Hospital audit shows system back in black

This article submitted by Molly Connors on 12/24/96.

The Paynesville Area Health Care System (PAHCS) had a 1.4 percent operating margin for fiscal year 1996.

This is significantly above last yearâs margin of negative 3.8 percent. It also tops the 1994 number, which was one percent.

These numbers were part of the audit presented last week at the Dec. 18 hospital board meeting. The jump in operating margin was proof that the systemâs investment in the new clinic is paying off.

The board decided to accept the settlement offered by the Conklin Company at the Dec. 12 mediation session. Conklin built the old roof on the PAHCS hospital facility about 13 years ago. PACHS had a 20-year warranty on the roof, which included repairs if needed.

About four years ago, the facility began experiencing problems, including leakage, with the Conklin roof. Conklin failed to respond, and last year the board decided to sue the company for the cost of the replacement roof.

Conklinâs final offer at the session was $47,500. The original cost of the Conklin roof was $94,500. The hospital used the roof for about 12 years. The Conklin side argued that PACHS got half of the roofâs predicted life, so Conklin didnât owe PAHCS the full cost of the roof.
Frauenshuh explained to the board that
extra costs would probably result from the trial. Conklin would have experts to back up their side, so PAHCS would need to hire their own experts - probably an architect and an engineer - to back up their side of the story. The cost of these experts would run between five and $10,000, Frauenshuh said.

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