The meeting was called to order at 6:03 p.m. by Julie Derry.

Present: Julie Derry     Ingrid Avril

Lorna Olson     Wendy Lefton

Steve VanWagoner     Rick Eckert

Kellie Blue

Excused: Fred Lau

Absent: Ron Alderfer

Also Present: Charles Franz, CEO

Charlie Button, CFO

David Green, SAB Chairman

Tom Walpole, Human Resources Director

Tom Craig, Support Services Director

Jan Hanenberger, Homer Secretarial Services

The agenda was approved as submitted.

There were no comments of the audience.

Ms. Derry mentioned she did not receive a copy of the article in the April issue of U.S. News & World Report Magazine recommended for reading at the April meeting. Other members said they did not receive their copy either and Mr. Franz said he would see they received it.

Mr. Franz said they had been discussing an appropriate way to recognized Board members who have served for a lengthy period of time, or have made extraordinary contributions to the hospital. Mr. VanWagoner said two suggests were a pin and a plaque showing recognition. Ms. Blue felt it would be nice to name a hospital room or wing after individuals who have given several years to the hospital. Ms. Lefton suggested a piece of artwork with a plaque identifying the person and their service. Ms. Olson mentioned if this was to be done annually Board recognition should be included in the budget. Ms. Derry asked Mr. VanWagoner to chair a committee to discuss this further. Ms. Avril and Ms. Olson volunteered to serve on the committee. Mr. Craig said he receives quite a bit of material showing different plaques, etc., and would make this available to them. Ms. Olson mentioned past Board members should also be recognized.

Land Acquisition

Mr. Franz said the recommendation sent to the Assembly is still a tabled item and he has not talked with Mr. Chow for approximately six months. He then brought the members up to date on the progress of the acquisition as follows:

The Botkin property appraised at $185,000 and an offer was made at $185,000, but the Botkin’s countered saying they needed $255,000. Mr. Franz said since the house had not been on the market they offered to consider paying for a moving company to move them if they accepted the $185,000 price but they had not heard further from them at this point.

Lots 1 through 4, owned by Dr. Raymond and Dr. Sayer, appraised at $134,000, which the hospital offered them. Since they wanted $250,000 for the property, Dr. Sayer was not happy with the offer and the property is no longer on the market.

Lot 5, owned by Mr. McGinty, appraised at $185,000. Mr. Franz said they offered $170,000 due to several problems, which needed to be corrected based on an inspection done by Mr. Franco Venuti. Mr. McGinty did not care for the offer and also took it off the market.

Lot 7, owned by the Ellis’s, appraised at $165,000. They offered $160,000 because of problems also identified by Mr. Venuti. Ms. Ellis said she still wanted $165,000. He added they are very close in agreement on this piece of property but the problem is without the other properties this property is now an isolated piece. Mr. Franz asked if the BOD would like to make a recommendation to the SAB regarding the property. He said it is isolated but could be used for office space or housing for temporary staff. Mr. Green asked if they could receive a cost comparison as to what they might expect to see in reduction of rental costs versus the purchase price.

Mr. Mark Halpin recently purchased the Riser property, at a cost of more than appraised value, and is now asking more for the property.

Mr. Franz felt once the Strategic Plan is in place they could try again to purchase the properties or request the Borough Assembly to employ eminent domain in order to purchase these properties at the appraised value. He also mentioned based on assessed value they could acquire more property in the central section of this area for less money, which could be another option. Mr. Green asked if they had taken into consideration the cost of demolition for existing buildings on the central property. Mr. Franz said they had not and this would be included in the comparison of the central properties versus the side properties.

Ms. Derry referred to a copy of the list of indicators for the quality dashboard. Mr. Franz then discussed the indicators and compared SPH’s score to national standards. Overall the hospital is doing well except for returns to the ER within 72 hours, which were somewhat higher, and each of these cases have been reviewed by Dr. Smith, the ER Director. Mr. Franz presented graphs comparing quality indicators from 1997 to the present, and it was felt the slides provided quite a bit of information. He said they track all the quality indicators on a monthly basis and asked if the BOD would like to have the report in graphic or numeric format. Ms. Olson suggested including a year-to-date area under the score column, and an additional benchmark column showing the national as well as the hospital’s percentage. Mr. Franz said he had considered adding a column showing the previous year along with a year-to-date column. The members felt this would also be beneficial. Ms. Derry suggested using asterisks with legends. The members then requested receiving quality dashboards quarterly and a printout of the graphs every six months. Ms. Lefton felt with some months having a higher volume of patients it would also be helpful to identify the number of individuals seen in each quarter.

