The meeting was called to order at 6:0 4 p.m. by David Green.

Present: Julie Woodworth   Bettyann Steciw

Tammy Jones   David Green

Jackie Dentz   Stan Welles

Angelo Hillas   Jay Kennelty

Excused: Karen Berg-Forrester

Also Present: Charles Franz, CEO

Charlie Button, CFO

Fred Lau, BOD President

Dr. Paul Eneboe, Chief of Staff

Tom Walpole, Director of Human Resources

Larry Dallas, Director of Support Services

Collette Thompson, KPB Attorney (Telephonically)

Marsha Kinney, Homer Secretarial Services

Mr. Green requested adding Secretary’s Report as Item G under REPORTS, and Strategies of Planning to Sell Bonds as Item B under NEW BUSINESS. He also mentioned Ms. Jones has requested time to address the board and added this as Item C under NEW BUSINESS.

Ms. Dentz said since there have been some issues with rules of conduct, conflicts and challenges, the Governance Committee would like to request going into Executive Session to attempt to resolve some of the problems. She said this is covered under the section regarding subjects that tend to prejudice the reputation and character of a person. Mr. Green said in order to go into Executive Session it must be by unanimous vote of the members. Ms. Dentz felt it would take approximately ten minutes.

Mr. Green said the Executive Session would take place at this point in time to provide some resolution of conduct and would abide by this conduct from here on out. Mr. Green reminded the members the motion must receive a unanimous vote.

The agenda was approved as amended.

There were no comments of the audience.

Mr. Green said in the sixth paragraph on page five it should read, "Mr. Green, Mr. Lau, Dr. Eneboe, Dr. Welles, Dr. Smith, and Mr. Franz have met and they have agreed to re-evaluate their present position.", instead of ".....agreed to re-evaluate their positions." Mr. Franz mentioned Dr. Wells’ name was misspelled and does not contain an "e" at the end. Mr. Green said page six and page seven both contained an extra space between sentences, and on page six where it read, ".....they wanted to be able to monitor the calcium update", it should read ".....they wanted to be able to monitor the calcium uptake."

Mr. Green said on the first page, second paragraph, where it read, "Ms. Dentz said the SAB met three times.....", it should read ".....Ms. Dentz said the Governance Committee met.....". He also corrected a misspelling in the middle paragraph of page four, which read ".....where the doctors order their patients’ test is their decision....." instead of ".....there decision."

Ms. Woodworth reported the committee had discussed land acquisition. Apparently Mr. Chow has contacted a realtor, may be interested in leasing to SPH, and Mr. Franz will follow-up with him. They also felt the new clinic being built by Dr. McCallum and Dr. Raymond may result in a higher appraisal of the Chow property. She said Mr. Button updated the committee on possible funds available from the borough for a future site for the hospital. It was agreed the Strategic Planning Committee should set up criteria regarding a future site for a 15 to 20 year plan. They would then have objective priorities in mind for a site and if property became available they would quickly be able to see if it met the objectives.

Ms. Woodworth said they also discussed funding the expansion and are still in the $16 million budget range, which would require a $10 million bond.

Ms. Woodworth said they also spoke about liability and board coverage. She added this item to their agenda since any potential liability would affect finances. Indemnification through their Bylaws, and the through the Assembly, is in place as long as they do their job correctly and follow board responsibility. There is potential liability if individual members speak outside of the board meetings and can be perceived as if they are speaking on behalf of the board. They reiterated that the Chairperson should be the only one to speak on behalf of the board.

Ms. Jones asked if the SAB is covered in the case of a lawsuit. Ms. Woodworth said the board members are insured but the insurance would provide coverage if members do not follow their responsibilities as a board. Outside of board meetings they must watch their words and pick topics with care since it could be perceived they are speaking on behalf of the board. Ms. Jones asked if a member is speaking outside of the board, and the other members do not correct this person, are the other members also out of line. Mr. Green said if guidance is given to a person who has spoken inappropriately and the problem continues the board is indemnified. If the behavior continues more forceful action would need to be taken.

Governance Committee

Ms. Dentz reported the Governance Committee has met twice and has gone over rules of conduct. This has become necessary since they have been visited by physicians who are upset with what is going on with the SAB, and also because of board members who are upset. They felt there should be conduct rules in place so everyone would be on track. If there are concerns they should be researched and then brought to the board. They also want to make sure they support each other and work together as a team. Ms. Dentz then passed out forms with suggested ideas to be reviewed by the members and discussed at the next meeting.

Chairman

Mr. Green said there have been a number of procedural questions as to how the board accomplishes its business. He has addressed many of these questions to the borough attorney, Ms. Thompson, and Ms. Biggs, the borough clerk. He then shared information received from them with the members with input from Ms. Thompson telephonically. Ms. Thompson reminded the members the SAB is to be concerned with the level of services provided by SPH and the operation of the hospital is the concern of the BOD. Mr. Welles suggested the SAB do surveys of the physicians, patients, and employees, to obtain national benchmarks to compare SPH with other hospitals. Dr. Eneboe commented the medical staff essentially has no relationship with the SAB and their relationship is with the BOD as defined by the Bylaws. They attend the SAB meetings to provide input regarding capital equipment needed and the hospital building. The day to day operations are handled by the BOD and they have done a number of surveys over the years. Mr. Green said the quality indictors monitored by the BOD are benchmarked and considerable research has been done to compare SPH to other hospitals.

