County commissioners pleased with hospital improvements

“This path is going to take us great places”

The Gunnison Valley Hospital board of trustees and hospital leadership met with the Gunnison County Commissioners on Tuesday, February 12 to discuss hospital plans to hit a positive bottom line of $394,017 in 2013. That goal comes after posting a year-end loss of $121,756 and working with Community Hospital Consultants (CHC) to develop an action plan to get ahead. The commissioners liked what they heard.

“Steady progress is the clear message we want you to hear,” said GVH CEO Rob Santilli, explaining that the hospital has moved from having 90 days cash on hand to 107 days cash on hand. He also said the hospital has achieved a debt to service ratio of 1.35, exceeding all bond requirements.
Looking forward to getting back in the black, Santilli told the commissioners that next year’s budget is based on realistic expectations informed by 2012 numbers. “We didn’t boost the numbers up or make assumptions that would not be able to be met,” he said.
According to follow-up interviews with hospital staff, the year-end financials for 2012 did include $267,766 in donations that came from the Gunnison Valley Health Foundation. But those funds came in the form of donations and grants to specific hospital programs like the I-Stan emergency education training program, and not general transfers to cover shortfalls.
According to GVH chief financial officer David Freshour, the hospital cannot use foundation funds to offset its losses. Instead the foundation board decides on an annual basis what programs to contribute to. In April 2012, the hospital did transfer funds from its own savings account to cover losses, but the hospital has since paid itself back with earnings.
In addition, chief business development and marketing officer Michelle Campbell confirmed that the projected goals for 2013 do not include foundation donations, and January numbers already suggest that the hospital is on better footing this year. Following the meeting with the commissioners, the hospital released financial results for January 2013 that showed a $344,592 positive bottom line.
In order to continue that trend and grow the hospital strategically, staff and the board of trustees will hold a retreat at the end of February.
There, they’ll put together a better understanding of the current trends at GVH and outline where the hospital should go in the future.
 “Even though we’re a critical access hospital in rural Colorado, some of the trends at the industry level we are also seeing here,” Campbell explained. “A key one is a reduction in inpatient hospital stays. GVH is also seeing that decline, and we are seeing a birth decline in our community by a small amount. We’re not sure what the reasons are. We’ll be digging into that at the retreat.”
Santilli explained to the commissioners, “If you really start with the mission of GVH, it is to be the first choice for healthcare in this community, and we’re committed to earning the people’s trust for achieving that. To do that, it is important we understand our vision—what do we want to be, what do we want to look like.”
Getting there, Santilli added, will include the implementation of new metrics and measurements, and developing more efficient “best” practices. In partnership with CHC, GVH has identified 16 categories for review and/or changes, including strategy and medical staff, growth, the revenue cycle, the supply chain and productivity.
Santilli was careful to emphasize that these improvements do not mean layoffs. “This isn’t people reduction; this is about improving how people are working smart, how hours are used in the organization and how they are effectively managing time.”
Campbell explained that one example of these improvements could be reducing processing times for x-rays. If it takes nearly an hour for an x-ray to be processed, it takes longer for that patient to see his or her doctor. If that time can be reduced to 20 minutes, the whole process is more efficient and the value of the service increases in the eyes of the patient.
By contrast, that kind of inefficiency can lead patients to go elsewhere for care, and that “out-migration” is something the hospital plans to examine closely. “We want to figure out, when people leave for care we provide, what causes that,” Campbell said.
Ronda Connaway, board of trustees chairperson, explained that by studying the data the hospital can begin to look at patterns: where patients go for treatment, what they go for and the cost difference. They can also study in-migration, like second-home owners who choose GVH for their primary care.
A key part of encouraging more people to choose GVH for care will, of course, include cost analysis. There are some cases where the price difference between GVH and services on the Front Range is so great that some residents opt to drive to Denver.
For example, a Crested Butte News analysis of MRI costs shows that Front Range prices can be half those at GVH or hospitals like Vail Valley Medical Center, the Salida Hospital or St. Mary’s Hospital and Medical Center in Grand Junction.
Using the Anthem Care Comparison, an MRI for a lower limb showed a typical low cost of $1,018 at GVH, $1,259 at Montrose Memorial Hospital and $1,277 at Vail Valley Medical Center (prices will vary—these are averages and not intended as price quotes). By contrast, a search of MRI centers and hospitals on the Front Range produced typical prices as low as $500 to $600.
GVH’s Freshour explained that the cost difference is often a matter of volume. He said the lease on an MRI runs $23,195 per month, plus about $9,000 per month in maintenance. That doesn’t include staffing. “We received no discount because we are a rural hospital and yet as a rural community hospital in a county with low population we have fewer cases per day, we have fewer collections to offset the cost of providing the service.
“For example at GVH we do an average of three MRIs per day,” Freshour continued, “while some larger hospitals do between 10 and 12 MRIs per day, so they can offer the service for less than we can. Free-standing imaging centers in large metropolitan areas operate very differently from hospitals—they don’t have emergency rooms and do not take charity care patients, so they often offer MRI services for less than either small or large hospitals.”
 In late 2009, Freshour said, a price comparison study found that GVH prices for an MRI were a little higher than small hospitals in neighboring communities. As a result, GVH lowered its prices in early 2011. In addition, self-paying patients receive a 10 percent discount to keep their MRI prices competitive with commercial insurance and an additional 5 percent discount if they pay within 30 days.
The hospital does what it can to offer affordable care, but it is difficult to compete with high-volume facilities. As the hospital shifts into strategic planning, these are the types of questions the board of trustees will dive into. For the commissioners’ part, they seem encouraged that GVH is on the right path to figuring it out.
Commissioner Jonathan Houck said he was still getting up to speed on the challenges faced by the hospital but was pleased to see the trends moving in the right direction. Commissioner Phil Chamberland commended the group for their work and invited them to discuss hospital issues with him at any time.
Commissioner Paula Swenson thanked the long-time members for seeing the hospital through a difficult time, and commended the group as a whole. “The communication has been exceptional over the last six months. We have the information we need to answer the questions that come to us. I think we’re on a great plan and this path is going to take us great places.”