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Medical Center debt soars
at Seeley Swan health clinic
(In related follow-up story, center cuts wages to
cope with debt)
by Suzanne Vernon
For the Pathfinder
June, 1996
The Seeley Swan Medical Center is nearly $100,000 in debt and Missoula County
officials have asked the Center's board of directors to correct the situation.
The Medical Center, formerly the SOS Health Center, operates under the authority
of the Seeley Swan Hospital District, and is governed by a five-member board
of directors. Current directors are John Hebnes (chairman), Anita Richards,
Mary Ann Morin, Don Larson and Juanita Ryan, all of Seeley Lake.
According to County Commissioner Fern Hart, Missoula County has been paying
warrants from the Center even though the hospital district has no money
in its account. "But that's not good management," Hart explained.
The County Treasurer could refuse to pay the warrants, but county officials
do not want to see that happen, according to Jane Ellis, financial officer
for Missoula County. Instead, they want to work with the hospital district
board to keep the Medical Center open and allow the district to pay back
the debt over the next several years at 4% interest.
According to Mary Ann Morin, who is reviewing past budgets and financial
records, problems at the Medical Center appear to have begun in about 1989.
However, Missoula County officials apparently were not concerned about the
deficit until 1994 when the total debt exceeded $60,000.
County Financial Officer Jane Ellis and County Auditor Susan Reed contacted
the Seeley Swan Hospital District board at that time and alerted them to
the fact that the medical center was operating with a deficit. The notice
asked that the board clear the debt by the end of the year.
According to John Hebnes, chairman of the board for the Medical Center,
directors did not understand that annual deficits had been accumulating
before 1994. Once they understood the problem, they were willing to do whatever
was necessary to correct the situation, he said. Directors tightened their
belts that year, implemented several changes, including the installation
of a new computer billing and accounting system, and the Center operated
in the black through June 1995. They did not accumulate any additional deficits
that year. However, they were not able to begin paying off the debt. To
make matters worse, in the spring of 1995 a request for a voted levy to
support the Medical Center failed, which again increased the deficit.
Ellis explained that it is not uncommon for local jurisdictions to operate
with small deficits. The situation is usually temporary, she said. A jurisdiction
such as the hospital district is allowed to write warrants because they
have spending authority represented by their budgets. Expenses are covered
by tax and other revenue, which often does not show up in their accounts
until November, when landowners pay their property taxes. Deficits are dealt
with at the end of each fiscal year. "If a jurisidction has spent but
has a deficit, the first thing they're supposed to do with their resources
is take care of the deficit with that new budget," she explained.
In April of this year, the mill levy for the hospital district was put on
the ballot again, and this time it passed, allowing directors to move forward.
According to Mary Ann Morin, who has been on the hospital district board
since 1994, the levy approval was a mandate by the people to keep the Medical
Center open but to re-organize it.
"We want to provide good health care services for this community,"
Morin said. Accomplishing that, Morin explained, may mean a total reconstruction
of the health care facility.
Long-range goals, Morin said, include a vision for a clinic that will stand
on its own and be able to operate without a voted levy. Directors will be
evaluating the results of a recent Health Care Assessment in order to better
determine what types of health care services are needed in the Seeley Lake
community.
The Assessment, funded earlier this year by the Missoula County Health Department,
has also led to the formation of a Community Health Coalition that will
be developing long-range plans for community health care at Seeley Lake.
Directors hope that they can increase revenue at the Center by making it
more user friendly and by providing professional services that meet the
needs of local residents. In May, directors began writing an aggressive
three-month plan designed to increase the number of patients who use the
local Medical Center. The effects of the changes will be evaluated weekly
by the directors, who are conducting an on-going work production analysis.
The Medical Center will now be open from 8 a.m. to 5 p.m. Monday through
Friday, including lunch hour. Directors hope that opening the clinic during
lunch hour and after a mill shift will make the facility more accessible
to local residents. Prior to July 1, the clinic was only open from 10 a.m.
to 4 p.m. and closed for lunch.
The changes are being accomplished by increasing the work hours of the receptionist
at the clinic, and by decreasing the work hours for the doctor and nurse.
The doctor has been offered a temporary three-month contract at 21 hours
per week instead of the 32-hours per week specified in previous contracts.
Dr. Nelson will now be available from 9 a.m. to 5 p.m. on Mondays, Tuesdays
and Wednesdays. A registered nurse will be available at the clinic on Thursdays
and Fridays.
The Medical Center will soon be advertising to fill one position for a registered
nurse. Wilma Nicholson, nurse at the Center for the past 25 years, announced
at a recent board meeting that she will retire this summer. Nicholson underwent
knee surgery earlier this spring and has been working part-time at the clinic
during her recovery.
Fees for office visits at the clinic have been increased from $32 to $35.