Mr. Franz said he went through the various issues the Board will be working on and tried to spread the workload throughout the year. He then asked the members if they had any suggestions or changes they would like to make. Ms. Derry mention they had not had a joint meeting with the Medical Staff for some time and for QI purposes one should be scheduled. Mr. Franz said the Medical Staff decided not to meet in April, May and June. Mr. VanWagoner asked how the Medical Staff feels about the joint meetings. Mr. Franz felt they enjoy the meetings because it gives them an opportunity to put a member’s face with the name, and helps them find out the BOD is a concerned group trying to do a good job running the hospital. Ms. Olson mentioned they had discussed having a month for committee audits to see if they had achieved their goals, and suggested the Finance Committee report be presented in July since it is fiscal year end. She also mentioned since the members sign up for committees in January this might be an appropriate time for the committees to report and decide if they are still necessary. Ms. Lefton agreed and Ms. Derry said Annual Committee Reports would be added under the month of January.

Ms. Derry suggested the members keep the list, showing the monthly issues to be covered, in their notebook.

Orientation Checklist

Ms. Derry commented she felt this was a great list and asked the members if they had any other items they would like to have added to help new members. Ms. Olson requested adding Assignment to a Committee to the list. Ms. Lefton asked who would be responsible for reviewing reference materials, the Strategic Plan, and the calendar of activities with new members. Mr. Franz said this needed to be decided and suggested either the mentor or himself. Ms. Lefton felt Mr. Franz was the key person and the mentor was the support person after going over the different items. Ms. Blue added reference materials are very important. Ms. Olson suggested the Governance Committee be in charge of assigning a mentor.

Professional Liability Insurance

Mr. Franz said at the last meeting they discussed the difficulty physicians are experiencing in obtaining professional liability insurance. Part of this is the result of the September 11th attacks. Many insurance companies took significant loses following the attacks and have decided to pull out of the professional liability insurance market. St. Paul Insurance alone canceled 42,000 doctors’ national wide. The Independent Practice Association in Soldotna was denied coverage because of loses by two of their physicians. Two of the hospital’s doctors, who were participating with the group, were without coverage for approximately three months but have now secured coverage. Mr. Franz said all of the hospital’s staff, which are required to have coverage, have insurance. He reminded the members in February 2000, the BOD developed a policy on professional liability insurance, which grandfathered in doctors who were on staff as of June 30, 1999, and they are not required to carry coverage. Currently there are three staff members who chose not to have insurance. All allied practitioner staff are required to carry coverage. If the market continues to tighten up and the doctors cannot secure coverage they would have to leave the medical staff, which could have a significant financial impact on the hospital. Mr. Franz said it would be ideal to have the hospital and the physicians’ insured under the same company. He said they have been told to expect a 20% increase when coverage renews in October. Mr. Franz said they are working on obtaining an estimate for group coverage for the hospital and the physicians. He said they have discussed looking at the highest risk and exposure areas. It was felt they might arrange a contractual relationship with the doctors in these areas to make some adjustment in their reimbursement rate to cover a portion of the insurance cost. Mr. Franz said they plan to continue researching companies and he would keep the members informed.

Pension Plan Investment Report

Mr. VanWagoner said he felt the $1,400 fee charged by Safeco for handling the Janus Fund was rather excessive. Mr. Franz said he spoke with Mr. Curt Olson, who was also surprised at the amount they had charged, and he would look into this. He reported there was a positive return of 2.43% in 2001.

Psychiatric Services Contract

Ms. Derry asked if there were any changes from the previous contract. Mr. Franz said the only change was in the rate of reimbursement. The rate was $125 per hour, for a maximum of eight hours of services per month, and is now at $165 per hour.

Ms. Olson reported it was a positive month with a gain from operation of $132,271 and year-to-date they show a gain of $566,000. Variances showed higher bad debts and professional fees. Cash on hand was very positive. With a goal of $2,367,000 they are currently at $4 million, which means they could operate the hospital for 74 days.

Mr. Button said they received a $711,000 payment from the Kenai Peninsula Borough. The funds were appropriated to be used as construction funds and were not transferred to the service area during fiscal year 2000. This was not discovered until two months ago. The funds will be retained in an un-appropriated account and when the hospital proceeds with the next phase of construction it can then be re-appropriated at that time.

Ms. Olson said they also discussed reviewing the ChargeMaster and the policy sometime in the future during a joint meeting with the SAB.

SAB Chairman

Mr. Green reported the budget presentation to the Borough, done by Ms. Julie Woodworth, went very well. Mr. Tim Navarre questioned why contractual services in the amended budget varied from $604 to $15,000 over a three-year period, and in the original budget it varied from $1,000 to $13,000. Mr. Green told him they did not know how this was arrived at and has drafted an E-mail response to him with input from Mr. Button, Mr. Franz and Ms. Woodworth to answer these questions. He did not feel there would be any problems with the budget. Mr. Green said they are planning to create a packet of information for members giving points to be used when discussing proposed expenditures with members of the community. It was also suggested they prepare a three to five minute presentation to present at various meetings such as Rotary. Mr. Green said both Boards should look at the degree of participation by the community in the planning process and listen to their input. The Boards would be able to let them know they have been heard and if it is possible to provide or not provide their requests.

