Lawrence Memorial Hospital board approves 2016 budget

The Board of Trustees has approved Lawrence Memorial Hospital’s 2016 budget.

The hospital is projecting revenue of more than $213 million, an increase of $10 million over 2015 (ending in August). Overall expenses are budgeted at $203 million, an increase of $17.5 million over August 2015.

The hospital in a press release attributes the rise in expenses to costs of additional staffing, employee benefits, technology maintenance, and rising supply and drug costs.

LMH expects increases in revenues from inpatient and outpatient services, but the hospital expects those gains to be offset by limited payment increases from fixed-rate contracts like Medicare, regulatory expenses, contractual reductions and other costs.

“The upcoming year is certain to be challenging for LMH,” said hospital President and CEO Gene Meyer in the press release. “The focus in 2016 will be to maintain current levels of financial performance while continuing to improve quality and patient satisfaction in the new reality of lower payments.”

To offset expenses, LMH plans to increase rates overall by 5 percent as well as a 3 percent increase in physician practice charges. Those increases will take effect Jan. 1.

For 2016, total capital expenditures are projected at nearly $15 million. Among the items on the capital budget that cost more than $100,000: replacing the hospital’s 11-year-old magnetic resonance imaging system at a cost of $1.8 million, and the second phase of the remodel of the inpatient rehabilitation unit and the skilled nursing unit.

While the units were fully functional and provided the same quality of care as the other units of the hospital, it had a “vintage” feel, Meyer said in the board meeting.

“This will allow us, at least from an aesthetic standpoint, to meet the care (needs),” Meyer said.

The budget also includes $15.3 million in projected write-offs for patients who apply for and meet requirements for financial assistance.

During the meeting, the board also approved the members of the search committee who will help the hospital find a new CEO when Meyer retires in May.

Board member Rob Chestnut, who will lead the committee, said now that the committee members have been approved, they would be in contact with search firm Witt/Kieffer and plan for a meeting in a couple of weeks.

Chestnut said that search firm representatives were in Lawrence in October conducting stakeholder interviews and getting information from an employee survey. They will be forming a job description and desired candidate characteristics based on that feedback. Chestnut said he expected the search process to pick up after the first of the year.

The members of the search committee:

Rob Chestnut – Chair

Cindy Yulich – Board of Trustees Chair

Allen Belot – Board of Trustees

Dr. John Keller – incoming Chief of Staff

Dr. Kevin Stuever – Internal Medicine Group

Dr. Neal Lintecum – OrthoKansas

Reggie Robinson – School of Public Affairs and Administration, KU

Sandy Praeger – former Kansas Secretary of Insurance

Becki Dick – current Board member of LMH Endowment Association

Traci Hoopingarner – LMH nurse

Matthew Herbert — Lawrence City Commission

In other action:

  • Lawrence Memorial Hospital received the Top Performer recognition for 2014 from The Joint Commission, an accreditor of health care organizations in the United States. LMH was recognized for its achievement in heart attack, heart failure, pneumonia, stroke and surgical care. It is the fourth year LMH has been recognized by the commission, and the first year for recognition in performance for strokes. To be recognized, hospitals meet performance criteria on data that measures healthy outcomes for patients.
  • Based on the financial performance in 2015 and to recognize LMH employees for achieving the 100 Top Hospitals recognition, Meyer recommended bonuses for employees, which were approved by the board. Bonuses range from $200 to $600 per employee, including part-time staff members.
  • CEO Gene Meyer announced that he participated on Nov. 11 in a mental health consortium meeting that was part of the Justice Matters consortium. Meyer said the group formed three subgroups to look at specific topics:
  • Feasibility study for a crisis unit to be associated with Bert Nash and funded by the county.
  • Access to mental health care in the community.
  • Early intervention and prevention, which focuses on childhood development needs.