 Okay, the first item on the agenda is the executive director's report Susan Barrett. Thank you, Mr. Chair. I have a few announcements first our schedule for May will be posted very soon But to give you a couple of highlights I won't go through the whole schedule, but we we are conducting on Monday May 13th our general advisory committee meeting here in this building on the fourth floor that is open to the public and that starts at 2 p.m. And Then on May 15th, we're going to be hearing from vital and Their budget as well as getting a primary care advisory group update And then we're also on the 15th of May having our primary care advisory group meeting at our offices at 144 State Street again open to the public that starts at 5 p.m. And And Lastly on May 29th. We will be traveling down to Randolph and Gifford Medical Center for our traveling board meeting We're looking forward to that Also want to let folks know that we have a couple of job openings at the board. They're posted on our website We're looking for a director of health systems finance as well as a health policy analyst position. I Can say for myself It's a wonderful place to work and we'd welcome folks sharing that information for anyone who's interested and then last We have a sign-in sheet out back for people coming to the meeting But then there's also a comment a column if you are interested in providing a public comment If at the end of our presentation when public comment comes up and you haven't signed in I'm sure that we can accommodate you But if you are interested in providing a public comment, it would be helpful if you put your check mark next to your name and That is all I have to announce today Thank You Susan the next item on the agenda are the minutes of Friday April 19th. Is there a motion? It's been moved and seconded to approve the minutes of Wednesday April 19th Friday April 19th Without any additions deletions or corrections is there any discussion Seeing none all those in favor signify by saying aye aye any opposed So now we're going to move right forward with Springfield hospitals enforcement discussion and we'll turn it over to Agatha and Laurie to Just set the stage Great. Thank you So my name is oh first I'd like to reiterate Susan's point that it is a great place to work and we are great people to win My name is Agatha Kessler and I'm joined here with Laurie Perry and Our co-worker Kelly Thoreau is not here today, but substantially contributed to What we're presenting today, and I believe she's listening on the phone. So thank you to Kelly Just briefly you have a full afternoon planned for you First we're going to go over Springfield's FY 18 year-end results in the context of an enforcement hearing an enforcement discussion Springfield will then get up and and present to you and then the board will deliberate and potentially vote on their Enforcement then after that we will turn to the second topic today Which is their request for an amended budget order related to a charge request and increase in their charge So staff have a presentation where we Laurie will give you their our recommendation and then the board will deliberate and potentially vote So moving on to I think This is the enforcement discussion This is the sixth time you've seen a setup like this This is the sixth hospital. We're reviewing this enforcement season So first we'll look at their year-end results then we'll look at their year-to-date results for fiscal year 19 As of February 28th of this year. We'll look at a few slides that have Year-end results for a couple of buckets that we track and PR operating expenses operating margin and total margin Then Springfield will come up. They'll get sworn in you'll have a discussion with them and then the board will deliberate So This slide here We have a few slides prepared this slide here shows the net patient revenue fixed perspective payment and charge requests for the last two Years and across the board for both MPR and charge the board has approved spring Springfield's request So you can see an FY 19 They requested a little over 59 million which was approved and in FY 19 They requested a little under 60 million which was approved And the percentage change is is reflected on the screen Then for charge in FY 18 They requested a 6.5 percent charge which was approved and most recently in FY 19 They requested a 5% charge which was approved and later on today You'll see there's an asterisk here indicating that on March 27th Springfield did request an additional 5% charge Which will be discussed later this afternoon So this slide here is very dense And we're gonna take a little bit of time kind of walking through it The purpose of this slide this slide is not necessarily sequential, but it is meant to illustrate the timing Of when information was submitted to the board So there's been a lot of questions about when things were submitted to the board So this this slide is meant to kind of provide a little clarity to the questions surrounding timing So first we'll go over the top portion. There's basically three portions The top portion is the budget to actual which shows how the hospital performed compared to their budget Their budget that was submitted in or that was approved for October 1st 2017 And this is why Springfield is here today because they came in at a minus 10.8 percent variance on their NPR FPP For operating expenses that came in above budget by 3.5 percent On the right hand side These are the three kind of financial indicators that staff like to take a look at the board likes to take a look at which are Operating margin total margin and days cash on hand now these figures are a point in time as of September 30th 2018 so on that day, which is the last day of the fiscal year. They had a minus 12.8 percent operating margin We also have it reflected in dollars. It's about minus seven million dollars total margin of minus 12 percent Did I say total margin total margin minus 12 percent, which is about minus six point six million And they had 47 days cash on hand and all this information is coming from The adaptive planning tool, which is our database The second part of this the middle portion here is their FY projection that was part of their FY 19 budget submissions the part of the annual budget submission we ask the hospitals for Update on their projection for the current fiscal year. So in Springfield presented to the board on August 29th These are their projection figures that went with their submission So you can see here. This is the budget to projection variance on MPR FPP minus 3.8 percent so August 29th 2018 they projected they'd be down 3.8 percent But kind of bopping back up to the front part the top part of the screen You can say they actually came in at minus 10.8 percent same with operating expenses. They projected They'd be down 0.3 percent. They actually came in above 3.5 percent And then you can do the same sort of analysis on the right hand side of the screen with operating margin total margin and days cash on hand In August 29th, they thought they would come in at minus 921,000 they actually came in minus seven million There is a little astrocare. So this is a place where the board asked for more information on August 9th of 2018 Green Mountain Care Boards staff asked Springfield Whether or not their projections were still valid and they did update their projection at that time to say that they would have a minus 2.5 million dollar operating loss Total margin August 29th they projected it would be minus 0.4 percent or minus 263,000 they came in Much lower than that and days cash on hand. You can see they projected a hundred and seventy eight days cash on hand when they actually came in 47 days cash on hand Are there any questions so far on those the top and the middle portion of the slide? I guess I can you remind us when you receive the year-end results? We as a board receive the yes January 31st, right Lori. Yeah, thank you of this year of this year. Thank you And I just also clarify on when they presented on on August 29th It was also asked at that time where they thought they were gonna end up because their Margin was running unfavorably. I think about two million At that point through April was where they were reporting and they still said they would only be about two and a half million dollars negative correct, right? Okay, thanks Okay, so then the bottom part of the slide again, we're still looking at FY 18 actuals how the year ended This is an analysis that the staff like to provide that shows The end of one fiscal year compared to the end of the fiscal year the previous year So how did FY 17? Compared to FY 18 so you can see their MPR Increased in FY 18 1.9 percent their operating expenses increased by 7.6 percent On the right hand side again are those three financial indicators that we track One point of clarification and you've heard us say this before but in case there's new people in the audience You'll see it says operating marriage Operating margin percentage change in points and what that means is it's the difference between FY 17 and FY 18 in points So if you look at this this will say that their operating margin in FY 18 was minus 5.7 points lower than it was in 2017 Total margin percentage change in points is minus 8.8 and a day's cash on hand is minus 55 days Any questions? This slide shows we've asked Springfield to come in today and address their year-to-day performance So this slide shows their FY 19 year-to-date performance as of February 28 Again same format. We're seeing an MPR budget to actual variance of minus 5.4 percent Make sure I don't need notes to myself here. Nope Operating expenses are coming in above budget 3.9 percent and then their financial indicators as of February 28 2019 are minus 7.9 percent which is up compared to the area and results of FY 18 Yeah, up Total margin is minus 12.7 percent and days cash on hand is 9.4 Which is significantly lower than their how they finished up FY 18 Their actual to actual comparisons the same data just a different look. This is how they did February 28 2017 compared to the same date in 2018 their MPR FPP Grew by 1.6 percent their operating expenses grew by 5 percent For their financial indicators again a point in time. This is as of February 28 2017. They're operating. I'm sorry 2018 Their operating margin was minus 4.6 Their total margin was minus 1.8 and as you know, we did not ask for a day's cash on hand In 2018 so we don't have that data point and then this last section is When they submitted their FY 19 year-to-date results they hospitals also submit a projection for the remainder of the fiscal year So they're projecting Springfield is projecting that they'll be under budget 5.4 percent on MPR FPP they'll be over budget on operating expenses by 1 percent and they're projecting that their operating margin will The difference between their budget to projection is minus 6.2 points And on total margin minus 9.2 points and they're projecting that their days cash on hand will come in 98 98 days lower than they budgeted So any questions on this chart We're almost there we have two more charts two more slides All right, so this slide shows The next two slides will show five years of results We're tracking from FY 14 actuals all the way to FY 18 actuals with a little kind of intermission in between for FY 2018 budget and FY 2018 projection So you'll see and so the top row is the dollar figure The bottom row is the percentage change between from the previous year So we calculated the percentage change from the previous years For each full actual year actual results We did not calculate the percentage change for budget and projection just because they're budget and projection So the the numbers below are the actual change from 14 to 15 15 to 16 16 to 17 and 17 to 18 and you can see that it's significantly up in 2015 And then down and up a little bit more in 2018 the five-year CAGR is a calculation Five years of actual results so 2014 to 2018 and it comes in at 1.6 percent We've also included their budget for FY 19 over here This same analysis is done for operating expenses. So you can see the dollar figures here Their five-year CAGR is 2.8 percent for operating expenses a growth of 2.8 percent and their budget for FY 19 is 60.6 million and again the percentage change from year to year is reflected on the last row Any questions? And then this last just make a comment and this will probably be more discussed when Springfield comes up, but if we also added a column which puts their new forecast in which was 56 744 that would be up 7.1 percent for the year and When we flipped to the prior page through February they were up 1.9 percent and last year they were up I think 1.7 so that means the back half of the year has to be up double digits significantly so I don't know if you guys had talked to Springfield about that or we can wait until they come up But I just wanted to point that out. It's a significant growth for the next seven months So we'll be you know questioning that. Yeah, I think that would be a good question for Springfield to address Okay, and then this last slide is five-year results for operating margin total margin I just want to point out all the data sources that staff pulled together to put this together because It's it's actually a complicated Graph to put together And if anybody wants to go into deeper on these on these data points the data sources are listed below So for operating margin It's expressed as a dollar figure and as a percentage. So this is not a percentage change This is a percentage of operating margin Again, we've included the budget for FY 2018 and the projection We have a little asterisk here. You've seen this asterisk before this is again drawing attention to the the the query that the board made Regarding their projections and whether or not they were still accurate for operating margin and again They did update their projection to say it would be a minus 2.5 million dollar operating margin which ended up coming in at a minus seven million dollar at the at the year end and Then total margin. It's the same same data from FY 14 to FY 2018 including the budget for 2019 expressed as a dollar value and then as a as a percentage So that concludes the data portion. This is the data that we've asked Springfield to come in