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Paynesville Press - April 6, 2005

Hospital board plans clinic in Cold Spring

By Michael Jacobson

The Paynesville Area Hospital District Board of Directors took the following actions at their monthly meeting on Wednesday, March 30.

*The board approved a plan to pursue a new satellite clinic in Cold Spring following a 75-minute closed session to discuss a competitive market situation.

The Paynesville Area Health Care System, as the hospital district is known commercially, is planning to lease space in a new building on Highway 23 in Cold Spring, CEO Steve Moburg told the Press. Leasing space requires less capital outlay than building a new clinic. Equipment for the new clinic should cost in the neighborhood of $200,000 to $250,000, said Moburg, with designing the roughly 4,000 sq. ft. of office space to meet their clinic needs costing a similar amount.

Cold Spring is a growth market, said Moburg, and PAHCS already has a known provider (physician assistant Char Granite) to work at the new clinic. PAHCS will maintain its commitment to its other satellite clinics, added Moburg.

Construction of the building that will house the new clinic could be finished by late summer, according to Moburg. PAHCS is recruiting two new physicians and one would likely serve as a primary provider for the new clinic, added Moburg, who is hopeful that the new physician will be hired in time for the clinic opening.

The hospital board also met in a 75-minute closed session in January to discuss this potential lease and entry into a competitive market; CentraCare also operates a clinic in Cold Spring.

*The board reviewed its uncompensated care policies with chief financial officer (CFO) Kirk Johnson. Some health care organizations have been in the news lately for pricing, and Johnson started by informing the board that PAHCS's profit margin in 2004 (five percent) was below industry averages for pharmaceutical companies (32 percent), insurance companies (17 percent), for-profit hospitals (12 percent), and not-for-profit hospitals (5.7 percent).

He noted that most of health care pricing is done with third-party payers (either government programs or insurance) in mind, not self-payers, who make up only three percent of patients. Health care pricing designed for third-party payers may seem excessive to self-payers, he acknowledged because the system is not designed for them.

PAHCS has three programs to help self-payers, or uninsured patients. These are financial aid, discount for cash, and uninsured discount. Financial aid is a discount based on the federal poverty guidelines. Applicants must qualify financially for help from financial aid. Discount for cash must be requested by a patient and is only available to patients who do not have insurance. If they contact PAHCS before paying their bill in full, a graduated discount (from 10 to 20 percent) will be applied. Again, this is only available for uninsured patients, not for patients who want to pay cash for the remaining portion of their bill after insurance. The uninsured discount is a 15 percent discount is given to any uninsured patient.

Board member Bob Brauchler noted that it would be nice to have a program to help more under-insured patients, such as farmers who might have high deductibles to guard against catastrophic events and therefore end up paying cash for most of their health care costs.

*The board heard a presentation about PAHCS's compliance with HIPAA regulations that go into effect on April 15, 2005, from IT manager Gary Smith.

*The board reviewed its financials through February. PAHCS made an adjustment to its Medicare payments to avoid being overpaid and face a future liability to repay Medicare, explained Johnson. This $250,000 adjustment put February's financials at a loss of $81,500, despite a real operating profit of $168,500 that month. PAHCS still has a profit of $526,900 so far this year.

*The board approved promotion of Jennifer Dean Dwyer, P.A., to the active medical staff.

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