Administrator

Mr. Franz reported they have finished training for the new Health Insurance Portability and Accountability Act (HIPAA). This is a federal law, which was passed approximately six years ago, and will now be going into effect on April 13th. The law places a whole new level of security on health information. Mr. Franz thanked Mr. Button and his staff for all their hard work in making sure the hospital is ready for compliance.

Mr. Franz said they are on the fast track with the implementation of the new computer system with CPSI. The first staff from CPSI will arrive next week and they will go live with the new system the first week in March.

Mr. Franz referenced other information available in the members’ packets. One of which was a letter sent to the BOD President in 1995 from Thomas Boedeker, the borough attorney at time. The letter dealt with reporting of claims or potential claims. Mr. Franz said he is to alert the SAB but cannot provide any great detail of information because of attorney/client privileged information. Ms. Thompson said usually the Chairman of the SAB is notified by the hospital Administrator and the Chairman would then notify the other members. She also cautioned that if e-mail or written communication is used it is the duty of the members to keep any confidential information contained in the communication confidential. Mr. Green added no details are given and that they are merely notified of a potential action.

Mr. Franz mentioned he had provided a copy of a recent ruling from the Alaska State Supreme Court on a case between a physician and Providence Hospital. It clearly reaffirms the responsibility, and the duty of a BOD, to require a physician to provide information they request in order to process his request for clinical privileges. In this case the physician did not provide the requested information and sued the hospital for denying privileges. The Supreme Court found that the physician had the responsibility to provide the requested information to the hospital.

Mr. Franz added they have monthly QI meetings and the dashboard information is provided to the BOD. He said the entire staff takes the quality of care provided at SPH very seriously and they work very hard at providing the best care possible.

Mr. Franz then provided a slide presentation regarding a method the hospital uses to judge the severity of illness, the severity of the types of cases being treated by the doctors, and the types of cases being treated at the hospital. This is called a case mix index and is important to the hospital because it determines the reimbursement rate under the Medicaid program. Case mix index is calculated from the diagnosis related groups. Every diagnosis, procedure, and illness that a patient has is assigned a code. Each code is assigned a value and goes into a complex formula that gives a score for the case mix index. He then explained how the numbers are arrived at from the average level of intensity and up. Mr. Franz said anytime the board has questions about the quality of care provided at the hospital, or the level of intensity of service, he will do his best to get them factual information. He added there may be times when he will not be able to share certain information because of confidentiality.

Mr. Franz said unfortunately the union contract was not ratified by the membership and they are currently working on some adjustments to the contract.

Operating Board

Mr. Lau said the BOD welcomes any questions or comments the SAB members may have. He felt both of the boards have been involved with the management of the hospital. They hold joint Retreats where they have discussed issues together and the BOD has then proceeded in a certain direction. He felt this has helped in keeping communication open, and added most of the surveys have been decided on at the Retreats, and information from the surveys has been brought back to the joint Retreat for review.

Mr. Lau referred to listing of roles and responsibilities he had prepared and asked for suggested changes or comments. Ms. Dentz said she felt it was excellent and they would be discussing it at the next Governance Committee meeting. Ms. Thompson requested a copy of the list.

Mr. Lau commented two of the BOD members had worked very hard to arrive at their quality indicators and requested the SAB also receives copies of these.

Mr. Franz mentioned CMS Quality of Care Measurers is a federally mandated program for monitoring quality of care nation wide. It just came out approximately two months ago and he was very proud to announce Dr. Eneboe has created a committee to begin looking at how SPH will be assessing quality of care. The four primary areas are acute myocardial infarction, heart failure, pneumonia, and surgical infection prevention. They will now select cases, collect data, and assemble a report. Mr. Franz said since the hospital is moving ahead with this very quickly SPH will most likely be one of the first hospitals in Alaska to accomplish this. These indicators will be similar to the quality indicators for nursing homes and will also be published nationally on the CMS web site and in newspapers.

Current Financial

Mr. Button asked if there were any questions regarding the Financial Report, which was in their packets. There were no questions.

Secretary’s Report

Ms. Jones reminded the members to submit their reimbursement requests to her. She said during last month’s meeting a document had been submitted to the SAB. As per the borough clerk any documents brought up and/or submitted at meetings must be attached to the minutes so it may be available for public review. It was also suggested that members be prepared to indicate during the April meeting if they plan to file again. Ms. Jones added there will be positions open and this would allow adequate time to advertise.

A break was requested at 7:40 p.m.

The meeting reconvened at 7:50 p.m.