and be prepared to address So at this point are there any questions any questions for the staff Thank you very much great And before you get started, I just want to welcome you both because I believe this is your first time here before the Green Mountain care Board and I just want to say on behalf of all the board that We're very thankful for the efforts that you have put in in trying to turn the situation around at Springfield We wish you the very best in those efforts So thank you for all that you've done to date and what you will do in the future So whenever you're ready, you can take it away Swagger Not sure how well this how close I have to be to the might can very close It's working good. Is it working? Okay. Good. Thank you. Thank you. Well chairman Mullin. Thank you very much for having us here We do have a presentation that I guess kind of combines both Taking a look at where we're at in 2019 and then also taking a look at you know our request for a rate a mid-year rate increase So that's the presentation that you'll see Many other numbers obviously are going to be the same as the numbers that your staff has just put up But it hopefully will give you an opportunity to see a little bit of what's behind those numbers from our perspective So if I can figure out how to work this Here we go First thing that I wanted it to do is to introduce both of us to the to the board And to the audience that's here Again, my name is Mike Halstead. I Am a employee of quorum and the hospital Springfield Hospital and Springfield Medical Care System has a contract with quorum To provide an interim CEO which I am and to my left is is Wayne Schultz He's our interim CFO. We'll talk about when we arrive But a little bit of our background just briefly if we can do that. I'm a 40-plus year health care executive Over that 40-plus years. I've been a CFO a CEO and most recently was the vice president of East Division For quorum health resources, which essentially he says that I was the corporate person responsible for the hospitals that we dealt with And had arrangements with from roughly the Mississippi River East to the Atlantic Ocean and up to Maine and down to Florida And and so I've got a lot of health care experience. I was actually retired when I got the call from quorum to see if I could Be willing to come up and help Springfield Hospital because quorum adjustment engaged Wayne here is is also a 40-plus year health care executive in the financial world He I think was also retired When he got the call So we're both pulled out of retirement to come up and help the Springfield Hospital and we're very excited about being here We're here as I said as Employees of quorum health resources, and if you're not familiar with quorum health resources, that's a national health care company It's been in business for over 40 years Based out of Brentwood, Tennessee And we work with over a hundred hospitals in the country Providing hospital leadership as well as operational consulting for the hospitals and much of what we've been able to do at Springfield so far has been based on Data an analysis that the consultants from the operational side of quorum has provided us so Provide quorum provides us with the information that we needed to make some of the decisions that we've made Here's the slide a little bit different, and I apologize same kind of numbers, and that's a very busy slide But there's a couple of things that We wanted to point out on this slide because it'll lead into some of the discussions on future slides Obviously they the first thing is is that the net income Which if I could figure out how to use this laser pointer here we go net income right here You can see what's happening with that net income and then the final the net gain Those are very similar numbers if not the exact numbers that your staff just presented you in terms of Where the organization has been And you'll see in a second Our analysis of why we're in the situation that we're in We believe that the prior projections of the revenue and expenses for the years 2018 and 2019 budget were significantly Overly optimistic, and you'll see from a point of view on the revenue side if you look at activity levels Which is what drives your revenue When we arrived on the scene we saw that the 2019 budget that had been presented was actually in that and that should be that's an error right there Instead of being 128 percent it should be 28 percent greater than what the 2017 actual was So the budget is basically saying that you know 28 percent higher than than the most recent actual information that was available If you looked at the 2019 year-to-date February That's 35 percent higher Or I'm sorry less than the 2019 budget So again the acute admissions Which drives the inpatient part of the business? is Not coming in where the 2019 budget had estimated it it should be and on the 2019 projected It's 33 percent less than what the 2018 actual was So activity levels is a problem if you look at the outpatient side of the business The emergency room visits means six percent less than the budget And eight percent less than last fiscal year. That's 2019 to 2018 Same thing occurring in the other major driver for revenue the operating room Cases are 29 percent less than the budget for 2019 and eight percent less than the 2018 amounts Again, if you look at it over a three-year period, which we did the expenses are increasing at the rate of 11% when the revenues have increased only less than 1% So it's not difficult to see then what's happening with the operating loss that is going from Basically a break-even in the year 2016 to the six million dollar 6.9 almost seven million dollar actual number for 2018 and What we're projecting right now without any further increase In 2019 that we're going to come in around a six million dollar loss from operations When the board finally realized what was going on they immediately Asked for a Audit to be done not only the financial audit to be done, but also a forensic audit The the main purpose of that was to find out was there any Misappropriation of funds Was was the their funds going outside the organization to create those kinds of losses The audit that was done by Barry Dunn. It was a forensic audit Concluded after they had looked at it for several months that there was no misappropriation of funds But that there was a greater need for transparency of information Throughout the whole organization starting from the governor governance level all the way through the management level And that there were some financial policies that weren't followed Specifically now policies around the use of investment monies Investment monies were drawn down from the investments as you can see the cash on hand going down Without the Knowledge to some degree of the governance of the organization And so that's what the audit encouraged the organization to do We have have addressed those issues in a couple of different ways We've improved the kind of reporting that goes to the board on a monthly basis We're using a lot of the templates that quorum uses And we're asking for Approvals from the board that they hadn't been asked for before relative to capital acquisitions and so forth as well as we're Improving the communication with the employees with the management teams We're trying to improve the communication with the community and As well as hopefully Your organization here is feeling a little bit better about the information that we're trying to get to you on a more timely basis I hope you can appreciate that When we came on the scene It was difficult to understand the very complex organization that Springfield Hospital along with Springfield Medical care systems has and for us to get our arms around that very quickly and understand and be able to provide the Information that that we could Rely as being as accurate as it possibly could be Now some of the drivers to those expenses as you could see it's it's not It's not the revenue side of the story except that we're not reaching the levels that we should be It's the expenses that Are have been If I could use the term a little out of control And so when you look at those expenses We took a look at it over the last three years just to get an idea of what the drivers were the major drivers And it's three three major categories In the employee benefit side primarily health insurance over that three-year period and that has gone up two and a half percent I'm sorry two and a half million dollars, which is about 69 percent From the year 2015 to the year 2018 That's a significant increase in cost the organization has a Self-insured health care program Which we're looking at changing as soon as we can See if we have a more Cost effective and efficient way to provide that health insurance In the purchase service area, which is also a two and a half million dollar increase or about 27 percent over that three-year period Half of that increase is driven by locoms locoms being providers of care that Are on a temporary basis? Any time we have a vacancy in the organization and we're not able to fill that provider with a with a full-time Person we've got to bring in a locom on a part-time basis About 1.4 million dollar increase over that three-year period was in those areas and Then in the purchase service area the emergency room provider We had some changes over there and that the increase in expenses were about seven hundred forty five thousand In just that edine line and you'll see how we've addressed that and then in physician fees We have brought on a second orthopedic surgeon and over that three-year period The cost which occurred primarily in the in the year 2018 drove That increase in cost or increase in expense I'm maybe dancing too fast here because no, I guess I'm okay one of the questions that The staff at the Greenmont care board had was they wanted to see the transfer of funds Between the organizations, so we tried to put this slide together It it it's very confusing slide. It takes a lot of explanation. I'm going to take a stab at it This shows the actual cash that that flowed from the hospital over to Springfield medical care systems Now Springfield medical care systems is the parent organization On Springfield Hospital It houses both the an FQHC As well as a lot of this senior management team And other management and services that are provided to both organizations So for example in the year 2019 through March 31st, you see a figure of one point six million dollars of cash going from the hospitals Accounts over to the Parent organization a lot of that was the pays for some back expenses of the parent organization, which could be both FQHC and the Shared management team that is housed in Springfield medical care Systems corporation We don't anticipate having any more of that Going for the rest of this year We believe that the cash flow For that parent organization will be sufficient enough to pay its own expenses And not have to send any cash from the hospital While you're on that slide and I was trying to save it towards the end but since you have that slide up sure In the finance committee notes that you had Ending March of this year The net transferred in and out you had four point six seven one million How does that jive with what we're seeing on this slide? Yeah Well, we're really talking about two different things here This is actual cash that was transferred and then number you're reading on that financial write-up indicates costs that are allocated between the organizations and So that's a much larger number than the actual cash So, you know as an example the hospital could be paying for expenses For both organizations, and then there's just an accounting allocation so that hits that line item that you're reading right there So it's just it's just a much larger number that the cash that we send over because we keep separate bank accounts between The two different entities and so I mean since I arrived cash has been very tight as you can imagine so we actually Project cash by the week going forward And so I can tell you two weeks from now or three weeks from now or four weeks from now We got a transfer of funds and funds can go both ways but in the Historical perspective the funds have always been flowing towards SMCS out of the hospital Hospital gathers a lot more cash than does the the clinics as an example just a much bigger Financial operation So that's the basic answer I know it gets more complex than that if you really broke into that number There'd be a lot of line items that make it up, but that's my perspective perspective when I looked at it Hope that answers your question. Well, I think it does I think what I heard you say is that you're accruing in your financial system the 4.67 million and these numbers here only reflect the actual cash Yes, sir. I think that's correct. I mean I call it an allocation versus an accrual Obviously there can be some expenses that are crude on a monthly basis, but it's the actual allocation of expense over from one entity to the other You know accounting treatment wise I mean, this is my opinion because this is not the way it's set up currently in the system But in my experience accounting wise you would have like a do-to-and-do from between two organizations And then when you produce the consolidated financials, they just wipe each other out. It's all part of the same organization So if you were to look at the consolidated audit report, you would see that kind of entries made as well But this is the way it's been expressed on the on the interim basis in our financials. So what would be the Purpose of the transfers to SMCS is there a portion of any administrative Expenses such as your salaries that are paid for by SMCS versus Springfield Hospital Or I'm just trying to get to you know, what the the logic is behind Yeah, well in general, you're correct They go both ways and I say that because there could be some expenses at the hospital pays The biggest expense that that probably pertains to this Question would be employee health claims because the hospitals pays a hundred percent So a lot of that cost has to be filtered over to the clinic side. So that's when you see the big dollars That's the biggest expense and then on the SMCS side as the example my salary might reside in that and We allocate