Summary of the September Meeting of the
Highlands-Cashiers Board of Directors

In order to keep the public better informed about Highlands-Cashiers Hospital, we are providing a summary of the more significant actions and discussion items coming before the hospital’s board of directors at its meeting on Thursday, Sept. 25, 2008.

  • As part of the opening invocation, Dr. Dave Register read a quote from Benjamin Franklin reminding all that God ultimately rules the affairs of both nations and men (and hospitals). 
  • Board Chairman Bud Smith announced the formation of a new Community Relations Committee to be composed of both board members and a number of appointees from various communities comprising the hospital’s service area. The purpose of the new committee is not only to provide direction and ideas for how the hospital can better tell the public about the physicians and medical services it has to offer, but also to provide feedback to the hospital’s leadership on ways the hospital can better serve area residents. Board members who will serve on the committee, in addition to Smith, are Griffin Bell, Julian Franklin, Dr. Don Mullen, and Brenda Stewart. Former Highlands Mayor Buck Trott, past hospital board chairman Ed Whitby and Janice Dillard, a member of the Cashiers banking community, have also agreed to serve on the committee. Other members are expected to be named shortly, Smith said. 
  • As part of an ongoing series of monthly informational presentations to the board, hospital President and CEO Ken Shull spoke briefly about the members who comprise the hospital’s top administrative team, listing their education, qualifications, and work history. He also covered the managerial reporting structure at the hospital, pointing out which hospital departments report to which members of that team. 
  • Finance Committee Chairman Charlie Sheehan reported that the hospital made money during August, showing a profit before depreciation of $182,000. Revenue for August was up 13% over what was originally budgeted. The hospital is still likely to lose almost $3 million this year, however there is one more month, which will hopefully have a positive bottom line, to be reported before the end of the current fiscal year (Sept. 30).

    Hospital     leaders have been working furiously in recent weeks to develop a proposed budget that will substantially reduce that annual loss in the coming fiscal year. Working in conjunction with the hospital’s Foundation Board, the Finance Committee had set a target of a $1.1 million loss before depreciation. Sheehan said that after extensive work by administration and department managers that resulted in both targeted and across-the-board budget cuts, the projected loss has been cut to $1.55 million before depreciation. While the proposed budget ended up still higher than hoped, the Finance Committee did recommend it to the full board.

    Under the new budget, Shull said projected expenses will be reduced by .6 percent, and while many departments are being cutback, no services are being eliminated. The new budget anticipates a 6.5% increase in gross revenue, and a 6.1% increase in net revenue after contractual adjustments for Medicare and other insurers. Sheehan said the finance committee will be monitoring the actual revenue and expenses very closely each month to make sure the budget projections are met.

    In-coming Foundation President Earle Mauldin said the Foundation is committed to raising the necessary funding through contributions to cover the anticipated budget shortfall, but cautioned that meeting that goal, in addition to providing for capital needs, represents quite a challenge. He said it’s extremely important that the hospital remain within the boundaries of the proposed budget so that donors can feel confident that all measures are being taken to use their contributions effectively.

    Board members also discussed how the Fidelia Eckerd Living Center impacts the hospital’s cost allocations under Critical Access status. How various costs are allocated between the hospital and the center can dramatically affect what costs the hospital can claim under Medicare and Medicaid. As a Critical Access Hospital, Medicare reimburses the hospital for its allowable costs plus one percent. Sheehan said the finance committee will be taking an in-depth look at the overall operation of the Living Center and its impact on the hospital’s cost structure over the next month or so and report back to the board.

    As for capital needs around the hospital, Shull distributed a prioritized list of capital equipment needs. The board unanimously approved a motion adopting both the operations and capital budgets as submitted. 
  • During the Medical Staff report, Vice Chief of Staff. David Wheeler, MD, said the Medical Staff has elected new officers for the coming year. As current vice chief, Wheeler automatically becomes chief of staff, beginning Oct. 1. Dr. Herbert K. Plauché was chosen vice chief, and Dr. Mark Shoptaugh was elected secretary/treasurer.

