The meeting was called to order at 6:05 p.m. by Fred Lau.

Present: Fred Lau      Julie Derry

Ingrid Avril      Wendy Lefton

Steve VanWagoner      Rick Eckert

Ron Alderfer

Excused: Lorna Olson      Kellie Blue

Also Present: Charles Franz, CEO

Charlie Button, CFO

Dr. Paul Eneboe, Chief of Staff

Larry Dallas, Director of Support Services

Tom Walpole, Director of Human Resources

Robbie Coffey, RN, Acute Care

Peggy Pittman, RN, Acute Care

Larry Sloan

Marsha Kinney, Homer Secretarial Services

Mr. Lau requested adding Board Resolution #03-01 as Item C under NEW BUSINESS.

The agenda was approved as amended.

Dr. Eneboe said since the board has been discussing peer review he has provided them with a copy of the outpatient medical office review they have completed in their office as an example.

The minutes were approved as submitted.

Mr. Lau mentioned during the January meeting they failed to re-appoint Ms. Derry, Ms. Lefton, and Mr. VanWagoner as board members. In spite of this fact they still had a quorum at the meeting but this should be addressed so they are officially authorized to serve.

Mr. Franz pointed out the year-to-date LTC infection rate is still looking well but in January they spiked up to 35% on their nosocomial infection rate, and they are currently looking for ways to reduce this. It seems the most probable cause is proper hydration, which caused urinary tract infections in some of the residents, and they will be working on encouraging the residents on their intake of fluids. Dr. Eneboe added they also had a flu respiratory infection that went through the unit. Mr. Franz mentioned they still need to incorporate the vacancy rate for registered nurses into the dashboard. He said they are doing well with filling positions and the overall vacancy rate at SPH is currently less than 5%. He added they are still looking for an occupational therapist. Ms. Derry suggested adding employee injuries to the dashboard because of the importance of the impact to the financial well-being of the hospital and the employees. Dr. Eneboe felt it would also be nice to have data on national benchmarks for various comparisons at the hospital. Ms. Lefton said she would also like to see information on returned responses regarding patient satisfaction.

Master Plan Development

Mr. Franz reported at their last meeting the SAB reviewed the revised Master Plan and forwarded it to the architect to begin drawing up final plans. He said that he and Mr. Button had a very good meeting with Jeff Sinz, Sherry Biggs, and a representative from the Land Management office, to discuss the plan. They plan to introduce an ordinance April 1st to request a special election and hopefully approval from the voters on the project and bonds. Mr. Franz said they may have a decision by April 15th, which would allow a mail-out election. The ballots must be mailed out 22 days prior to the election and they could possibly be able to certify the election by July 8th. They could then begin the process of selling bonds by the end of the year, have the money available to let the design contract by early summer, begin the design work early fall, put the construction project out for bid early spring, and begin work next summer.

Collective Bargaining Agreement

Mr. Franz said this afternoon he received feedback from Barbara Huff, the Teamsters business agent, on the priority issues they would like to see changed in the contract. He has not had a chance to discuss this with the staff.

Sublease and Operating Agreement

Mr. Franz said the Sublease and Operating Agreement has been introduced to the Assembly and hopefully will be voted on and approved March 11th. Although borough attorney, Colette Thompson, had indicated she was going to make some changes to the language, Mr. Franz has not received anything from her to present to the board for approval. He added it looked like the borough had gone with the language sent to them and had not made any adjustments.

Computer System Conversion

Mr. Franz reported the CPSI conversion is moving along with good participation from the staff and very positive feelings regarding the system. He said it will be interesting to see how it changes the culture of the hospital since there are a number of individuals who are not familiar with computers. Another interesting aspect of the system will be the barcode verification of medication administration, which was one of the recommendations from the Institute for Save Medical Practices, and SPH will be the first hospital in the state to implement this system. He said there are currently 16 representatives from CPSI at the hospital and there will be 29 present on Saturday to help the staff with any problems when they go live with the new system. Mr. Franz added it is completely HIPAA compliant in protecting patient privacy.

Dr. Eneboe asked if they are planning to pull information from the now existing paper records into the computer. Mr. Franz said they do not plan to because of the expense and time involved. Dr. Eneboe said they did this at the Homer Medical Clinic and found that it was not only invaluable but essential. He said they hired two extra individuals who, as the doctors saw patients and pulled pertinent data from their files, would scan the data into the new system. They are now down to one person assisting them, and it does require physician time, but works great when in place. Mr. Franz said they may want to reconsider doing this.

Mr. Franz suggested they review the Executive Summary. Mr. Button went through inpatient and outpatient revenue, which includes a 4% price increase starting July 1st, in order to keep up with inflation. They have planned for growth in some departments and will be increasing services. Deductions from revenue include an increase in charity care but they do not anticipate this continuing. Total net revenue is projected to have an increase of 5.7%, and salaries and wages are expected to increase 6.48%. Since they are increasing salaries they are also asking departments to keep overtime at a minimum in order to decrease this expense and keep the budget in line. Employee benefits will go up 7.32% and includes PTO, sick leave, and holidays. They showed an increase of 6.32% in supplies with the biggest area of increase in Pharmacy. There is a 52% decrease in contract staffing and they anticipate keeping positions filled. Utilities are anticipated to go up 7.56%. Professional liability insurance is showing an increase of double the current premium and they will be aggressively shopping for a different carrier. Travel is expected to go up 31% and mentioned there was very little travel done the first half of the year. Repairs/maintenance showed 5.5%, and leases and rentals, which includes the MRI, went up very significantly at 127%. Total operating expenses are increasing 6.21%, versus net revenue increasing 5.78%, leaving a loss from operations of $294,000. This calculates out at funding 85% of depreciation, which was the goal set in putting the budget together. Mr. Button then went over non-operating gains/losses.