around 25 to 40 percent of cost back over to the other organization. So Both ways when you have to dissect the number to really find out the total dollars going back and forth for the allocation of cost That's the best way I can explain it Okay Sure The same document that Kevin referenced the budget amount for That netting was two hundred and twenty five thousand versus the four point seven million You know that shows there and I can understand that there would be flow funds come in the other way to offset some of that But do you think that by the end of the year? That that two hundred and twenty thousand dollar Budgeted amount which I would soon would have all these ins and outs reconciled is on target No, sir, I do not believe that and the reason I know that is because I know a big Big portion of those dollars related to some Liabilities that had to be paid that we were behind in And that's probably part of what clouded the issue last summer when the hospital presented to this board Because I'm not sure anybody asked those questions about the current liabilities the liabilities have been growing But even after that, I guess the meeting was in August is that one? so I think September October November were the main months that the liabilities are really great So if you were to go back and look at the details of our financials in this current fiscal year You would see at the end of December. We made some large payments to pay down current liabilities At the end of January we made almost an equally large amount of payments So there were some huge liabilities sitting out there That will require to be paid on those dates And so we actually that's where a lot of the cash went So when the cash was liquidated of our investment accounts, we reduce those liabilities. So those dollars are locked in they're not coming back That's the answer you talked about that big change last fall and I Know that you both know what you signed but The Attestation of oath does have paragraph six, which is the same Attestation that your predecessors signed and they failed to neglect to update us So I'm just bringing that out to make sure that you both understand that if there is all of a sudden a major change That you would notify us Okay, you know I understand you I understand what you're saying I Mean this is my commentary. Okay. I'm not quoting facts But because I wasn't here back then but the financial statements that were produced at that time I'm guessing showed this increase in liabilities so The CFO and the CEO could have been absolutely truthful here are the financials and if somebody doesn't ask the question Why are liabilities growing so much? Because some of those some of these liabilities that that we had to pay down and in December We're accruing last summer So they could have been paid then They had the capability of paying them. They just did not and So I mean this board could have asked that question I know I didn't go back to look to see what you saw So I assume it was correct, but I don't know that I'm trying to make though is that it's not incumbent upon this board to ask the question if there's a material change, it's incumbent upon you to notify us of that and I would say for example Finding out four months after Payments were shot off from CMS That's something that we should have been notified about Because then we could have asked questions of CMS on on Springfield's behalf as well and Tried to do something. So that's the only point. I'm trying to I say I say is that You signed an oath that says you will notify us of significant changes So if anything truly significant Nificant occurs, I would hope that you would bring those to us unlike what we saw in the past. Oh, I see That's the point. I'm trying to make And that's and Mr. Chairman that's precisely why that earlier slide said that we're trying to be more transparent With with the community with the board With your organization, that's our intent to be as transparent as we possibly can be when we know about it We're going to communicate it Thank you Moving on and so up to this point. We've kind of talked about history the rest of this presentation is going to talk about What we've been trying to do in changing the future outcome of the organization and to If I may say it in this terms save this organization because it is on the verge of Not being able to continue as a going concern Back at the tail end of 2018 The board made the decision to change CEO and CFO almost at the same time That's when quorum health resources Was asked to assume the leadership Wayne came on board shortly before January. I came on board January 17th and we've been very focused on How do we change that cost curve? At some point in the very near future, we're going to shift our gears and start looking more at how do we Get those activity levels up that I talked about earlier, but initially we had a look at the cost curve Fortunately, this the state stepped up and was able to provide us with about a million dollars of advanced Medicaid money That helped us get through a couple of pay periods right at the end of January early February That we would have had trouble getting through without the assistance of the state to do that So where we focused our energies this particular slide Attempts to show you on a hospital point of view What are some of the key initiatives that we have? an active and and it identifies a annualized amount of money that we think we can save the organization and as well as what We should be able to recognize between now and September 30th or over the next five months or so We had a reduction in force We targeted or tried to target the non patient care areas The non patient care areas And that is going to we believe Reduce the expense of the organization about 1.7 million dollars Since that time that we had that reduction in force We've had turnover and I have a slide in a few minutes that shows you where that turnover has occurred, but we've had Voluntary folks leave And I can understand why there's a great uncertainty about the organization and so in Today's day and age There's a lot of healthcare organizations that are recruiting very heavily for healthcare professionals and and so We're doing everything we possibly can to try to maintain the staff that we have In in terms of communication in terms of recognition, but we had turnover that's going to produce Unfortunately about four hundred and forty two thousand dollars of less expense and that's The people that we believe we will not have to replace There have been a greater number of Staff that have left that we're going to have to replace because they're in key positions that we can't operate the facility without we've had some Efforts and employee benefit reductions in some very minor areas But it'll produce about seven eight thousand in savings. We think We've restructured their the organization employees paid time off accrual limits lowered them They were a little higher Than some of our competitive competing hospitals. So we brought those in line We changed the emergency department provider contractor We have a new contractor now and we think that's going to save us about nine hundred forty eight thousand dollars a year We had to make the very tough decision several weeks ago to discontinue childbirth our childbirth unit On a contribution to margin Was costing us about just under seven hundred thousand dollars a year We looked at it from a Community perspective There are fewer and fewer women delivering babies going on in the future that's being predicted So we found it very difficult to be able to grow that business and without growing it We couldn't sustain a six hundred ninety five thousand dollar negative contributions So we've the board made the very difficult decision to wind that program down Right now it looks like we will no longer be delivering babies after May 3rd We've revamped the staffing in our hospitalist program In terms of the the kind of personnel that we have staffing that hospitalist program and so that should save us 270,000 we're looking at Changing the surgical services There's probably more savings to be achieved there, but right now we know of two hundred twenty five thousand a lot of that Is a result of the fact that we do will not have the childbirth unit So we don't have to have as much anesthesia coverage As as we would have had to have with a childbirth unit And then we're going to be eliminating for some Temporary period of time. Hopefully the match on the employees 401k retirement program So all of that we believe will reduce our expenses by about four point seven million dollars The other part of the organization That we thought might be helpful for you to see is there's an additional savings over at the SMCS Springfield medical care systems, which we've talked about before housing the FQHC and some of the senior leadership Management of the entire organization Similar type of reductions in that part of the organization, which will produce we believe about two point eight million dollars on an annual basis You had those two numbers together. We're over seven million dollars in savings between the two organizations So That's a significant amount of money to remove from the organization and in a short period of time Questions at this point on any of that. I know I'm going quickly Okay, this particular slide and I talked about the turnover I just wanted to give you some View on the kind of personnel that that has left the organization since February 1st Or second, I guess is a slide says About 77 people have left the organization. That's on a base system-wide of about 550 people And you can see that About 65 percent of that I would call in the direct patient care areas And remaining 30 something percent is management and administrative areas Those are primarily the areas that we're going to try to operate the organization without replacing the other areas Some 50 some fds were Actively recruiting to try to replace those people We've got some other significant activities going on from a strategic point of view We continue almost on a weekly basis to be talking with the bank for the long-term debt issues much of what we just went through the 4. Something million dollars on the hospital reductions and the 2.7 million dollars on the FQHC side of the business Deals with being able to go forward and be able to balance our Inflows of revenue with our outflows of expenses. We still have debt that we have to deal with so we have to strategically Look at that. So we're continuing to negotiate with the bank We're Trying the best weekend to negotiate with our accounts payable vendors We have about seven seven point four million dollars of accounts payable Vendors that that's still we owe money to We're looking at what are some of the legal options that we can take strategically to deal with that and we're also Talking with other organizations about partnering with them in some fashion and Dartmouth-Hitchcock is is where we're having some preliminary discussions at this point. So today Hopefully what if I got the message across to you you've heard is is that We're attempting to put the organization going forward in a position where it can Meet it's ongoing Operating commitments We're We've Really attacked the expense side of the business. We're trying to manage the business the best we can We're going to be shifting our efforts to how do we begin to generate More activity at the hospital Very difficult to do today with all of the publicity that we're getting about the future of the organization But we're dealing with that And what we're asking you today is to help us a little bit by granting us the 5% increase In our rates so that we can generate a little bit more revenue to buy us some more time to make some of these adjustments that we Are planning on making at this point I'm concluded and When you want to go to the question For part of the presentation Thank You Mike, and as you know we have to divide it up into two different hearings one on the enforcement and one on the requests for a charge change so Unfortunately though all the questions will probably relate to both which may make the second hearing quite short, but I just want to Start out by asking a few questions that were sent to me by dr. Holmes She sends her regrets for not being here today She had scheduled something in anticipation of this hearing happening previously and with the reschedule it just Things didn't work, but she's a hard-working dedicated member of the board one of her questions is that Asking you what you attribute the substantial drop in the year-to-date 2019 utilization 25% drop and acute care admissions 30% drop in OR cases sizable reductions in imaging etc. And has the percentage drop in utilization been equal across all three payers That that's those are great questions, and I wish I had a really solid answer for you We're trying to analyze that right now It's probably a combination. I would think of at least two things one is The the fact that we are getting a lot of negative press if I can put it that way So we know people are probably concerned About seeking their health care from us and maybe going elsewhere The other issue might be that and this would be I guess a positive thing from an overall health standpoint is some of the efforts that we have in population health and the Accountable care organizations Maybe taking having some effect in terms of people seeking less of their utilization We do know we've been monitoring and this is just current we've been monitoring the change in the Emergency room in terms of the providers And what we're noticing at least it but it's only been since April 9th now But their style of Providing care in the emergency room shows that that they're ordering fewer Radiological tests they're ordering fewer lab tests Then our previous provider was ordering so we're expecting that we're going to see a decline in those two major ancillaries Because just the way they practice medicine Different than the previous providers did So that's the best answers. I don't wane if you have anything to add to that, but we really don't Mr. Chairman we don't we don't have I got to stand in front of you today and say we don't have a good answer for Why those volumes of declining we haven't been able to really analyze them