A new administrator has been named at the Gunnison Valley Hospital, ending two months of temporary administration that helped solve a number of problems.
The post went to Mark Stoddard, acting hospital administrator at Nephi. Dr. Richard McDermott was temporary administrator and consultant.McDermott was hired to analyze a number of serious problems at the hospital - especially finances. His advice appears to have alleviated many of the problems at the small community-owned hospital.
Stoddard will work at both the Nephi and Gunnison hospitals through an agreement of shared services that includes a shared financial controller.
Meanwhile, Dr. Jan Christensen, chief of staff at the Gunnison hospital, described McDermott's accomplishments as "incredible and impressive." Sharing of services between the two hospitals was one of the recommendations.
At one point, closure of the hospital looked like a possibility, but Christensen said he is very optimistic about the facility's future.
"This rural institution will become a model for here and outside the state," he predicted.
McDermott was initially requested to provide a management review of the facility. This included checking into concerns over a lack of direction on the part of management, poor employee morale and questionable financial controls. He focused much of his time on the financial situation, selecting and installing a new accounting system, a materials management system, updating hospital charges, reducing accounts receivable and training personnel on the use of the computer systems.
These efforts were capped by recruiting a new administrator.
When McDermott appeared on the scene, the hospital was $180,000 "out of balance." This had happened mostly in the last year. "The books are now in balance and current statistical reports are accurate," McDermott said.
In addition, the hospital's accounting system was outdated and employees were inexperienced in computer use.
New systems were purchased that provide up-to-date records of accounting, admissions, discharges, transfers and payroll. Payments for services are now received more promptly, particularly from Medicare billings.
At one point, a percentage discount was offered to patrons on the accounts receivable list if they would get their accounts up to date. This resulted in receiving thousands of dollars that had been on the books for a long time.
Another weakness was found by McDermott and his associates - excess inventory. The hospital had an inventory of about $1,900 per bed. McDermott said those with good material management systems carry about $500 per bed.
Charges were also increased. These were only 65 percent of the average amount charged by other rural hospitals of comparable size. Some charges had not even been recorded.
McDermott also found an error in reimbursement for April by Medicare of $9,700. The hospital also lost $5,400 in one months in Medicare billings because of below cost charges.
It is now estimated that the agreement of shared services with the Nephi hospital will save Gunnison Valley Hospital about $50,000 per year.
Much remains to be done to improve the overall situation, but hospital board members feel there has been substantial progress and that this will continue.