LMH starts to see finances improve as pandemic restrictions ease; big changes on tap for emergency room doctors

photo by: Chris Conde

LMH Health is pictured in a file photo from October 2018.

LMH Health is starting to see a small change in its finances as surgeries and other procedures have started occurring again after pandemic-related restrictions have begun to ease at the hospital.

But on the change front, it is the hospital’s emergency room that may soon see a large one. Members of the hospital’s board of trustees were meeting Wednesday, largely in a closed door executive session, to determine whether to end a 25-year contract with a locally owned physicians group that runs the day-to-day operation of the emergency room. In its place, hospital leaders are considering hiring a much larger out-of-town group to take over the day-to-day operations of the community’s only emergency room.

Hospital board members were in executive session for more than two hours, and were still in the closed-door meeting as I started writing this article. I’m expecting information on a decision later today, so check back for an update.

UPDATE: 4:38 p.m. Wednesday

Hospital officials have confirmed that they have reached a tentative deal with Envision Physician Services, a national firm that provides emergency room services for hospitals like St. Luke’s and Overland Park Regional Medical Center and many others in the KC metro area and across the country. The deal will be for Envision to provide doctors and other advanced practitioners to staff the emergency room and to run LMH’s hospitalist program, which is a group of doctors who see many patients who have been admitted for inpatient care. Nurses and other nonphysicians who work in both departments will continue to be LMH employees.

The pending deal will end LMH’s more than 25-year relationship with Lawrence-based Lawrence Emergency Medicine Associates, which was founded by local ER doctor Scott Robinson in 1994. Robinson expressed extreme disappointment in the decision, and said there could be a high turnover of doctors in the ER. Hospital leaders acknowledged the decision was difficult to end the relationship with the local company, which they said had provided high quality care to patients. But hospital leaders said the difference in price between the two providers could be about $5 million over three years, and they said they hope Envision reaches deals to keep many of the existing doctors.

Check back for a more complete article on this developing story.

UPDATE: 7:01 p.m. Wednesday

LMH reaches tentative deal to shake up management of emergency department and other doctor staffing

So, for now, on to the general finances of the hospital. In a nutshell, the hospital’s finances improved in May, but LMH still posted nearly a $1 million operating loss for the month. It says something about the state of the world currently when a $1 million monthly loss is as sign of hope, but hospital officials said the latest results were a good sign.

“I don’t know if it is a light at the end of the tunnel, but it certainly isn’t as dark,” LMH President and CEO Russ Johnson told board members.

That’s because the nearly $1 million operating loss — $913,729, to be more precise — represented a slowdown from the $11.5 million in operating losses that have accumulated in the first five months of the year. Most of those losses came in March and April. The hospital on March 18 stopped performing pretty much all surgeries and procedures that were not of an emergency nature.

That caused the number of patients visits at LMH and its associated clinics to drop to about 450 per day at its low point. That’s down from normal numbers of close to 1,700 per day, Johnson said.

The hospital resumed many surgeries and procedures beginning in early June. Johnson told the board that visits had risen to 1,450 earlier this week, as a result.

“We have done the work to be a safe place for patients to come back to,” Johnson said. “We have the will and the desire to take care of people. We want people coming back to take care of their needs.”

The pandemic hit at a time that the hospital was just starting to see improvement in its finances after 2019 results were historically bad. The hospital finished 2019 with a nearly $16 million operating loss after it had budgeted to post an approximately $11 million operating profit.

Rising labor costs and reduced reimbursements from major insurance companies, like Blue Cross Blue Shield of Kansas played a major role in those losses. The hospital since has negotiated new payment terms with some of the largest insurance companies in the area. It also is undertaking efficiency measures — including reducing staffing levels to better match patient levels — in an effort to control costs.

The decision to halt all nonemergency procedures at the hospital wiped out the gains the hospital had started to post in January. Board members, though, were told that the hospital continues to have enough cash to meet its operational needs.

LMH received approximately $7 million in grant funds from the federal government to help offset pandemic costs. The federal Medicare program also has provided the hospital a $28 million advance on Medicare payments to help the organization meet cash flow needs, Deb Cartwright, chief financial officer for LMH, told the board. She said she expected hospital activity to continue to gradually increase in June and July.

“This is where we start and rebuild,” Cartwright said.


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