that well yet So with that being said with the lower utilization the natural follow-up is why are position fees running over budget probably the physician fees Are those in the hospital or they must be in the hospital. I'm not sure. I don't know the number that you're referring to Is it expenses? Oh, well, it it the expense side. I thought you were talking about the revenues. I'm sorry on the expense side it would be primarily what I had indicated earlier that We were either Bringing in locums to fill in for people that we've lost or we've gone out to recruit Additional physicians that try to beef up the revenue side of the business So that flows nicely into our next question, which is talking about retention And I know that you and about you and I have had some conversations about this Can you just talk about how you plan on keeping enough people there? We're gonna lock the doors Sorry Well what we're trying to do we we back on February 24th, we Told the the staff that's starting on February 20 while we told them early February But we told them that as of February 24th The entire organization was going to take a wage Reduction And if they were a part of management, they would take a 10% if they're part of non-management. They take a 4% We believe because of the reductions that we just showed you That we're in a position now to restore those wages We're hoping that by restoring those wages and that's going to be effective May 5th That People who are considering leaving because they just couldn't absorb those kinds of reductions in their paychecks every two weeks Would change your mind and stay with us So we're trying to address it from a dollars and cents point of view We're also trying to address it from a recognition point of view We we on April 11th held a service awards dinner We did it on the cheap because we don't have a lot of money to spend to do that But we thought it was important enough to recognize That the years of service that our employees have given us and and I was so impressed that that night We had 955 years of service being recognized people who had We're celebrating five ten fifteen twenty. We had one employee celebrate 50 years of service with us And she's still with us so We're trying to do both monetarily by Stating the salaries as well as non merit monetarily by way of recognition and encouraging people to stay it's it's not an easy task because of You know what we're facing. We're trying to be very transparent With our staff and we're keeping them apprised of where we're at financially So with the transparency with the staff are you conducting town hall meetings? With the staff we are we're holding What we call our employee sessions I hold them around the clock As well as we were we go out to the various clinics that are part of the FQHC So yes, we're holding those and matter of fact. I have two more set up for May Seventh and ninth, I think it is but we're trying to hold those about every three weeks And is the community being gauged so that the staff and the community can be part of the solution moving forward? Great point. Mr. Chairman. We had several of the community leaders come in and Have a session with me and with Josh to frame Just a week or ten days ago And we're planning to hold that in later May the whole that's a town hall meeting with the community And bring the community up to date where we're trying our best to do that as We can through communication You know with the newspaper Primarily and on our website Okay, another question that dr. Holmes had if you take a look at The non-operating income that was shown on slide three and then compare it To the statement of operations in the finance committee minutes It looks like the non operations income had been going up between 2016 and 2018 But now appears to be heading in the opposite direction of $1.7 million swing From the 2019 budget What would explain that I can answer that question So at the end of September well actually when I arrived in mid December the hospital had about 12 million dollars in investments Which was generating the non operating income for the most part there were some contributions in there But the bulk of it was related to investment income So as I had mentioned earlier we had to pay down some current liabilities very quickly in December So we liquidated a large portion of those investments Well, if you remember what the stock market was doing in December that was a bad time to liquidate That was at the bottom of the market and of course we're required accounting wise to To state what the market values are like at the end of December and then we liquidated literally the end of December So we liquidated at the low in the market. So we basically locked in those losses of the investments And so that's the big number that's in it showing up right now is a big negative. It'll be there the rest of this year Has there been any reduction in community support I'm not aware of any major reductions community support from a donation point of view. Yeah, I'm assuming that Like any not profit institution that yeah, there's fundraisers. I know years ago. There used to be a coutillion down there I don't know if they still do that No, they're there we really haven't had much activity in that area There's just a lot of uncertainty about the organization in the future of the organization that that people aren't Really willing to contribute right now So we haven't seen a lot of donations coming in as typically we'd see which is unfortunate You'd like to see the community get invested in the turnaround Mike when when I went down and met with you in Springfield you Express some frustration about the systems that were in place to give you Adequate information so you could make the right decisions. Do you feel like I? Can say did Wayne Change that so that you now have better information so that you're you're confident now in the decisions that you're making being the right ones I'm definitely more confident than I was when I met with you then Wayne has done a phenomenal job and Making sure that the accounting systems are Giving accurate information and we're making all the proper accruals and so forth that we should be making The concern I continue to have is in the IT area our Information technology systems the organization apparently was considering making a change Shortly before all of this kind of fell apart And So there wasn't a lot of investment put into the IT system thinking that they were going to be changing to a new one We don't have the wherewithal to change to a new one So we've got a an IT system that is kind of patched together And so there's I still have a lot of concern about how well the IT system works But I'm a whole lot more confident that the numbers that we're getting from the IT system are accurate One of the questions that I had that and I know Marine and I were trying to figure this out a year ago, but When Tim and Scott and Josh were here last August they talked about The huge hit to the employee self-insurance and and in We then looked at your 2017 audit and it made reference to having insurance to Have a stop loss and then Tim and Scott had made reference to joining Mia which would give them access to reinsurance and then today again you talked about the employee benefit side Coming in over what had been budgeted. Where do you stand with reinsurance work? Basically, there was a period of time towards the end of 18 That because we weren't timely on paying our basic insurance premiums and claims not premiums but claims That the reinsurance company was refusing to honor the contract that we had with them We've been able to get that straight in doubt So we did get some reinsurance monies come in just recently On claims that pertain to the 2018 year We're still having high utilization of our health insurance plan by our own employees. We also had Several I'm trying not to disclose names of any sort because I don't know the names But we had some employee health claims that were called Lazard meaning they were not going to cover These as outliers and they were large outliers that I don't know how I don't know the details Look how they knew in advance on our policy But when those large claims came in those were paid directly out of pocket So we didn't have any reinsurance to cover those large claims So that's part of why the high cost continued again this year So your reinsurance doesn't cover those outliers. No, sir. Wow. Okay, okay As you can imagine and I think I forwarded One or two of the public comments that we've received over the last few months. We have been hearing from the public on different things and One of the more recent Messages that we received was trying to get answers on the emergency department and it appeared that It was very logical for you to save money by switching to blue water but this Email seems to assert that there are now additional charges that blue water is going to be able to incur That may end up making it not a saving so I thought maybe you could address that in a public forum because they're saying that You're authorizing blue water to do Split fee or facility billing that they will be Directly billing for and receiving payments not going to Springfield Hospital so that those charges are not being counted in the equation Well, let me tell you there there is a change in the way the billing occurs the previous Provider of emergency services that we contracted with we did a combined bill we would bill for both the Hospital piece and the physician or professional piece The new contract with blue water Allows us to only bill for the hospital piece and Blue water will bill for the professional component Now We have the ability to comment on whatever charges they're setting But they do their own billing and and they do their own collection and They will follow our Charity policy so if we determine a patient who comes in and qualifies for charity care According to our policy blue water were on or that and will not You know charge that patient either so I don't know Why the person feels like you know, there's going to be additional fees They it should be just a split between a Getting a bill from us, which will be significantly lower Because it doesn't have the physician component on it and then a bill from blue water as the professional provider well, I think they also reference that there had been a press article that Someone at blue water had said that they would be able to come back and do additional billing To you as well. Is that the case? There there there is the ability in the contract For them to take a look at how much they Anticipated and we agreed to them generating in revenue and if the for some reason the because they're billing Themselves if if they don't generate a certain amount of revenue There's going to be standby costs that you have an emergency room for having physicians there If they can't build the revenue then yeah, we're going to have to share in some of that Shortfall that they come up with but that's pretty typical Convent agreement with any hospital that has this kind of a there is some risk There is some risk, but yeah, we think the numbers that we're projecting and using for the our emergency room We have a very busy emergency room. I Was pretty surprised when I came here to for a critical hospital that size We're do about 15 16,000 ER visits a year, so it's a pretty busy ER You had done two different slides on the expense reduction and on the FQHC slide Which we do not have regulatory authority over but can you tell us if that creates a positive margin those reductions? We're in the process of pulling together the 2020 budget right now We're a little shy of with those reductions. We're a little shy in The rest of 2019 of being a break-even we believe we should be able to get The FQHC to a break-even in the year 2020 So you believe you're on the path to yes So I think with that I'm going to turn it over to Maureen next and we'll just work our way down the line Sure If you could put the P&L slide back up again And Just and I know you guys inherited this so you know appreciate you coming in and talking to us about you know where things stand but a couple questions on when we look at the 2019 projection and focusing on operating expenses the 61.3 million projection that you have is only slightly below the 2018 audited numbers and Assuming does that include the a little over two million dollars that you're saving this year on your cost-saving initiatives Let me address that To be honest with you when I put in the projected numbers for 2019 It's based on the monthly report Where I produce what our financial results were for each month. I think this probably came from the February file I don't know that you got March in time for this meeting, but When I got to the projected column I mean this is very high-level information At this point in the file itself There's not a lot of detail and and I'm not I haven't I don't have a system in place for projecting through the end of the year So I tried to sort of eyeball how much the savings would be based on the improvements that we're doing and At the end of February, which was the month I was working on We were still working on the plan of what the reductions were being so it was a pretty raw estimate that I was using so I did Tried to fold in the savings as best I could at that point in time As the months go by hopefully I can refine that better, but With that caveat, you know, there are some savings in there And I have to go back actually took notes on my file that I sent in I don't know if you noticed them in the margin, but I tried to explain why I did what I did That's the best answer. I have on the projected numbers Because it seems like it may even go a little bit higher in expenses because you're giving back some of the salary changes, right? And you said that might be about 400,000 Yes, ma'am that that would probably be accurate because the time I did February We didn't even know we weren't even talking about the salary changes giving back at that time Okay, because I first I just want to back up a little bit to to what, you know, we've received You know from the board because For the past several years This hospital has fallen Far short in the top line and then have not been able to correct the expense Accounts and have created