Second visit charges have been increased from zero to $20. Directors are
exploring the possibility of accepting credit card payments.
Extra space at the Center may be made available to other health care providers
in an effort to increase revenue.
Other changes include installing a new sign at the highway and distributing
flyers that explain the new hours and fees.
The current directors are acknowledging that poor business practices and
management mistakes may have contributed to current problems. According
to director John Hebnes, it was apparently "a comedy of errors"
during the last several years that contributed to the large deficit.
"We don't know what it was for sure that put us that far in debt,"
Hebnes explained. Directors are conducting an internal audit to look at
financial records, minutes of the meetings, board policies and medical center
business procedures since 1990. Anita Richards, who served on the board
for more than 10 years during the 1970s and 1980s, and was re-elected in
1994, is compiling a complete history of the hospital district.
The internal audit, Richards explained, will help the board see what sequence
of events led up to the current situation. "We have to learn from any
mistakes and go forward," she said.
Some of the things that contributed to the current financial problems include
the transfer of the ambulance from the hospital district to the fire district
in the mid-1980s; the expansion of the doctor's hours in 1990; various mill
levy failures; outdated billing procedures prior to 1994; lack of audits;
and board policy regarding administration of the clinic.
Apparently, some patients at the clinic are unable to pay their bills. According
to Anita Richards, there has been a certain amount of "write-off"
at the clinic every year. The new computer accounting and billing system
has helped alleviate some of the write-offs, she said, but the directors
are still investigating complex billing problems involving Medicare and
Medicaid payments.
The hospital district board, which has acted as a policy-making board at
times during the past, has now taken on the role of administrator. Long
range plans include the possibility of hiring a full-time administrator
for the clinic.
July 1 marked the beginning of a new fiscal year for the Center. Budget
proposals and financial plans are still preliminary. Pathfinder has requested
copies of year-end ledger reports for fiscal years from 1989 through 1996,
along with budget proposals for the current fiscal year. Directors have
indicated that more detailed reports will be made available at a later date.
Internal audits have begun. Tough decisions have already been made. Hard
questions loom on the horizon. According to Don Larson, State Representative
for Seeley Lake who was elected to the hospital district board in April,
"The health center is hemorrhaging. We face losing it." The Medical
Center, he said, needs local support and cooperation in order to accomplish
long-range goals that will benefit the community. He is confident that the
current board of directors has the expertise to "get the job done."
"I'm proud of the board. I think they have the backbone to see this
through," he said.
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Medical Center cuts wages
to deal with county debt
by Suzanne Vernon
For the Pathfinder
August, 1996
The Seeley Swan Medical Center will begin making payments on their $94,153
debt to Missoula County this month. The Medical Center board hopes to pay
$7,600 to Missoula County during the next 11 months, and finish the year
with a profit, according to the proposed budget for the fiscal year that
began July 1 and ends June 30, 1997.
The proposed budget shows an increase in income of $31,115 as a result of
voter approval of additional mill levies this year, along with a decrease
in employee expenses. The doctor's salary has been reduced from $44,899
in fiscal year 1995/96 to $29,466 for the current fiscal year. However,
total employee expenses dropped by only $6,000, due to above average vacation
and sick leave payoff this year ($16,670 compared to zero expenses in that
category last year).
With the proposed income and expense adjustments in the current budget,
the Medical Center board hopes to end this fiscal year with a profit of
about $2,000. It appears that the Center will still owe Missoula County
more than $90,000 in prior accumulated debt as of June 30, 1997. However,
the Center's board of directors hopes to retire the debt in eight years.
Payments to Missoula County will increase to about $18,000 per year beginning
next fiscal year, according to a plan for debt payback recently submitted
to Missoula County. That plan assumes continued voter approval of levies
over the next several years, and no salary increases for Center employees.
Board members are currently auditing income and expense records, and patient
load data at the Center in an effort to find out what may have caused the
continuing deficits, and also to help them plan for more efficient operations
in the future.
Annual income and expense statements are still not available for fiscal
years between 1988 and 1993, although records obtained by Pathfinder for
prior years show that the Center operated with a loss in fiscal years 1986/87
and 1987/88.
In a letter dated June 8, 1994, Missoula County officials notfied the Medical
Center board of directors that the deficit had continued to increase between
1990 and 1994, to a total of $63,517 as of May 31, 1994. County officials
asked the board to adjust their expenditures downward so that the deficit
would be eliminated. The Center did not satisfy that request.
The Medical Center has continued to accumulate debt in two of the past three
years, according to year-end income and expense figures provided by bookkeeper
Marty Kux at the Medical Center's August meeting. The Center lost $25,809
during fiscal year 1993/94. It showed a profit of $2,507 the following year,
but lost money again ($27,425) in the next fiscal year, 1995/96. Voters
defeated the Center's request for additional mill levies to support the
facility that year.
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