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Posted by Karrey Britt October 15, 2008 at 2:33 p.m.

LMH board talks about financial viability in October

Here are some notes of interest from the Oct. 15, 2008, Lawrence Memorial Hospital board meeting:Despite rough economic times, Lawrence doctors and residents can rest assured that the local hospital is in "good standing" and should be able to weather the storm.Chuck Heath, finance committee chairman, said LMH is having a "solid year." So far, the net income is $8.6 million, which is 11.6 percent over what has been budgeted.Simon Scholtz, chief financial officer, said the hospital has $66 million in investments. Most the money is in U.S. treasuries, government agency funds and bank accounts, which are considered safe investments."We are comfortable with who we are working with," he said. "We are in good shape."CEO Gene Meyer reminded board members that while $66 million sounds like a lot of money, that is a pretty standard reserve for the hospital's size."We need to maintain that," he said.Meyer said a number of employees had inquired about the vitality of the hospital during this economic storm."They should be assured that we are in good shape."But predicting the future is tough. The hospital is nearing the final stages of completing its 2009 budget. Meyer said most analysts are predicting flat growth for hospitals. He said some were saying that if 2009's revenues matched those in 2008, they should consider themselves lucky.Meyer said they were predicting flat growth in inpatient procedures for 2009, but a slight increase for outpatient procedures."It's difficult to predict," he said.The LMH Endowment Association also is closely monitoring its assets and capital campaign money. Kathy Clausing, vice president and chief development officer, said there are 341 pledges worth $2.5 million that remain to be collected from an $8.2 million capital campaign that ended last year. Clausing said the donors are honoring those commitments."We are staying right on top of it," she said. "We are watching things very closely."¢¢¢City Manager David Corliss, a guest speaker, discussed the sales tax proposals for city streets, infrastructure and public transportation. He said about 20 percent of the T Lift users are transported to the hospital.When a board member asked how optimistic he was about the proposals passing, Corliss said he was optimistic but the economy was a concern.He said passing the sales tax proposals would translate to a "healthy" infrastructure and transit system for the community.Another board member asked why the city put three questions on the ballot instead of one. Corliss said he wanted to give the community options."We wanted to offer an a la carte," he said.¢¢¢The new $13.5 million, 29,500-square-foot surgery center is on schedule and under budget by $295,000, said Allen Belot, a member of the facilities committee. They hope to have the exterior completed before winter sets in. The center is scheduled to be completed by the end of March. The mother/baby unit is finished and has been turned over to the hospital.The $6.2 million, 46,000-square-foot medical office building is on schedule and expected to be completed by August 2009. There's been a slight holdup on some work because the city changed from a universal building code to the national building code, which necessitated some of the drawings being resubmitted.The recent hospital expansions haven't translated into consistently higher utility bills. From 2007 to 2008, the hospital's size increased by about 70,500 square feet. The gas usage has slightly increased each month this year compared to last year, but electricity use slightly dipped during four of the past nine months. Water usage had decreased five of the past nine months when compared to the previous year.¢¢¢The medical office in conjunction with the credentials committee performed an audit of the office's credential activity from Jan. 1 through July 16. During that period, 15 new applicants were processed. They found that it takes an average of 75 days from the receipt of an application to board approval. That's average for most hospitals of LMH's size and well below the 135 days that are required in the by-laws.Board members found the audit enlightening and would like see it done once a year.¢¢¢The hospital has approved a five-year contract with Cerner Corp., which will provide technical hosting services for clinical information systems at the hospital. Jane Maskus, chief information officer, said the transfer to Cerner would be seamless for employees, physicians and patients.She said the switch is projected to save the hospital about $1.5 million over five years. She expects the transfer to be done by the end of April.