Mr. Button added they had included graphs showing the layout of the budget and asked for feedback from the members as to whether they would like him to continue including these.

Mr. Franz introduced Tom Walpole, Director of Human Resources, who discussed how they measure the competence of staff that provide direct patient care but who have not gone through the credentialing process. Mr. Walpole referred to the Clinical Competence Comparison Chart attached to the February 03 Vacancy Rate Dashboard, which had bars showing scores for 2001 and 2002. He noted that in most instances those which had lower 2002 ratings than 2001 had new supervisors in those departments. The rating scale for employees is as follows: one point, which is unacceptable, two points needs improvement, three points is fully competent, four points frequently excels, and five points constantly exceeds the standards. The overall average for the clinical staff is 3.92 and last year was 3.93, which is very close to frequently excels. Mr. Walpole said next year they plan to also start annual ratings for AC, LTC, Community Health Services, and Dietary.

Ms. Derry asked since these are averages how low do the employee ranges go and is there a specific stopping point where an alarm would go off regarding an employee’s competence. Mr. Walpole said 3.0 rates as fully competent and if someone scores a 2.75 it indicates they need improvement. They would then receive a written improvement plan and be required to become compliant within a certain timeframe.

Mr. VanWagoner arrived at 7:10 p.m.

Mr. Lau mentioned in the cases where the ratings went down it could also mean there were new employees, which would affect it the same way as new supervisors. Mr. Walpole agreed.

Board Resolution #03-01

Mr. Franz said since last November Larry Dallas has been working with FEMA to try and obtain some financial relief in restitution for flood damages. The hospital had direct costs associated with the flood when employees had to work overtime because other employees not being able to get to the hospital. There were also some repairs around the hospital because of water coming into and under the building, as well as drainage work due to water coming off the hillside. He said when a FEMA inspector saw the problem with the hillside they suggested getting estimates to alleviate the drainage problem. In order to apply for the FEMA grant it must be authorized by the BOD.

Mr. Franz said they went over the budget at their last meeting and asked if there were questions on the financial report, which had been included in their packets. There were none.

SPHI President

Mr. Lau had nothing to report.

Administrator

Mr. Franz mentioned both houses of Congress approved the 2003 omnibus spending bill, which contained some relief for hospitals from some of the proposed reductions in Medicare payments. This was signed by the President last Thursday and they should see reinstatement of some of the cuts with the Medicare reimbursement. He added it will also be very important for physicians because of a 1.8% increase in payments.

Mr. Franz said he has been working on the Certificate of Need application process for additional beds in LTC.

Mr. Franz reported the MRI has been continuing to do very well for the hospital and they have done 35 exams this month, with a total of 165 since November. They also have done 10 Bone Densitometer scans this month for a total of 32 since starting operation in January.

Medical Staff

Dr. Eneboe said the Medical Staff did not meet this month. He mentioned there is a joint meeting planned in March to go over HIPAA issues. He said they will also be dealing with the issue of derogatory comments and they will talk about another fairly difficult issue, called the O’Malley Case, which has come out of the Supreme Court.

Dr. Eneboe reported he, as well as Mr. Franz, met with Kemper Breeding, Dr. Burgess, and Christine Anderson, the Director of Nursing, to over mental health issues. They feel there are some problems coming with Mental Health’s budget changing and their ability to cover ER. He said he met with Dr. Burgess again today to go over some ER issues. They hope to get them resolved but there may be the possibility the hospital will have increased responsibility for mental health patients. This causes concerns as to how to handle these patients because they can be violent.

Dr. Eneboe invited the BOD to attend the meeting on March 19th at 6:00 p.m. and reminded them this is a closed meeting of the Medical Staff and the board.

SAB Chairman

Mr. Green said the SAB has also been addressing code of conduct for directors, and are anticipating changes in their Policies and Procedures, to address behavior of directors. He said they currently have names of potential candidates for replacement of vacant seats. He reported Tammy Jones has resigned and there will be five members’ whose terms will expire at the end of this year. Mr. Green said they have asked these individuals to inform the board within the next 60 days if they plan to continue as members, which will allow the SAB to publicly announce any openings.

Governance Committee

Ms. Derry said the committee has decided to meet prior to the board meetings at 4:00 p.m., and they have started reviewing board policies.

QI Committee

Ms. Derry reported the committee met on February 13th. She mentioned she has been attended the QI Committee meetings for a few years and offered to step aside and give the opportunity to anyone else who would be interested. Ms. Derry said they had some very interesting reports regarding employee injuries and PET updates. Dr. Eneboe mentioned one of the biggest responsibilities of the board is assuring quality of care at the hospital and encouraged all board members to attend a QI meeting. This would give them an opportunity to see the problems that arise and the commitment from all the employees in dealing with these issues. Ms. Derry agreed and said it is very impressive and amazing to see them in action. The next meeting will be March 13th at 8:30 a.m.

Mr. Lau announced the regular BOD meeting scheduled for March 26th is cancelled and they will have joint meeting with the SAB on April 3rd.

SAB Finance Committee Meeting,     03/03/03 12:00 p.m.,      Administrative Office

SAB Regular Meeting,      03/06/03 6:00 p.m.,      SPH Conference Rooms

Joint BOD/Medical Staff Meeting,      03/19/03 6:00 p.m.,       SPH Conference Rooms

Joint SAB/BOD Meeting,     04/03/03 6:00 p.m.,      SPH Conference Rooms

There were no comments of the audience.

Ms. Derry suggested that handouts at board meetings be sent to members who are absent.

Mr. VanWagoner said he was thinking today how grateful he was to be on the SAB and not the KBBI board.