of DHS’ primary care base with the number of patients referred to by a specialist being somewhat of a catalyst in generating the inpatient census for the hospital.
Another objective in stabilizing DHS was to remove auditors from being the chief financial officer (CFO) which has been done.
“Dennis Lockhart is now the CFO for Delta Health The Medical Center and he’s still in an interim capacity, but he’s full time working in that position now which is helpful to Mrs. Stacker and her team and other things we want to do as far as the revenue cycle,” said Odle, noting the search for a full-time CFO will continue. “I think the revenue cycle is improving with the use of OnePoint which is an outsourced revenue cycle, but we still have a lot of work to do to catch up on billings that were not billed in the past.”
Odle went on to point out the $5 million infusion from the BOS into the hospital was “very helpful” in stabilizing its finances.
The funds, according to Odle, were used solely for Delta Health System-The Medical Center’s salaries, drugs and supplies for the operation.
In addition, they’ve been able to reconcile many of the delinquent payments the hospital had accumulated.
“We’re continuing to evaluate the physician network to make sure we have the right physicians and that those physicians have the right productivity and expectations because they’re being paid by the health system,” Odle explained. “We also had a lot of clean up work we had to do on getting the physicians credentialed for the different insurance companies that come here. You have to sort of get yourself certified with that payer because a lot of physicians weren’t appropriately certified so their bills were being rejected.”
Another significant aspect with regard to the hospital’s operation is looking at the “longer-term nursing strategy” which Odle thinks is important to staffing.
“We’ve engaged with a company that’s not only going to help us recruit in the U.S., but also to recruit nurses’ families to come in from The Philippines as well. We think historically it was done, but it stopped so we will reengage in that too,” he said.
He discussed the expectation of other sources of funding that are critical for the hospital to “get going” looking ahead to the first quarter of next year.
One of those sources — $3 million — is anticipated once the hospital is separated from Senatobia along with $3.5 million from Mississippi Emergency Management Agency (MEMA) and $6.5 million from FEMA.
“All those revenues coming in should help to stabilize the healthcare system going into next year,” Odle asserted. “If we improve our revenue cycle and we get those funds to continue to manage our expenses, I think that we should be in good shape going into next year. I think Mrs. Stacker continues to work very hard and do a good job as the interim CEO there.”
Supervisor Lee Gordon inquired as to how long the outsourced billing would have to continue being implemented.
“I think it’ll continue that way at least until next year, but I think until we have a permanent CFO selected, that would be a gradual process,” Odle responded, noting the ideal timeframe would essentially be a little more than a year given the amount of turnover the hospital experienced and the significant knowledge base that needs to be replaced.
Supervisor Mala Brooks broached the idea of acquiring additional funding for the hospital by way of legislation.
With that, BOS president Carl McGee recommended the board grant permission to set up a meeting with the local legislative delegation to discuss the legislative agenda for the upcoming session.
However, his hope is that the hospital is in a stable enough financial position by the time the legislative session commences.
Odle said the funding formula also needs to change so that it gives more preferential treatment to small rural hospitals.
“I think all of the things that we’re doing will move us towards stability, but Mississippi needs to provide more funding for its hospitals because they did not expand Medicaid and you have a lot of people who are getting services, but there is no source of reimbursement because they can’t pay for themselves,” he expounded.
Gordon asked if there was anything else the BOS could possibly do to affect a more immediate impact.
Odle’s response was that if the hospital does not get separated from the Clarksdale campus soon, it may not be able to avoid a $500,000 lease payment that is supposed to be due next year.
“We want to avoid making that payment,” he added. “The second thing is they need to contribute more to their physician medical group to make sure their physicians medical group stays stabilized. They need to contribute Coahoma County dollars to that and not Washington County dollars.”