a loss. So in 2017 The budget for NPR was 59 million and they came in at 52 million in 2018 the budget was 59 million came in at 53 million and I know personally I really challenged the submission at that time and The fact that expenses need to be right-sized to where the revenue line is going to be and that it can't we can't look at Optimistic Forecasts as you guys brought up as well in 2019 again The forecast was 59 million and at that time the hospital was showing a small loss for 2018 and a slight reduction in where they said the top line was going to be and So that puts us in a really challenging position if the information that we're given Has not been updated and Wayne you actually referred to well if we had seen the liabilities Maybe we would have seen some of this and I I challenged that because What we were presented was a completely different forecast with a much higher top line a very small loss and We continued to challenge is this realistic They brought up the orthopedic and that that's how they were going to get there and you know There has to be some trust between the parties, but it is quite challenging when When we don't see that so my question now to you guys on 2019 and where we're going with the cost savings It still doesn't seem to be enough and I know you're still projecting and you're looking for six million dollars Potentially or you have on your list here. I think four that will be for the hospital and if I'm reading correctly for 2019 You were getting about two million in savings and you're either losing it all back to Inflation or other cost changes that are going in there Because your costs are going to be about flat with 2018 and I fully understand in 2018 There were a lot of things that got trued up so the health care expenses got trued up and so now we should be working from that base and You know, we're staying about flat and so, you know The concern is have we gone deep enough even with the cuts of people? I mean, it's tough to do that but you don't want to continually have to keep going back to the well and and making cuts there because that's not good for morale and where are we going to be in 2020 with the cuts that you're projecting because running another You know now a seven million dollar loss with the other issues you have with selling off the with the 12 million dollars in Assets that were sold off and they understand that, you know, where is this going? So, you know, I I think there's more information that you could provide us on an updated cashflow forecast an updated balance sheet because You know where you have said we could see things on the balance sheet We're not seeing a new balance sheet So I think we do want to see an updated balance sheet an updated cash flow and a proformer projection for where 2020 is going to be and are the cost savings going to be enough to get us there I mean, it's it's it's challenging. It's unfortunate It's just the top line Has continued to go down from from if we actually look back even to 15 15 was a 55 million and then 16 went to 53 and then 17 went to 52 but the organization didn't shift for seeing that change and things going down and Expenses kept going up. So I know you guys are looking at it it's just we have been Challenging this hospital for the past two years to really get the expenses in line with where the revenue is going to be and to put realistic forecasts up there and This forecast is even two million dollars lower than what the staff presented which showed the 56 million Which I said, you know, how are you going to get there when you're only trending 2% ahead so far? And this would correlate with about that But I just challenge whether you'll even be at 54 million and then you have an expense base. So really focusing on the expenses How much do you think we can get and when will we see that and when would we see a break even, you know in the hospital? Yeah, I hear I definitely hear what you're saying and we're working every day with it Do I believe there are additional areas that we can find cost to a great magnitude on an individual item? No, I think we've looked at just about everything we can look at we're looking at Tweaking here and there a couple hundred thousand here and there and a number of different places we've We have done projections And Those projections run from May of 2019 to April of 2020 They do not indicate that we're going to have a P&L positive yet But we will have a positive EBITDA a little under a million dollars So it gets back to my comment earlier that We think we can get the organization to being Cash neutral or a little positive on a cash flow basis. It doesn't deal with our debt Either past debt or going forward debt and that continues to be an issue that we're working on and that's what my slide about strategic Was intended to talk about is how we're going to deal with the debt So if we're successful, I know I'm rambling a little bit if we're successful I think we can get the organization to a positive EBITDA number I don't think we're going to be able to get the organization to a positive P&L number in the next 12 months No, and if we you know if we've got if you got the positive, you know EBITDA numbers You know that that's going to be important to get there. I just Challenge whether the savings that you have on the table are going to be enough to get there And I understand what you're saying you've taken the big lines and you think it's only small Dollars from here, but it seems like you need another couple million dollars on that list to get there to fight inflationary issues that you have as well because It looks like you were offset basically your whole save this year With additional expenses, so I'm not sure even if you perform and said you're going to get another couple million Law a couple million in savings. That's going to get offset by additional expenses And you still could be showing a three or four million dollar loss next year Well the Hate to be dramatic, but if we do show a three million dollar loss, we won't be here next year Because we don't have we don't have the reserves to cover a three million dollar loss by ourselves No, and so it's it's the challenge of Can you go how can you go deeper in order to get there because I'm Just seems they're still Optimism and possibly both the top line and where the future is going to go and are you offsetting inflation costs? Because it's great to see a cost savings of five million But then where the office offsets you have cost increases too that are rolling through there I mean, I know these are all things you're focusing on. I'm just you know just saying You know, it's it's a real challenge But if we don't go deep enough then it potentially could be another loss of two or three million dollars Which would be unsustainable and so it's that tough dilemma of how do we make a change because We're probably not going to get it on the revenue side. I mean, you know, we're doing even if assuming we approved the five percent in insurance increase that's about half million dollars and You know with what's going on as you've been saying or the community members all coming there I mean, that's tough too because people need to come so you can get the revenue in the door But if those things are are Unpredictable, but it's probably going against you so that your revenue may be coming down that way and you know At some point the expenses have to be equal to the revenue or you know, we're not going to make it So I appreciate the path that you guys are going to get there. I don't think you're there yet and And and you know, so what are the other options because we don't certainly want to be sitting here in another six months or a year We couldn't do it. We're losing another three million and it's not sustainable. So I Think again back back to my slide on You know the strategy, you know that we're working at I mean you're absolutely right We we we are not going to be able to We're not going to be able to do this alone We're not going to be able to Cut ourselves to sustainability If we can't find ways to generate additional revenue I'm not sure how much more of Big dollar expenses we're going to be able to take out so That's where partnering with somebody who might be able to Share some of that cost And make The organization Sustainable by being a part of a larger system is part of the strategy that we've got going forward We just need to be able to buy enough time to do that because those kinds of negotiations don't happen overnight Thanks So I do want to thank you both for taking on this heavy lift This is you know as we do our own dive into the numbers the the task is formidable and We all hope you well and wish you well I'd like to I'm just want to reconcile two different documents if you could turn back to slide three and up in the right-hand corner You have two projected numbers for fiscal for 2019 one with out the increase and one with the increase and In Adaptive the information that you sent us with adaptive the 54 million old 57 number included the $480,000 increase in the in the five percent commercial so and if you look at the delta between On your chart between the Without increase and the with increase that number is exactly 288,000. So I'm just wondering whether There's been some double accounting here I've gone over this with our staff and it was a was a Question that we couldn't answer but it does appear to me that there might be about $488,000 of double accounting on the revenue number because the in adaptive with the I'm looking at the far-right-hand column That is clearly the projection with with the increase and you can see that the net present revenue is 54 million 57 so it's just something to check But I couldn't have been figure out how to tie those two together and neither could lower your Agatha Another in so many of these questions that I had have been answered Kevin and Jess and and marine do a great job the next one I have is on Payor mix so I'm looking again on on your adaptive pair mix table and Just kind of trying to track how this is changing from where the budget started to where we are now in terms of of Your mix of payers and so in the original budget the Medicaid revenue Was budgeted at expected at 12.4 million dollars and now that projection is down to 8.2 million and for Medicare that the Current projection is 17.1 million I'm as compared to a budgeted amount of 22.4 million On the other hand the commercial side has gone up from 25.2 million to 28 0.3 million and To 28.8 million inclusive of the rate increase at 488,000 So that puts your pair mixes migration from commercial from 42.8 percent to 53.2 percent Medicaid from 19.3 percent down to 15.1 percent and Medicare from 37.9 percent down to 31.7 percent and I'm just wondering What thoughts you might have about this? evolving Payor mix that may be helpful to you or may not be helpful to you That analyzes it some more I just They're all they look they all dollar wise they all reduced because we know our volumes are down Say that the mix they'll we're all dollars or reduction look like on all three categories But you're saying the mix percentage wise change between them from where you started in budget the Commercial mix has gone up both in percentage wise and in dollar wise from a dollar perspective it's gone from a budgeted amount of 25.2 up to 28.8 million and Inclusive of the of the rate increase and I'm just you know This is the revenue side of of your operation and I'm just wondering if if you think that this change in pair mix is helpful Because there's more commercial. It's more heavily weighted toward commercial or Is it maybe not helpful because Springfield? You did have the highest percent of Medicaid of all pair mitches across the stages because of its demographics I Guess the best thing I can say right now is I would like to go back and relook at the projection members To make sure they're accurate I'm not sure those are numbers are accurate And those are the two questions I had left over after my fellow board members proceeded me Nice to meet you and thank you for coming today I had some questions on the staffing when Sorry, I have notes on two sets of presents of your presentations So I'm going to take me a minute to get my stuff together. So on your slide 10 Where you have both the reduction in force in the turnover You indicated that the turnover on this slide because it's a savings represents Staff who's left, but who you will not replace Can you give us a sense of the turnover for staff who have left who you intend to replace just in terms of How many folks are we talking? Sorry This one It would in in general high level It would be Everyone except for the administrative and the management personnel So 25 we would try to do without 55 or so 52 whatever that number differs in would most likely be the Positions that we'd have to replace we're we're running extremely tight right now in all of our Patient care areas in terms of staffing we Had a couple of days where we had to limit the number of admissions and that's not what we want to do Because that hurts the revenue side obviously But we're not going to do anything That risk patient safety and patient care So we're gonna we'll have to cut back the number of patients we can admit if we don't have enough nurses on the floor Thank you, so does this chart include both the reduction in force as well as the Voluntary Recognitions. Yes. Okay. Thanks. I wasn't cleared and so to getting back to your discussion about Needing to limited missions. Can you talk a little bit more about what you've had to do so far to manage to your staffing? Well essentially is We've been able we've been successful that Convincing people to work extra shifts Several of the of the people who left us because of the uncertainty of The future of the organization has have been willing to come back in and work per diem shifts for us So we're primarily Sticking the finger in the diet by doing those kinds of measures of attracting people to come back on a per diem basis or To work extra shifts And I think our leadership Senior leadership in that nursing area has done just a phenomenal job in working with the folks one of the things if I can get away from from a Quaint a quantitative comment into a qualitative comment I don't think I've been at an organization