Mr. Green mentioned there are several positions open on the SAB. They have discussed doing public service announcements to possibly encourage individuals to become interested in serving on the Board.

Mr. Green added Mr. LeRoy Gannaway and Ms. Jackie Dentz would co-chair the Governance Committee.

CEO Report

Mr. Franz reported the Awards Banquet went well. Ms. Cris Beaudion, Acute Care Social Worker, was selected as the Employee of the Year and Mr. Tom Walpole, Personnel Services Manager, was selected Manager of the Year.

Mr. Franz said the Employee Satisfaction Survey has been completed using the same format Industrial Relations International used in 1999, and Mr. Walpole is preparing a report.

Mr. Franz reported the VA inspection team had been at the hospital and everything went well. There were no significant deficiencies but they did recommend a few changes to the fire drill practices and plans.

Mr. Franz mentioned they received notice the disproportionate share payment for this year will be $28,000 compared to $11,000 last year. The payments should start arriving mid July and Mr. Franz suggested holding the funds and possibly adding them to the Student Loan Program.

Mr. Franz said Dr. Jim Peterson, who was doing temporary anesthesiology coverage last week, enjoyed the opportunity and is considering moving here some time in the future. He said another anesthesiologist, Dr. Ray Fowler, would be arriving from Great Falls, Montana, the second week of June. He plans to work in Homer from June through November of this year, May through October in future years, and will work in Phoenix, Arizona, the other months.

Mr. Franz said hospital food service typically receives less than favorable comments and to improve SPH’s Ms. Pat Cue, and the Kitchen Staff, are currently working with Lisa and Tiny Nolen who own The Homestead Restaurant. They are helping them with food presentation and organization.

Mr. Franz informed the members the State Hospital Association is sponsoring a Peri-operative Nurse Training Program. He felt this would be a great opportunity to send some of the OR nurses for additional training so they will be up to speed on the standards of the Association of Operating Room Nurses. The training is relatively inexpensive with only a trip to Anchorage for orientation and $500.00 for a self-paced training modular.

Mr. Franz said North Wind Home Collection, on Pioneer Avenue, donated a sofa to LTC. It is a beautiful sofa, which arrived with a small damaged spot and could not be sold at the store. The members felt it would be nice to acknowledge the gift with possibly a picture in the paper with some of the residents sitting on it. Another gift to LTC was a wonderful set of teak deck furniture donated by the Hospital Auxiliary.

Mr. Franz reported the flag for the hospital arrived and he suggested it be raised Memorial Day weekend. Ms. Lefton mentioned the Boy Scouts or Girl Scouts might like to be involved.

SPHI President

There was no report.

Strategic Planning

Mr. Franz reported the architect has been selected and awarding of the contract is on the Assembly’s agenda for the June 4th meeting.

SAB Finance Committee Meeting,    06/04/02 12:00 p.m.,      SPH Conference Room 1

SAB Regular Meeting,     06/06/02 6:00 p.m.,      SPH Conference Rooms

BOD Finance Committee Meeting,    06/25/02 12:00 p.m.,     SPH Conference Room 1

SAB/BOD Joint Meeting,    06/26/02 6:00 p.m.,     SPH Conference Rooms

Ms. Olson said she would be the BOD representative at the SAB meeting on June 6th.

Ms. Derry mentioned there were some members who indicated they would be gone at the time of the joint meeting in June. Those who plan to be out of town were Ms. Olson, Ms. Lefton, Ms. Derry, and possibly Mr. VanWagoner. Mr. Franz said Mr. Lau was out of town on a family matter and was not sure when he would be returning. He said Mr. Dick Friedland, the consultant for the hospital’s new automation system, was going to attend the joint meeting to talk about the system. If there would not be enough members present it could be postponed until July. He said they would not be ready to come to the Board with a recommendation until sometime after that date. It was decided to plan for Mr. Friedland to be at the July meeting.

Mr. Craig encouraged both Boards to work hard to obtain as much participation from the physicians as possible on the Strategic Plan. It seems they have a tendency to stand back and later say no one talked to them.

Ms. Olson mentioned she had read an article on health insurance in the paper, which talked about cost shifting, and said she had a copy for those who had not had a chance to read it. She said it was very accurate on what happens in the hospital as they try to do a ChargeMaster to address the problems of people not paying for services.

Mr. Franz provided the members with the agenda for the Alaska State Hospital and Nursing Home Association meeting. He said the meeting will be held in Soldotna this year and encouraged the members to attend. Ms. Derry added these are always excellent meetings and also encouraged everyone to attend.