A recent article in the Daily Sentinel detailed the “lengthy decline of [Memorial] hospital.” A recent Daily Sentinel opinion piece claimed “Memorial Hospital’s financial problems had been allowed to fester in the darkness or at least the shadows for far too long. Constituents of the hospital’s governing board have the right to know so they can make informed choices at the ballot box.”
We, as department directors of Nacogdoches Memorial Hospital, fully support transparency, and would like to remind you that our monthly board meetings are open to the public and to the media, where our financials are revealed every single month. Our board has not tried to hide our situation – it has been projected overhead on a monitor every single month for all to see and for you to report.
The Sentinel opinion piece also said that “an attorney with the Freedom of Information Foundation has chided the board for issues related to the Texas Open Meetings Act.” The implication that an official with a governmental entity has taken action against Nacogdoches Memorial Hospital or the Nacogdoches County Hospital District board of directors is patently false. It is our understanding that the Daily Sentinel reporter talked to a lawyer who simply gave his opinion in an article written by the Sentinel. We don’t understand how this could be reported as fact.
No one has tried to hide anything and our supposed “decline” is not the simple picture of board mismanagement you paint.
Healthcare in general and rural Texas healthcare in particular, has become an incredible challenge. It has been a long, hard road and all of us at Memorial, from the front line nurse aide to the highest level executive, have fought to sustain our hospital every step of the way.
We are nowhere near ready to give up that fight. We’re still here, with our heads high and our compassion intact.
You may not realize Nacogdoches Memorial Hospital is the largest charitable organization in Nacogdoches County. We give away approximately $1.3 million every single month in charity healthcare services to Nacogdoches citizens who qualify for assistance programs. This is not only required by the state legislative act that created the hospital district, it is the right thing to do. We are proud to be the safety net the legislative act intended us to be, but other industries don’t have the same challenges we do.
When was the last time you went to the grocery store, filled your cart, sacked up your groceries and walked out without paying? In the retail world that’s called shoplifting. In healthcare that’s called charity care; but free healthcare is not actually free.
Charity care is our mission, but there is a need that has overtaken and even surpassed charity. So far this 2018 fiscal year, an additional $2.3 million a month has been written off as bad debt – people who can’t, or won’t, pay what’s owed after insurance payments have settled out. That’s assuming they even have insurance. Texas leads the country with the highest number of uninsured. We also lead the nation in hospital closures.
The combined total of Memorial Hospital’s charity care and unpaid charges translates to over $43 million a year, on average. To offset that expense, we depend on insured patients to utilize our services. Without paying customers, the hospital can’t even begin to sustain the mission of taking care of the most vulnerable citizens of Nacogdoches County.
The Daily Sentinel articles point out that the last time Memorial Hospital saw a profit was fiscal year 2010, which ended on June 30, 2010. Interestingly enough, the Affordable Care Act (Obama care) went into effect in March of 2010. Texas officials opted to not expand Medicaid, so Texas hospitals did not receive many of the expected benefits from the Affordable Care Act. Overall, hospitals in Medicaid expansion states experienced growth in their Medicaid patient base, resulting in increases in Medicaid revenue, along with simultaneous decreases in the ranks of their uninsured and poor. Hospitals in non-expansion states, like Texas, saw few, if any, increases in their Medicaid population and a decline in Medicaid revenue. Texas hospitals, like Memorial, instead saw a growth in the cost of caring for the poor. As insurance premiums and deductibles sky-rocketed and benefits were cut, more and more of our patients found themselves with seemingly no recourse but to ignore the hospital bills they owed.
As employees, we certainly feel their pain. Between cuts to coverage and increases in premiums, co-pays and deductibles, our own benefits package has been altered repeatedly and drastically through the last decade. Because of those cuts to benefits and increases to our out-of-pocket expenses, many Memorial Hospital employees actually bring home less than we did eight years ago. And yet we’re still here, with our heads high and our compassion intact.
The payments we do receive for services rendered at Memorial Hospital arrive in a number of ways, but all are threatened. We receive Medicare and Medicaid funding, which accounts for 60 percent of our reimbursement; insurance covers another 24 percent and self pay accounts for 16 percent. Our operating revenue for fiscal year 2017 was $76.5 million.
Aside from reimbursements, we depend on several special funding streams. The first is the federal Disproportionate Share Hospital fund; we’re eligible to receive a portion because we serve a disproportionate number of low-income patients. In October the federal government cut the Disproportionate Share fund by $148 million (14 percent), so our already small share of that funding will undoubtedly suffer.