And I've been like I said 40 years in health care in an organization that The staff so cares about each other In in all of my discussions that I've had with them they truly they say it and they truly mean it they are a family and And so I've seen nurses willing to take on additional shifts When it's not been in the best interest for them personally to do that But they're willing to do it. They really care about the patients. They really care about the organization They care about the people that they work with so that's how we've been doing it. It's just kind of piecing it together We're hoping that by Some of the actions that we we took towards the end of February where we reinstated the nurses salaries back then when we saw a lot of people to party So we quickly shifted gears and I took a little criticism for that because People said to me, you know what you're doing, you know, you're announcing a reduction in salaries now You know within a day's you're putting it back in there. Well, we had to do that and it helped a little bit But it's a it's a day-by-day activity right now Well, the Springfield community is very lucky to have such a dedicated staff of folks at the hospital there In terms of I had another question about some of the Modeling that you've been working on in your sift in your January 9th letter to the governor You indicated that you were going to look at some cost report modeling And I'm assuming you're talking about the Medicare and Medicaid cost reports I wonder if you could talk a little bit about that modeling that you've been working on or other modeling To to really kind of drill into the operational changes Yeah, I think probably what I was referring to there is is quorum has been successful in providing us data along service line analysis And it uses a cost report as a basis for doing that And it's a pretty sophisticated way that that's how we could identify that earlier number on the Chow birth It was a service line analysis work that we did there They also identified some other service lines that We don't believe we can get out of that service line But we can tweak it a little bit. So That's what we've been using to focus in and give us direction on where we need to Hone in and I can use the term peel the onion back a little bit by major service line areas That answers your question Thanks Sorry to jump around but I'm as Tom mentioned folks have asked a lot of my questions as well So I'm trying to just get down to the remaining few In terms of the expense reductions in your in the Springfield Hospital financial statement audit from very done One of their notes Which is no 14 talks about The agency of human services advancing the 800,000 to the 800,000 to the hospital Following ratification by the board the board of the hospital and SMCS of at least 6.5 million of specific savings to be implemented no later than April 1st 2019 I Was I just wanted to ask you a little bit about that because it looks like you've identified That amount in future savings, but From your chart, I assumed the annualized figure really was looking more towards The end of this calendar year. So I just wanted to check in with you about that to make sure that We were still on track Did you want to if he does he's gonna get sworn in So if you could get raise your hand That It was adequate and kind of feels like a follow-up practice. It's really, really proper. It's up to Kevin. Well, since I just came from a dedication in a building in your honor, I had a time to do your sandwich, go ahead. We never had to cook. I don't know the answer to about one thing. It's like three. And today is also the question of money. The operating expenses, when sold to Mr. Jackson at $61 million in 2003, I understand you say that was based on actual expenditures at the end of February? Well, I did fold in some of the savings that I knew at that time. Yeah, and that's sort of my point. If you then go ahead to the savings slide, it's $7.5 million analyzed, so it's $2.5 million. Get that all together. The $2.2 million here are the end of fiscal year. The next slide, the $1.4 million, that's $3.6 million. We've actually built into that projection. So, naturally, my point back, if I could, by the way, to comment, the state of Vermont has been obviously very much the Governor's Office and the Secretary of State and what's going on here. We've done really weird boardings on behalf of the Governor, only strongly to encourage the board to hire them. And I hope you have a sense, I've come to have a sense that these people are honorable, free, thoughtful, experienced people that they are. So it's kind of like you heard them, you make really hard decisions. And they're doing it. I'm not saying that they're all done yet. I think they're still making more of my decisions in order to do that. I've seen the projections for the tax flow, for evidence, getting to balance. They're still being refined and solidified, but I'm frankly quite hopeful about those. And that is the time in my view, but it's my set that does not get us the possibility on a CLA. And that does require for the tax, and it requires a partner. And those are on the board right now, and I personally and cautiously talk to them about that. It hasn't happened in a very, very, you know, fragile situation, particularly, but I think I see, I don't like that he attacks board that can be discussed. And that would try to bring to a community to learn. Not done yet, but as you think there's a way to do it, and they are looking for those that help, and you guys obviously do it today, to help us get another example on the way. Not out of the way, but out of the way. Before I turn it back over to Robin, and since people may watch this later on on Orca, and may not understand what EBITDA is, it's basically a cash flow, and it's earnings before interest, depreciation, taxes, and amortization. So it basically isn't what you would see on an audit statement, but it's an accurate indicator of the actual cash flow going through the institution. So Robin? I just have one last question, which is related to slide 13 with the other strategies and activities. And to Maureen's point that she made earlier, at what point do you start looking at even more aggressive strategic planning? For example, really drilling into which service lines and services absolutely are essential to the community, and is there a different way to provide those services in a less expensive, intensive manner? Understanding that you're pursuing these, these may do the job. If a relationship comes through that, obviously, as Tom said, could turn things around. But should these all fail? At what point do you start looking to a more, I'll use the word creative solution to address the community needs? Well, let me tell you what my thought is, and that is we are basically approaching this simultaneously. We're looking at those services, but difficult to pull the trigger until you're having conversation with the partner, because the partner may have a different opinion as a kind of services that they think we ought to have. And so we're working on it simultaneously in hopes that that partner will come to the table. But in terms of timetable, I think if we don't have some kind of a really strong commitment from a partner by the end of May, then we're looking at pulling the trigger on those other service line things to try to stay as independent and survive the best we can. But we'll know what those service lines are, because we're working on simultaneously with the other effort. Thank you. So a couple more questions. What is your continuing obligation with the Springfield Recreation Center? I don't... The existing relationship is that we own the building. Springfield Medical Care Systems owns the building. I think it's SMCS that owns the building, and we lease it to the operating company that operates the rec organization. So we're basically a landlord. I'm sorry? Are they current on their lease payments? Yes, to my knowledge they are. And vendors and suppliers, are you seeing any flight? I'll let you answer that, because you deal with it 24 by 7. Did you repeat your question? On vendors and suppliers, are you seeing any flight? Flight? I wouldn't use that term. They're pressing for payments every day. You're still receiving supplies? We are, but there are some vendors that, as an example, will not ship today's supply until we pay the invoice from two months ago in an equal dollar amount. So we're working with those kind of vendors, and then with some of the large national vendors, have required us to have a specific amount paid weekly to them, in order to keep the supplies flowing. So it's a day-to-day challenge, cash flow-wise, to provide what the vendors want. I could give a long answer, but that's the short answer. Okay, but you're able to cobble together sufficient supplies to meet the needs. I believe we are, unless Mike is hearing something different from the managers. Okay. Are there any other questions from the board? Now I'm going to ask Agatha and Lori if they have any questions before I turn it over to the public. Thank you. So at this time we'll open it up to public questions or comments that should be directed through me, and see if I can read the writing. I'm not sure if it's Ted or Jed Cote. Oh, no. Okay, got it. So Marvin Malek. Did you guys have written down a public comment? First of all, due to shortages of nursing staffing, we have limited the capacity of a number of patients we can accept under the medical surgical unit where I work. And I'm one of the many providers on the physician on the hospitalist team, and I am taking more shifts than I want. So I'm doing my part to try to keep things going until we can have luck with recruiting. But I do want to say about recruiting that I really think it would be a really good investment for the state as a whole to develop Vermont Health Jobs website where every physician practice, every hospital could post a job. I don't even know if it would take one full FTE to run such a website and put out enough publicity so that people around the country know about it because we are getting killed on recruiting costs. It's painful to me. One of the reasons I work is because I know, so I didn't agree to work some other shifts that the administrators were trying to get me to work. And I know exactly how much the person who's going to work that shift is earning. It's $1,200 a day extra. Every single day that I say no and I feel terrible about it. And these recruiting firms, they basically have a functioning cartel. They all charge almost exactly the same thing and it's a lot of money. It's nearly double what the regular staff members earn. The same firms also work as recruiters and the standard charge if they identify a physician who signs a two-year contract is $40,000 one-time fee. And that's a lot of money. And I think that if the state of Vermont, I don't know which agency would do it, but I think if the state of Vermont took that on, those little $40,000 payments add up. And the same website could do short-term employment too and we could offer amounts of money that are more reasonable. So, you know, you talk about cutting services, but I'm looking at the day-to-day accrual of expenses and revenue. You talk about cutting service lines. What do we do? There's not that much done at Springfield. It's primary care and it's basic hospital care. Because of shortages in nursing and nursing staff over, staff turnover, I'm really worried that our surgical volumes are going to, our surgical revenue may really drop because they don't have teams that they, on many days that they feel comfortable to really provide the patient care at the standard they want. So they limit the very strategic about which days they may do an operation and we really need high quality staffing. And I think one of the biggest mistakes the hospital made was to get rid of its ICU five or six years ago because then the surgeons felt comfortable. They felt like they had the team. And so, I guess the last thing I'll say now, I may want to say more later if you'll allow me, but one of the things I strongly encourage you to do, or two more things, one of the things has to deal with software. In 2012, I met with several members of the Green Mountain Care Board at different times. They were following the rules about public meetings and encouraged them that they set a deadline of eight or 10 years to have a single software system for the state. And they didn't do it. And now we're sitting there with multiple different softwares that the software in our emergency department is completely not communicating with the software on the medical floor. That in turn doesn't communicate with any referral also with anyone in Florida who are snowbirds who may be coming up. So we rely heavily on fax machines even internally, it's a struggle for us to get all the information we want to in a timely fashion. The clinics even use a different form of software. The solution to this was going to have a very expensive vendor who, software vendor who is going to charge us a lot of money but at least we'd have a single system. So this is an outflow of money that to me is as painful to watch as the recruiting costs are. And I think if the state, at some point if the Green Mountain Care Board and the leadership of the state says we have a 10-year plan to make the CEOs come to the table and come up with a plan so that we're going to do something with software that will work for those of us who are trying to provide the care to our patients. I need to know what's going on at UVM when they're there or at Dartmouth and I can't know. And this is not working out. One of the other things I would say is that I hope that you get residency-based data on healthcare expenditures for Wyndon and Windsor County and see if the drops in our revenue are going to translate into lower overall healthcare spending. And I worry they will not. In fact, I worry it may be the opposite. So these people are going to end up at Dartmouth. We may even see more revenue, more costs. So this is one of my big worries. You may want the work done at Springfield. And so anyway, those are my comments. Thank you for taking them. I appreciate it. Thank you, Dr. Malik. As usual, your comments are very well. And, you know, I