Mr. Franz presented the most recent revision to the proposed hospital expansion and showed slides showing the second floor consolidation strategy, which has been agreed upon at the Construction Committee level. Dr. Eneboe added the Medical Staff was happy with the plan and would support it. Mr. Franz said there would be approximately 25,000 square feet of new construction and 11,000 square feet of remodeled area. This would then bring the hospital up to108,000 square feet and would then be consistent with the projections for workload requirements for the next ten years. He also mentioned there would be approximately 1,400 square feet available for visiting physicians and would allow room for two physicians at one time, whereas currently they can only accommodate one physician at a time. Mr. Franz said the helicopter landing pad will be moved somewhat and will provide the required FAA area for approach and takeoff. He added in order to accommodate parking space it will require purchasing or leasing the Chow property. The total project cost for the revised second floor consolidated strategy is $16.4 million.

Ms. Thompson informed the members the ordinance, memorandum, and a copy of the draft agreement is scheduled for introduction on February 18th, with a hearing date of March 11th. Mr. Green mentioned Ms. Thompson had some concerns in regard to the wording and suggested she forward the concerns to the SAB in order to address them. Ms. Thompson said she would forward them to the board.

Ms. Woodworth reported Mr. Button obtained the "wish lists" from the various department managers and then prioritized taking in consideration quality of service, revenue generating, and health and safety issues. They arrived at approximately $572,000 for replacement, upgrade, or new equipment purchase, and approximately $213,000 for facility improvements, for a total of $785,000. She referred to a copy of the Service Area Budget as of January 27, 2003, which gave the members a picture of where the SAB revenue comes from, and how the capital budget requests would be funded for the upcoming fiscal year. Ms. Woodworth then referred to a listing of capital projects and improvements for fiscal year 2004, which is the final list of equipment and

facility improvements. She said the process now is for the members to look the information over, ask and questions they may have, and hopefully obtain a motion to approve the proposed budget. They would then take it to the Assembly workshop and present it to the Borough Assembly for approval.

Mr. Green said he added this item to remind the members they should develop a systematic approach when presenting the proposed expansion to the public.

Tammy Jones to Address the Board

Ms. Jones said she had two portions in her address to the board. For the first part she said she had some questions for Mr. Welles and asked Mr. Welles if he would consent to going into Executive Session at this time. She said the questions were of different nature than items for the Executive Session scheduled as Item XI. Mr. Welles agreed. Mr. Hillas and Ms. Dentz said they also had some questions for Mr. Welles.

Ms. Jones continued with the second part to her address to the board. Ms. Jones said due to personal reasons she feels it necessary to resign from her position as SAB member, Seat C, effective this evening. She added if the board wishes, and they see the need of Seat C remaining filled until the March meeting allowing time to advertise, she would remain until then. It was felt she has been a great asset to the board and they hated to see her go.

Mr. Green asked the former SAB Secretary, Mr. Hillas, to fill the position for the remainder of the term. Mr. Hillas consented.

There were no comments of the audience.

Ms. Woodworth thanked Mr. Franz for sending the information on the House Bill proposal regarding generic labels on prescription drugs. She personally felt less regulation in laws is better and was not in favor of cluttering up the labels. Ms. Woodworth thanked the Governance Committee for all their hard work on the rules of conduct. She said she appreciated all the work done by Ms. Jones, felt she has been one of the most effective board members she has worked with, and was very sorry to see her go. Ms. Woodworth felt that recently it has been the most challenging time she has experienced in the four years she has been on the SAB. She added if Ms. Jones ever has a change of heart to consider the SAB again.

Mr. Kennelty also felt the generic drug label was unnecessary and added he was also very sorry to see Ms. Jones leave the board.

Mr. Welles thanked Ms. Jones for her service.

Ms. Steciw thanked the Governance Board, as well as the Finance Chair, for their clarification of the rules of conduct and the insurance coverage. She wished Ms. Jones well and said she has been a wonderful board member.

Mr. Hillas said he has always been proud of the hospital facility and after spending a few weeks in the hospital is equally impressed with the staff.

Ms. Jones said she has gotten to know most of the doctors and respects each of them, as well as the nurses and the support staff. She felt if there are no negative attitudes, and the building project goes forward, it will be a far better place and will improve the quality of the community.

Ms. Dentz said Ms. Jones has been great, is very sorry she is leaving the board, and reiterated what Ms. Woodworth said regarding coming back to the SAB. She felt there has been a reborn this evening and the SAB will go forward.

Mr. Green also thanked Ms. Jones for her services and felt it has been very informative with the questions she has asked, as well as those of Mr. Welles.

Mr. Green said they will now go into Executive Session to discuss the response to Osteocare.

Ms. Thompson thanked the members for the opportunity to attend telephonically this evening and felt they were doing a great job.

BOD Finance Committee Meeting,    02/25/03 12:00 p.m.,     Conference Room 1

Regular BOD Meeting,    02/26/03 6:00 p.m.,    SPH Annex Building - Pioneer Avenue

SAB Finance Committee Meeting,    03/03/03 12:00 p.m.,    Conference Room 1

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