Texas’ Medicaid 1115 Waiver program is another source that reimburses Texas safety-net hospitals caring for uninsured patients. It was supposed to phase out in 2016, but Texas received an extension and is trying to convince the government to extend it again. The 1115 Waiver funds our Care First Clinic projects.
Intergovernmental Transfers (IGTs) allow Memorial Hospital, as the Nacogdoches County Hospital District, and multiple other governmental hospitals, to help the state of Texas pull down matching federal Medicaid funds, which are then dispersed amongst those participating hospitals. Having funds to send up is the non-negotiable requirement. You have to send money to make money, and it has been a struggle to draw that funding down because of cash flow challenges.
These three funding streams, plus a few other specialty programs that we depend on, result in an average impact of $3-$4 million per year.
Most people are aware of the one percent sales tax that the citizens of Nacogdoches County awarded to the hospital district in the early 1990s. The sales tax produces around $7 million a year and is actually constantly under threat from other local factions that are actively calculating ways to take that money away from the hospital and direct it elsewhere.
So let’s talk about economic impact. For the fiscal year that ended in June of 2017, Memorial Hospital paid just over $37 million in salaries. That translates to a lot of money invested locally by the hospital itself and by our employees.
Of the 718 employees, 95 have been with Memorial for 20 or more years; 23 of those are management level. Salaries are in line with experience and longevity at Memorial. We think it’s a great idea to reward loyalty by giving our employees the merit increases that they’ve earned, though, for management, we’ve only been able to do that once in the last five years. A lot of your attention was directed to some of our management salaries in that recent article, with comparisons that weren’t exactly fair in our minds. We cannot possibly know the basis for your interest in revealing multiple directors’ salary information so we won’t make any assumptions, but we can only hope you weren’t intentionally trying to create tension between colleagues and resentment toward management.
In 2017, Memorial Hospital admitted 4,527 patients; we saw 29,634 in the ER; and provided outpatient services 21,847 times. Our Care First Clinics and employed physician offices reported 40,265 patient visits, as well. We touched the lives of our community, one way or another, 96,273 times last year.
Though we’ve been doing so much with so little in the past few years, we remain committed to exceptional patient care. Though we certainly struggle to pay our bills, we are paying our bills slowly but surely. We appreciate our vendors who’ve been incredibly patient and who understand our mission of caring for all of Nacogdoches. Though our liabilities exceed our assets at the moment, we will continue to whittle away at what we owe. While the board looks for long-term solutions to our big-picture challenges, our team will continue to give our hearts and souls to the care of those who need us.
Yes, mistakes have been made. Board members were trusting, but steps were actually taken by the previous administration to make sure some department directors were not communicating with the board. One such step was to discourage some directors from attending board meetings. Another was to question some directors about their conversations with board members. Fear of retribution is a powerful silencer. Should board members have recognized that something was amiss sooner? That’s an easy statement to make in hindsight with the full benefit of two audits in front of you. As department directors and managers, we witnessed first-hand the series of small, seemingly harmless, situations that accumulated over time to paint what looks like a surprisingly sinister picture when viewed as a whole. Once investigations began, the situation was quickly handled by the hospital board.
In one recent article, our newest board member Banker Phares said, “You can’t sustain that [kind of loss]. I wonder how they’ve done it.” That’s a fair question. We’ve done it with the blood, sweat and tears of our staff and with the guidance of Community Hospital Corporation. Though CHC had officials in play as consultants, they were not actually managing the hospital under the previous administration. Those consultants were kept in the dark too. In the same article Mr. Phares is quoted as saying “If management cannot quickly supply practical recommendations, I think the board should engage — the earliest possible opportunity — the services of an independent specialist to provide advice and counsel.”
That’s exactly what the board did by hiring CHC as consultants in the first place and by ultimately signing the management agreement. Would it be financially prudent to start that process over?
As department directors of Memorial Hospital, we would respectfully request that the Sentinel and even some of our own board members stop searching for “gotcha moments,” learn the facts, help us find solutions, and support our hospital. Stop undermining the confidence of employees and patients alike. We also need those insured patients to help us fulfill our mission and we need our employees to continue to provide the stellar care they’ve always provided.
We’re still here, heads high, compassion intact.
-Jackie Laird, Richard Wallace, Mindy Winslow, Charles Akers, Lisa Rocco, Michelle Nash, David Schaefer, Toyia Urbaniak, Cathy Brooks, Amanda Horn, Katy Crawford, Lauri Omsberg, Laurie Godfrey, Reagan Moore, Dachiele Keeling, Jennifer Hornbuckle, Norman Moore, Ann Scott, Robin Lakey, Vanessa Hooper, Damaris Walston, Kim Barton