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Redwood Falls Gazette - Redwood Falls - MN
  • City, medical staff debate hospital finances

  • Nearly 25 area physicians, nurse practitioners, and specialists signed a joint letter presented to the Redwood Falls City Council Tuesday evening, asking the city not take over responsibility for the Redwood Area Hospital's finances.
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  • Nearly 25 area physicians, nurse practitioners, and specialists signed a joint letter presented to the Redwood Falls City Council Tuesday evening, asking the city not take over responsibility for the Redwood Area Hospital's finances.
    Doctors Joshua Friese and Gregory McCallum read the letter to the council. (See text at the end of this report.)
    After the letter was read aloud, Mayor Gary Revier responded by thanking the medical staff for their hard work and dedication.
    He said the decision to merge the city's and hospital's finances and administration was not something done lightly, or rushed.
    Revier said six years ago the council determined they would need to streamline the city's operations in order to keep the town viable, in large part because of declining amounts of funding the city gets from the state.
    He stated the city has already gone over the operations of every other department looking for ways to make operations more efficient and cost-effective, and has been successful so far.
    He cited the city merging with the Public Utilities as an example that "has worked beautifully."
    Revier then pointed out that the health care reform bill passed by the federal government is going to result in Medicare payments to the Redwood Area Hospital being reduced by 25 percent in 2014.
    "All hospitals have to look at how to streamline their operations," he said, adding "City staff know we have to stay flexible, and not be so entrenched. This is an experiment. If things are not working properly, we will change."
    In other city news, the council:
    • Reaffirmed its reasoning for terminating the employment of former Redwood Area Hospital CEO Jim Schulte.
    Schulte had requested a public hearing to discuss the issues, then had his attorney ask several hours before the council meeting that it be turned into a closed door session instead.
    When the council meeting was opened to the public again, the council issued the following statement:
    "The City Council has thoroughly reviewed the materials and 'Statement of Position' submitted on behalf of Mr. Schulte pursuant to Personnel Policy 15 and 16 and makes the following findings:
    "1) Mr Schulte's actions and subsequent plea of guilty to gross misdemeanor theft constitutes 'just cause' meriting termination for 'dishonesty, misconduct, and failure to observe laws or regulations.'
    "2) Termination of Mr. Schulte's employment is not disproportionate to the offense committed.
    "3) The Redwood Falls City Council has correctly interpreted, adhered and applied the Personnel Policy as it relates to Mr. Schulte's employment matter."
    The council then approved a motion upholding its actions during the Aug. 7 meeting when Schulte's employment was terminated.
    After the motion, Mayor Gary Revier said, "This matter is done by the city council."
    Page 2 of 3 - • Approved the creation of a new, full-time city airport manager position, terminating the current airport manager's contract effective Dec. 31, 2012.
    Currently, the Redwood Falls airport gets $150,000 a year in FAA entitlement funding cost-shared with the city at 90/10.
    The amount pays for facility and runway safety improvements, and $33,000 annually for maintenance, snow removal, and upkeep.
    However, the number of flights has declined at the airport in recent years. In 2005 there were approximately 11,600 operations (flights) at the airport; last year there were approximately 9,800.
    To keep the federal funding coming and to help pay for expansions of the runways and taxiways, the FAA has set 20,000 operations a year as the minimum acceptable.
    Currently, airport manager Dave Fuhr divides his time between supervising the airport, and a private business he operates out of the airport offices.
    City Project Manager Jim Doering said the city's goal is to find a full-time employee who both handles the day-to-day running of the airport, and enacts a marketing plan to get more businesses and pilots to use the airport.
    Councilor Jim Buckley said creating a new position was a tough call with current city finances, but the risk of losing up to $150,000 a year in federal funding made it justifiable.
    • Approved the hiring of Cathy Prouty as the city's new payroll coordinator.
    • Approved a downtown commercial rehab loan request application from Kathy Gag, of Falls Fitness.
    The renovation project consists of replacement of the building's windows and light fixtures, at a total cost of $11,288, divided into a $3,762 low interest loan and grant for the same amount from the city.
    • Approved a 2013 Hospital Employee Benefits program.
    • Set the November 20 city council meeting as the time and place for a public hearing requested by Garnette Gardens to discuss a request from the facility to issue housing revenue refunding notes for the purpose of refinancing a multifamily housing development.
     
    Letter to the Redwood Falls City Council, from area medical staff
    To the Governing Body of the Redwood Area Hospital:
    As members of the medical staff of the Redwood Area Hospital, we would like to ask the City Council to reconsider its recent decision to merge hospital and city administrative and financial operations.
    For decades the hospital has thrived as an independent, not for profit entity owned by the city. Increasing the city’s role in the hospital’s administration offers little advantage yet provides great risk to the health of the hospital.
    The revenue the hospital generates comes from many sources. Contracts with insurance companies take months of negotiation and intimate knowledge of our hospital’s unique position.
    State and federal programs, such as Medicare and Medicaid, have a myriad of requirements, as we are sure you know. Navigating these requires much experience with these programs.
    Page 3 of 3 - The partnership with ACMC that the hospital has entered into has been successful financially and also in continuing and expanding our services locally. The leadership of the hospital who has a history and rapport with the clinic administration developed this partnership.
    It is only with much attention to all of these that the hospital remains profitable. Adding another layer of bureaucracy to this system can only negatively affect the financial health of the hospital. Are you willing to commit the time and resources to maintain the viability and health of our hospital?
    According to our interim CEO, there is no municipal hospital system in the state of Minnesota that has this much government, either city or county, involvement. Renville County Hospital has actually chosen the opposite, and does not want to deal with the complexity of healthcare and gave power to the hospital commission, just as it was in Redwood a few years ago. According to the doctors there, everyone is in agreement that it is going very well.
    As we search for a new CEO, we feel this lack of independence will make the best candidates wary of starting a job where they would have little power to lead their organization.
    We feel this same problems applies to the current staff at the hospital. The previous culture was improvement, safety and providing good healthcare. The hospital employees on all levels worked as a unit.
    We believe these changes will only hinder this culture and break down the cohesiveness of this unit. We run the risk of losing excellent employees who are good at what they do.
    The hospital already provides a generous amount of its revenue to the city. This has been possible only by the success of the previous arrangement of oversight of hospital affairs by the hospital commission who have more time and flexibility to devote to the hospital’s needs than the proposed arrangement with the city council.
    Without the ability to have decisions made by the ones who are most familiar with the complex issues surrounding healthcare financing we feel our current profitable hospital could quickly deteriorate.
    This would jeopardize the ability for it to provide the high level of service it currently does as well as the revenue it provides to the city.
    Several people have asked us if the city plans on selling the hospital because of the current reorganization. We believe the people, patients, and Medical Staff want to remain a viable city owned hospital.
    Please reconsider your decision to merge city and hospital administrative departments, as it seems to provide far more risk than benefit.
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