Last October, Wise Regional Health System made a deal to buy three nursing facilities owned by Sava Health Systems.
The “win-win” arrangement, sought by Sava, allowed the Decatur-based hospital system to be the owner and reap the profits while Sava continued to lease and operate the facilities – which would qualify for a higher reimbursement rate from the state once they were owned by a public hospital.
In fact, over the last few months Wise Regional has acquired nine nursing facilities under similar arrangements, purchasing them, then leasing them back to the operators.
But Tuesday, the deal with Sava got scratched.
“Sava Health Care came in at the last minute and said they needed to have a security interest in the operating account of those three facilities,” Wise Regional Chief Executive Officer Steve Summers told his board Monday night. “Our bond counsel advised against giving them the right to do that. We would basically have to get approval from every one of our bondholders.”
At Monday’s meeting, Summers proposed an alternative to his board to allow Wise Regional to acquire five other nursing facilities from Cantex Health Care if the Sava deal got scrapped.
It did, and they did.
“We gave them [Sava] until about noon,” Summers said Tuesday afternoon. “The paperwork had to be filed this afternoon – and it was a lot of paperwork.”
Summers said he was surprised Sava stuck with the demand.
“It’s a significant amount of money they walked away from because of their bank,” he said.
The five Cantex nursing facilities Wise Regional will acquire instead are located in Gainesville, Denison, Allen, Richardson and Flower Mound. Summers said they will bring in about half as much revenue as the three Sava facilities would have.
With a little advance notice, he added, Wise Regional could have easily done better.
“If we’d known even a month earlier, we could have replaced these dollar-for-dollar,” he said. “Cantex had some other facilities we could have picked up.”
The board on Monday authorized Summers and Chief Financial Officer Todd Scroggins to take whatever action was necessary to complete the transaction with Cantex if Sava withdrew. By late afternoon, that had been done and the documents filed with the state.
In his monthly financial report, Scroggins said he had already “booked” more than $900,000 from the nursing facilities, although the cash had not yet been received.
Administrator Donna Stowers, who is overseeing the nine facilities, reported to the board that all of the management companies have been “very cooperative” as she works to integrate them into the Wise Regional system.
“We’re working on a plan for reporting nursing home information,” she said. “You’re bombarded with a lot of data, automatically.”
Stowers is looking at data from a variety of sources, while also making personal visits to each facility at least once a month – standing appointments as well as drop-in visits.
“It’s kind of been a challenge to get it all set up, but it’s exciting,” she said.
2014 ENDS ON STRONG NOTE
Scroggins told the board December was the biggest month in Wise Regional’s history, by several measures.
- Gross patient charges were $54 million
- The average inpatient census was 74 – compared to 62 at this time last year
- There were 838 surgeries performed in December, “definitely a record.”
He said the Parkway surgery center continues to do well, netting about $275,000 for the month of December. The Bridgeport campus, in its last month as a full-service ER, lost about $279,000. It reopened as an urgent care center Jan. 2.
The hospital’s net position increased by $8.2 million during the month in spite of the higher expenses that come with the higher patient volume. Overall, the hospital has $49.9 million in cash reserves.
“On a consolidated basis, we ended the year with 104 days of cash [in reserve],” he said. “That’s reasonably respectable, although not where we budgeted. But the debt service days of coverage more than covers our bond covenants.”
NURSES DEALING WITH HIGH VOLUME
LeeAnn Cummings, Wise Regional’s Director of Nursing, told the board in spite of the 20 percent increase in volume in the hospital’s medical/surgical unit, the facility is still below the national average for turnover in nurses.
Wise Regional employs 321 RNs, 62 LVNS and 173 ancillary staff – a total of 556 nursing personnel including 46 at the Parkway campus.
Cummings said staff training and education remains a major focus, including training hospital-wide on dealing with Ebola. Orientation for new nurses has been bumped up from 1 to 2 days, and staff are also getting trained for the addition to the dialysis center, which will have the ability to do peritoneal dialysis sometime in 2015.
She noted that Wise Regional had 597 babies delivered during the year, along with 25,571 visits to the Decatur Emergency Room and 5,197 visits to the ER in Bridgeport. There were 3,444 hospital admissions that came from ER visits.
The hospital performed 8,244 surgeries in 2014 compared to 7,694 in 2013.
They treated 1,364 cardiac patients, losing 67 of those. That volume was up 17 to 18 percent.
The board also:
- voted to purchase a 3M Patient Coding System at a cost of $514,891 for software, hardware, installation and training;
- accepted medical executive committee recommendations on new appointments;
- heard about two upcoming events – an open house for the new Wise Regional Sleep Wellness Center on the West Campus Wednesday, Feb. 4 from 11:30 a.m. to 1 p.m. and the Wise Regional Health Foundation’s “Hearts for Hope” Gala Saturday, Feb. 14 at the Decatur Civic Center, benefiting the hospital’s Critical Care Unit;
- noted that Wise Regional is currently undergoing four government audits, two of which have netted returns to the hospital and two that are ongoing with results anticipated in February;
- approved the appointment of Marti Hines to the Wise Regional Health Foundation board of directors;
- authorized Summers and Scroggins as signers on behalf of the Decatur Hospital Authority for both the FICA and ICSA accounts and
- approved Scroggins as treasurer of Wise Regional Health System.