    In other action, the Medical Staff recommended that Dr. Patrick Cary McEntire be granted one-year provisional privileges in Emergency Medicine. He is board certified and will be filling in in the Emergency Department. Dr. Michael Messino was also recommended for a two-year re-appointment to the consulting staff in Hematology/Oncology.  he board unanimously approved those recommendations. 
  • Dr. Jim Rothermel, co-chair of the Patient Care Committee, talked about the hospital’s procedures for the prevention of “sentinel events,” which involve mistakes that cause serious adverse results to patients. While such cases are extremely rare here, all hospitals are required to have procedures in place to deal with such events and take steps to make sure that such errors don’t happen again. He also reported that the committee had discussed the hospital’s policy on how so-called “never events” are handled. The Center of Medicare and Medicaid Services, as well has the National Hospital Association and other groups have been working to reduce “never events,” such a surgical errors, across the country, including non-payment for procedures where errors take place, or in other cases, for subsequent procedures that may be required to correct the error (such as a subsequent surgery to remove a sponge left in a patient). The hospital here has already essentially been following most of these guidelines for some time. 
  • Chairman of the Program and Facilities Committee Julian Franklin gave an update on the Cashiers Medical Office Building. The hospital continues to explore ideas for expanding the existing building located just off NC 107 south of Cashiers. Designs and drawings are being prepared.  He said the committee also would be studying the current utilization of space in medical office buildings located on the hospital campus with an eye to future cost savings. 
  • In his administrator’s report, Shull said the hospital is continuing to talk to both a family-practice physician and a neurologist who may be interested in practicing in the area. The neurologist, who would be part-time, is currently in the process of obtaining a NC medical license.

    Shull said an inspector from the Center for Medicare and Medicaid Services paid another visit to the hospital recently to make sure the hospital had followed up on correcting several maintenance safety issues found during an earlier visit. Shull said all the issues checked by the inspector had been already corrected as requested.

    A new, full-time director of nursing has been hired and is expected to begin work in late November.

    And as the fiscal year is coming to a close, he also took the opportunity to list a number of key objectives that were accomplished in the past 12 months. Among the items on that list were the recruitment of two very qualified general surgeons to the hospital, recruitment of a new, very popular gastroenterologist, nurse staffing level sufficient to reduce the hospital’s need for outside agency nurses by 50 percent, a successful re-accreditation survey, successful surveys by the Center for Medicare and Medicaid Services, much improved public confidence in the hospital and the care it provides, and better relations with the Medical Staff. 
  • In his Foundation report, Earle Mauldin told board members that last August’s Bob Jones Golf Tournament sponsored  by the Highlands Country Club generated $110,000, and an additional donation of stock in the amount of $20,000 to the Foundation for support of the hospital.

    Mauldin also reported that the following Foundation officers have been elected for the coming year:  Earle Mauldin, chairman; Clem Patton, vice chairman; Jim Wilkinson, treasurer; Sam Magruder, secretary; and Charlie Sheehan, executive committee member at large. 
  • Governance Committee Chairman Dr. Don Mullen presented a recommendation that two new people be added to the hospital’s board of directors. From Highlands, the committee recommended Frances Oakley (Highlands and Charlotte), who is active in several community organizations and is the past chairman of the Highlands Community Child Development Center board of directors, and also a past member of the Highlands Country Club Board of Directors. From Cashiers, the committee recommended Lynn Dillard, who also has a long history as a community leader. Board members unanimously approved those appointments.

    The board will keep the same for the coming year, with Smith as chairman, Mullen as vice chairman, and Brenda Stewart as secretary.

  • Finally, Chairman Smith took a moment to welcome Earle Mauldin as a full member to the hospital board (by virtue of his position as the new chair of the Foundation Board), and to thank outgoing Foundation Chairman Bill Gaston and Foundation Board member Arthur Howell, both of whom are retiring as active members of that board. Both will become directors emeritus of the Foundation Board. Smith also presented a plaque Dr. David Register for his time, dedication and devotion to the hospital board. His term expired Sept. 30.