think back to the days when we were first talking about vital and efforts by those of us in the legislature to try to dictate that it would be the common software and being told that federal laws prohibited that. So I can see that, I see the frustration in your voice and I share it because if we had only had one system, if the state had only gone out and bought the system for everybody, we would be so much further ahead today. You're absolutely right. So I just say that I share your frustration. You know, workforce is something that is, I think, the biggest crisis in the state of the lot. And if we don't start figuring out how to turn out more doctors and nurses within our own state's education system through the state colleges and universities, we're in trouble. So, other questions or comments from the public? Ham. Mr. Chairman, I wonder if you could talk to Ash White and also maybe talk to him. Hamilton Davis. Yes, that's true. Mr. Chairman, I wonder if you could ask the Chintley, Mr. Ballstead, and if it's also involved with Tom, I have to say, the obvious issue here is whether it's a partner. And if we clearly need a partner, then the question is, the obvious question is, well, who is the partner? And the obvious partner will be the best. It's not going to be the best. I think that's pretty obvious. And what I'm curious about is, in the buzz, which is not official in any way, what we heard was that Dartmouth has told Springfield that they have to go through Chapter 11 before they'd be willing to sit down and really decide what to do next. And I wonder if you could talk about that. What is the real world chance for a partner? And what does it say? We'd also get to Maureen's question because, and the question of debt has already been dispensed. If I understand Chapter 11 correctly, which I may not, if you go into Chapter 11, the main protection you get in that process is protection from your debt. Thank you. So, Micah, you know, you have to protect the organization that you're working for. And I don't know if you feel it's an appropriate question for you to answer when it comes to those two questions, which really were about bankruptcy filing and a possible future affiliation. So I'll leave it up to you if you want to say anything. Yeah, let me try to address it this way. I think first, relative to the partner, anyone that we spoke to very early in the process said, you know, you have some financial challenges that you have to really wrestle with. We've wrestled with some of those. Haven't done it all. As Tom mentioned, we still have a ways to go. So what our intent is now is to go back to those people that we spoke to, Dartmouth being one of them, and say to them, okay, here are some of the things that we're doing and we're beginning to show the results of those. March results are much better than they've been in months and months and months in terms of the operations. Maybe their perspective on the situation will change as a result of that. Don't know. I can't speak for any other partners on how they'll view it differently, but I believe they will. So I think there'll be a stronger interest than the initial comment to us was, you know, you got to straighten out your financial situation first. Relative to chapter 11, that's always a strategy that we've looked at from the moment I got here in the organization. That is one strategy that an organization can take. But with that kind of a filing and that kind of a process, you have to be able to show that you're a going concern after you come out of that process. And so, you know, every day we're still working on that and fine-tuning that. And so, has a decision been made to do any kind of filing? Not yet, because we don't know how we would fare during that filing process. But each day that goes on, we get a better view of the future, what our changes are going to produce and what our position is going to be. And it's probably going to be a combination of those strategies. Like I said earlier, we're partnering with some kind of a filing. There isn't anyone out there that we're aware of and we'd sure love to know the name of it, who would come in with their open checkbook and fix us. We're going to have to make every effort we can to fix ourselves. But by doing that, we become much more attractive to a partner. It's clear that there are different types of filings that can be filed under the federal bankruptcy law. And one of them really is a dissolution and nobody wants that outcome. And Mike is completely accurate that when you're trying to do a restructuring, you have to have a solid plan where a judge has belief that at the end of the day you're coming out and you're going to be sustainable in the future. So I'm sure that there's still a lot more work to be done before there are any type of decisions that could be made. Other questions or comments from the public? Jeff? This is the public comment. This is the public comment as it goes to enforcement. But you can see that clearly everything is interrelated. So just a couple quick notes of thank you. Yes, my name is Jeff Thiemann with the Vermont Association of Hospitals and Health Systems. And I just want just a couple thank yous really. I want to thank Mike and Wayne for coming to Vermont and doing Yeoman's work to try to turn around a struggling institution that matters to our entire state and doing so responsibly and ethically and smartly. So thank you as well to Josh Newbrink who continues to work at Springfield with the commitment of someone who's been in that community for his entire life and is working hard to write for the institution as well. Also to thank Tom Huebner for his work having been appointed by the governor to serve as a liaison. No one better in the state to do that. I think all of us would agree and so just to thank Tom Huebner for his work. And then Steve Gordon who's here as well from Red Elbrough Memorial Hospital for stepping in to help with OB services and perinatal care to ensure continued access for women in the community. And then last but not least this is a really hard set of questions and considerations and we appreciate your thoughtful attention to this side of the issue. Thank you. Thank you Josh. Other public comments or questions? Dr. Malek? It's a common one. With the elimination of our child care unit and obstetrical activity at our facility we worry that it's one of its ultimate effects will be losing pediatrics and gynecologic care making young people view Springfield a little less favorably as a place to move to so that has worried the community and I guess my question is what role okay so you have a certificate of need process when an institution wants to add a facility so for example Rutland Hospital is now putting in a huge specialty facility and right and what about a process when a community wants to get, when a hospital is proposing to get rid of a potentially valuable service and I guess my comment to you is for your consideration is whether there ought to be a process that does involve representatives of the public in the Green Mountain Care Board so that's one question and the other I have is about the role of Dartmouth Dartmouth is very good about accepting is very tuned into functionally is very tuned into getting procedures done that get them a lot of revenue and then they'll often send patients back we tend to get less help when we have a complex medical patient who doesn't need any procedures being able to accept a patient who may need multi specialty care so I just wonder the two parts of that is that it doesn't seem that the incentives have changed we have an unfavorable payer mix and when you talk about eliminating service lines we have an unfavorable service mix we're not providing procedures that that much elective orthopedics or elective gynecology elective type procedures that still despite years of talking about payment reform despite all that talk nothing that is really changed when I provide care to a profoundly deconditioned or overweight person who has cellulitis and we need a lot of care just to move the patient around just to get through the day the pressure sores from developing we're losing money whereas if I come in have a little wrist operation to the orthopedics department that Rutland's putting in or that Burlington or Dartmouth have that's quick revenue that charges and the revenue are much greater in the cost of providing the service so there aren't any service lines all of ours are unfavorable and nothing much I'm just wondering how the Green Mountain Care Board views that and then the final question in terms of the role of the Green Mountain Care Board is delegating a lot of responsibility to an out-of-state institution in the form of Dartmouth and the comfort level with doing that and how well they'll represent the interests of the population of Vermont so you'd get five different opinions to just answer this question but I can tell you that I think that obviously we would prefer to keep services in the community whenever possible we want services to be in the right setting so that people aren't driving and in order in the amount of time when it comes to a reduction in services nobody would like to see a reduction we wish that the population was growing in Vermont on the same token tough decisions have to be made I commend people for making very hard decisions because if you don't make those hard decisions then ultimately the institution fails and with Jeff Thieman stood up the one entity he forgot to thank was Vaz and what they have done is all the hospitals in that region have gotten together and worked on contingency plans on how to make sure that the people who are getting care for in the Springfield region would in a worse case scenario still make sure that they had care and Steve Gordon is here and I know that Steve is committed to making sure that families in Springfield get the type of gynecological care and such so that birthings go smoothly and Steve I don't want to put you on the spot but do you want to say anything would you like I would Steve Gordon first I want to commend Mike and his team and Josh when we first started hearing about the issues at Springfield I reached out to Josh and Mike and to come up with a plan as they had made it for the board was making a decision to close the OB unit there how we can help and we have four obstetricians in a full midwifery program and what we put out for the Springfield board to consider is for us to establish a site in Springfield where we would keep as much of the services as possible with the exception of deliveries and the deliveries would be a proud of us and just last week we were there Josh shared with us a great location for office space so it's really a commitment of the hospital the commitment of our OB-GYN physicians and midwives to that community to keep as much of the services within that community where the doctors are applying for GYN surgical privileges for those OB patients that require or would like their GYN services by our physicians in Springfield ultrasound laboratory services as many as the services that we can support for Springfield it's 45 minutes whether it's 45 minutes for us in Bradbury 45 minutes to Dartmouth-Pitchcock with public people our commitment is to keep as many of those services in that community to help that community sustain a hospital at some level and I think that's the kind of to Jeff and especially to Tom that's what we're trying to do from a neighboring hospital and I knew others as well as Dartmouth are looking at what other services but part of that is taking Mike's lead and really the board of Springfield understanding what they see the future of that hospital and what it might look like as we've all talked about we're going to work different and I remember Maureen at our last we were not careful with our presentation he made some comments about you know, our efficiencies and I said well one of the most inefficient areas is OB right? We talked about that so here we have a situation where another hospital has closed and so we will be closing it and we're working together to make that some type of sustainable service in that community so these are all the questions that every hospital are going to experience every small hospital that experience is very difficult but glad we're in Vermont because it's a collaborative process, collaborative communication and collaboration as opposed to competitive situation amongst the hospitals and we've got a great time too as well with the Governor Thank you Steve and I think that's everybody's goal is to keep the patient first in the minds of moving forward to make sure the right care is happening and as much as possible right in the Springfield community so is there anyone else who has any public comment or questions? Okay, seeing none Lori and Agatha do you wish to come back up? Thank you Mike and Wayne we are ready to have enforcement deliberation with the Board and we present the same similar slides to the other hospitals that we had presentations that emphasize the enforcement mechanism that the Board is working with for this particular fiscal year 2018 and then we also like to mention that the FY 2020 budget guidance for hospitals with actual fiscal year 2018 and projected fiscal year 2019 MPR FPP that is at least 2% below the FPP the GMCB expects MPR FPP and expenses in the fiscal year 2020 budget submission to align with the hospitals fiscal year 2018 and projected fiscal year 2019 results for these hospitals the GMCB would not expect to see MPR FPP more than 5% greater than projected fiscal year 2019 MPR FPP unless there is a clear explanation and documentation describing why a larger increase in MPR FPP is justified for hospitals with projected fiscal year 2019 MPR FPP that is greater than budgeted the GMCB would not expect to see fiscal year 2020 MPR FPP greater than 3.5% unless clearly justified this information is in our hospital budget guidance for 2020 and if you have any questions staff will gladly help you we have seen we have had enforcement deliberation on all these hospitals and Copley Northwestern, North Country Gifford and Mount Scutney we are seeing the previous week so this week we are talking with Springfield staff recommend no rebases the board should consider the following factors for fiscal year 