Weems Memorial Hospital is moving ahead with several capital expenditures, not the least of which is $50,000 for a revised feasibility study to determine how much debt makes sense to take on to build a new facility, or renovate the existing one.
Weems CEO Ray Brownsworth told county commissioners Tuesday morning that a debt capacity study, exploring scenarios ranging in cost from $8 million to $12 million, would be needed to as part of a loan application with the U.S. Department of Agriculture.
“We can use some existing information but have to revalidate that,” he said, noting the cost of the study as well as the $65,000 which also will be needed to file a letter of intent, could come from preconstruction funds held in the county’s health care trust fund of monies from the 1 percent sales tax.
Funding the debt capacity study passed unanimously after some grousing by the commissioners.
“We paid the same firm already for a feasibility study.” said Commissioner Pinki Jackel. “It seems to me we already paid them $100,000.”
Brownsworth said competition to the west, and changes to the marketplace and to rates of reimbursement, have made it necessary for the revised study. “A colleague in a nearby town paid $130,000” for a similar study, he said, noting that it would be good for one to two years.
“We’ve already paid them $250,000 for plans that don’t work,” said Jackel. “We’ve got to stop spending money on evaluation. We’ve spent almost $400,000 on evaluation and we don’t have anything to show for it.
But, she conceded, “if we want a new hospital, we have to give them their information.”
Commissioner Smokey Parrish wanted reassurance from Brownsworth the study would not be a case of throwing away more money.
“Are we ready to move forward? Because if not, it’s a waste of money,” said Parrish.
“This is what we need to be ready to move forward in a timely fashion,” said Brownsworth. “The feasibility study will confirm which of those, with great detail, will be possible. I assume we want to get the most bang for our buck.
“I would like to be starting on a new hospital in a year. My charge since I’ve been hired here is to make this happen and that’s what we’re going to do,” he said.
“I would like that but we’ve got to have somebody to stay behind this,” said Jackel.
The CEO said the hospital might be 10 beds, with a medical office building or clinic attached. “We’re averaging three (patients) daily now so that will give us a 400 percent increase which is a gracious plenty,” said Jackel.
Brownsworth said Dr. Stephen Miniat’s former office is being converted into clinic space for Weems West, staffed by advanced registered nurse practitioner Susan Hardin. She sees about eight to 12 patients currently at her office inside the hospital, with the Weems East clinic’s two practitioners in Carrabelle seeing about 30 to 40 patients each day.
Brownsworth said a primary care practitioners is expected to see about three or four patients per hour in a seven-hour day.
“About 21 to 25 patients per day is what you are looking for, with complicated medical conditions taking longer,“ he said.
He said a complete renovation could run as much as $350,000, an expenditure which did not make as much sense, during this time of architectural transition, as spending under $50,000 to make the space suitable for Hardin, alongside a visiting specialist.
“Sometimes when you renovate, it costs more than construction,” said Jackel.
After the vote to approve the study was complete, Commissioner Noah Lockley signaled his patience, too, was nearing its end,
“Is this the last time we’re going to do this?” he asked.
“Last time for me,” said Commissioner William Massey.
Electronic medical records next big expenditure
Brownsworth said Weems is nearing the end of its evaluation of two vendors, Healthland and CSS, for its electronic medical record (EMR) and health information management system (HIM). EMR and HIM provide for the business and billing activities as well as the documentation of a patient’s health record.
“We are evaluating the ability of a system to meet our needs now and into the future,” he said.
Comparing the cost of both systems begins with the purchase price, which includes the cost of the software, hardware, peripherals, installation, interfaces, licenses, training and travel. Prices for the two vendors vary from $510,000 to $825,000.
Brownsworth said a second consideration is the cost of operating the system,, which requires annual support and maintenance fees for the large software system. Factoring in these costs to the purchase price shows a comparatively close cost of ownership over a five-year period, in the neighborhood of about $1.5 million.
After a contract is signed for a system, Weems will apply for Medicaid Incentive payments, which consultant estimates say could equal at least $300,000 or more.
Once the system is installed, Brownsworth said, Weems will seek to receive these payments within the first year of use, and annually for several years following.
“At this time, an estimate is not available for these payments,” he said. “Together, both incentive payments should meet a majority of the capital needs for the purchase of the computer systems. Several options exist for the upfront payment of the software and equipment pending the receipt of incentive funds and finalization of pay off terms.”
While the purchase of EMR and HIM systems will improve productivity, continuity of care and allow for more timely billing and collection of revenues, the main reason for the purchase is the federal requirement to convert to an electronic medical record or face declining reimbursement from Medicare and Medicaid, which together represent about half of the hospital’s patients.
Brownsworth said he expects to recommend a final vendor to the Weems board by month’s end, with that selection then going to the county commission for final approval.
IT contract goes to new firm
Earlier this month, Brownsworth reported to commissioners, he served BlueManta, the IT (information technology) vendor, with 30 days’ notice of termination of the contract.
“This was due to concerns about their responsiveness to our requests and a failure to adequately provide for business continuity services,” he said, noting that over the last year, he had been able to lower Blue Manta’s monthly fee from $9,000 to $6,000.
Brownsworth said system security controls and access were reset, as is typical for such a transition.
The CEO has engaged Eagle Tree Technologies, a newly formed company under the management of Kevin Ward, under an interim month-to-month service agreement for $4,100 per month.
“Input from the county commissioners and the hospital board of directors will be sought related to a longer term agreement and the proper selection process,” Brownsworth said.
One bit of disappointing news has been that the top two candidates for the newly created chief financial officer position have both declined Brownsworth’s offers. He said the first, from the state of Washington, found that housing costs were too high for what the job paid, and the second took a competing job offer to be within 30 miles of his grandchildren.
Brownsworth said he planned to provide a tour of the facility this week to a new prospect.