2020 budget guidance will take into consideration fiscal year 2019 projections the hospital's historical operating margin and specific causes of variance considered to be short term specific causes of variance considered to be short term staff recommend continue monthly monitoring of hospitals through recording and some hospitals will be required to provide in person updates to GMCB staff for Springfield enforcement we were looking at the budget to actual percent variance for fiscal year 2018 was a negative 10.8% and the actual to actual percent change was 1.9% this is for the NPR and FPP for their fiscal year 2019 as of February the budget to actual variance was a negative 5.4% and their actual to actual percent change was 1.6% we also showed the operating margin we had to show these in the previous slides but the operating margins were from fiscal year 2014 through actual 2018 and we're also showing year to date 2019 and then the budget for fiscal year 2019 so for fiscal year 2014 the hospital was showing a negative 3.7 over 3.7 million loss from their operating margin for fiscal year 15 was a positive 2.3 million dollars operating income for fiscal year 2016 was 181,122 for their actual 2017 was a negative 3.8 million loss for fiscal year 2018 the share under discussion was almost 7 million loss in their operating margin and year to date February is negative 1.9 million their budgeting 810,362 underneath that is their percentage for their operating margins the staff recommend no enforcement including no rebase expectation is hospital will comply with fiscal year 2020 budget guidance we're looking to the board to ask if there's any other monitoring that they would want or any other considerations and also a possible vote so similar to the other hospitals on the previous slide we would be looking for monthly monitoring which would involve either a phone call or an in person meeting between you or Wayne and myself and members of the Green Mountain Care Board staff so Maureen would you like to make a motion sure I'd like to make a motion that for Springfield Hospital we have no enforcement including no rebase and that there are monthly in person or via phone meetings for monitoring for the rest of the fiscal year is there a second is there discussion among the board I had a question about the monitoring we had sent well Kevin you had sent on everyone's behalf a letter in January that outlined the enhanced monitoring that we were asking for specifically and Maureen you had just mentioned a few other things earlier in the discussion that we might want to see and I just wanted to check and make sure that what we're currently getting is inclusive enough or whether we would need to whether there's any other monitoring that we would want at any point so it doesn't really matter perfect thank you well that answers my question I can always change the monitoring if needed so that's perfect, thank you yeah and I would just like to point out that part of the rationale for not having a rebase is administrative burden that may put on a hospital the expectation is that since right now you're trending about 5% below your budget that when you come in for your 2020 budget that it will at most only 5% over where your actuals are trending and we are going to put a lot of pressure on questions on making sure the forecast that you're coming in with is trending accurately and if that were to be the case right now then you would have a flat year over year to budget but you would be up slightly year over year over the prior year which is where you've been about up 2% prior year so that was really put in place to prevent having people to go in and re-forecast everything but really focusing not just on the budget but on actuals as well and where you're trending anybody else yeah I would just add to Maureen's comment that if you take as the current projections you know for 2019 including the 488,000 with an increase of 5% the revenue estimate that the Springfield folks present earlier at 54,057 and a 5% increase over that takes them to 56,760 which is still a very very heavy lift given the circumstances so I think that by taking this action the board has put enough constraint and pressure on the system but also keeping in mind that you know the PR 56,7 million is still quite a bit higher than it was in 2017 where they which was an actual that they faced so it does keep up alive I think my hope is that we have Springfield in front of us for many many many many more budget years to come so any further discussion seeing none all those in favor of the motion signify it by saying aye any opposed okay with that we're going to turn to the budget adjustment request we received a budget adjustment request from Springfield on March 27 and we presented it to the board on March 27 the request is for 5% increase in the hospital's average charges effective May 1st 2019 the increase in fiscal year 2019 year FPP is estimated at $488,924 the annualized increase is estimated at $1,173,417 the hospital's board of trustees authorized the request at its March 12, 2019 the reasons for the request include their financial health which is showing negative operating margins for fiscal year 17 and 18 and continuing in fiscal year 2019 despite cost containment efforts and caste position is tenuous at best they recently terminated their child birth services and reduced FTEs and salaries for a number of employees as of last year when they submitted their budget they had a proposed budget of approximately $60 million for fiscal year 18 through 19 the proposed NPR FPP growth was 1% or 621,755 their fiscal year 19 submitted change in charge request was 5% they are participating in all payers for the ACO for 2018 and 2019 the approved budget for September 12th they approved their $60 million budget and approved the 5% change in charge the budget modification before you is to which was received on the 27th fiscal year 19 change in charge requested increase of 5% to 10% effective no earlier than May 1st, 2019 so summary the financial indicators that we have for fiscal year 19 as of February is the operating margin was a negative 7.9% their total margin was a negative 12.7% the days cash on hand was 9.4 days payable was 85.5 days receivable was 62.3 so in the chart we are showing the commercial charge increase that their budget time was 5% and of course participating in all payers for the ACO and the board had decided to increase their change in charge to 5% and now we are asking for the change in charge to increase to 10% and this will be an operating loss of $1,922,875 and this is to help with the financial solvency risk so this is asking for a vote on this increase in charge so the staff is recommending the 5% increase in questions from the board the staff seeing none I'm trying to decide if I have a question I'm not sure if this is a question for staff let's get in and we can see what makes sense I assume that we have confirmed that the payer contracts allow for a change in charge to flow through at this time so Wayne have you got the additional confirmations necessary most of the insurance companies that I contacted said they wanted to wait to see what the three United Care Board was before they would even negotiate with me so it's simple actually no I don't know what they're going to allow blue cross is the biggest payer that we have with this reading between the lines it's kind of like they were open to idea but they wanted to hear what the decision is going to be made here before they talk to you about it there's nothing in your contracts correct some contracts have like a four and a half to five percent rate increase annually one other insurance company that I talked to directly told me that they'd be happy to give it to me but then there wouldn't be anything to come out close to that it would take the place of this next year's language so that was the answer I got from them and then I learned later that they were a very small part of what they were doing what a big factor that needed do you have a follow up problem? no that's not what I'm talking about other questions is there anything Mike or Wayne that you wish to say in addition before I open it up to the public before we have a deliberation I just want to say that my biggest fear is flight of people from Springfield to other institutions and I just hope that the community itself can rally and come together and the word can be spread throughout the community that every time they go to Springfield versus someplace else they've actually done something to save their hospital and to keep those services in their community so it with that being said I do worry sometimes that number might be overly optimistic what the revenue might be bringing in but I do think that everybody in Vermont should be trying to give Springfield the biggest chance that they can be given so with that I'll open it up to the public for any comments or questions seeing Mr. Chairman I just wonder the extent to which a change like this would mesh if you will with fixed price contracts through the all fair model with one care so I would you want me to try to answer that because the charge increase really just applies to commercial and the commercial agreement and Mike can correct me if I go astray but the commercial agreement is still an underlying fee for service basis so I think that it would basically would be something that one care and Blue Cross in relationship to Springfield would have to work out in terms of the benchmark but I think since the fixed prices are really just in Medicare and Medicaid and those aren't impacted by a charge increase there's no direct impact there's no actual risk to Blue Cross well there you mean to one care because it would be one care that would be the hospital would be right I mean I think that's something that they would need to work out on the Blue Cross side but Blue Cross doesn't have the fixed payments in the same way that Medicare and Medicaid do it's still shared savings and losses and there would be a separation between fixed perspective payments and those that are still those charges that are still related to fee for service I mean I just think that there's a question there about there definitely is a question it's a very good question there's obviously a shadow fee for service data that's collected and I didn't know what your staff said that 50% of the Blue Cross contracts were within in a risk form that may be wrong but the hospital is taking risk on all free payers all Medicare, Medicaid and Blue Cross if they're taking them on Blue Cross I'm not sure if they're not taking risk well that's the answer to the question so I would doubt that a member of the staff said that 50% of Blue Cross contracts are at risk there might be a misunderstanding of what the question was it may have related to strictly QHP I'm not sure but I don't think that at least I would hope nobody would say that 50% of the Blue Cross contracts are in a risk arrangement because that is not the case other comments or questions from the public seeing none is there a board member who wishes to make a motion I'll move that we approve the additional 5% increase in charges effective no earlier than May 1st is there a second it's been moved and seconded to approve the additional 5% increase in charges effective May 1st 2019 is there any discussion I just want to point out I will support this motion but we can't you know find our way there by increases on commercial you know and I just want to be on record of saying that because several of the hospitals in the state are struggling and we're not going to get to profitability by just doing commercial increases because of one you know some of the points that that ham's making but secondarily a 10% increase for people of high deductible plans you know they're going to be paying more so we're you know shifting some of that obviously to consumers as well and we need to be cognizant of that I mean I think in the situation that you're in right now we're trying to pull all the levers that we can to help turn around that you know it will be supported to do go for 10% for the full year but you know this is not a tactic that's going to get us there in the future or get you guys out so I would just like to add to Maureen's observation that if you accept the the pair mix as most recently presented by Springfield that pair mix with this increase would for commercial would go from 25.2 million 28.8 million an increase but the Medicaid expected Medicaid revenue has dropped from 12.4 million down to 8.2 million and the projected Medicare has dropped from 22.4 million to 17.1 million so those pairs you know their obligation is weakened while we are strengthening the expectations out of the commercial pair in the long run that is a cost shift that cannot be sustained I have one comment but I totally agree with what Maureen and Tom have said and I do think this will solve the problem in a long term it's not a strategy that will solve the problem in a long term fashion and in fact depending on how successful the hospital is able to be with the commercial pairs may not even solve the problem in the short term so I think it's what the lever that we happen to have in the hospital budget process that we can pull to help support the hospital in the situation we don't have a lot of other levers in our toolbox to assist in this in this particular issue but I think it's important for us to just acknowledge that this lever has a limited usefulness and is a limited tool so I would echo the fact that it's a limited tool doesn't create a lot of revenue in many respects I wish that we were getting more help from our friends across the street because just the reduction in dish payment in the last few years has been about a million dollars for Springfield hospital and that could make an even bigger impact on this but with that being said there's a motion in front of us if there's no further discussion all those in favor of the motion signify by saying aye any opposed thank you thank you Mike and Wayne we hope it wasn't too painful good so is there any old business to come before the board seeing none is there a motion to adjourn so moved seconded it's been moved and seconded to adjourn all those in favor signify by saying aye any opposed thank you everyone