Health

Monday, Dec 09 2013 07:57 PM

KMC still under water but catching its breath

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    By Casey Christie / The Californian

    Kern Medical Center in Bakersfield on Mt. Vernon Avenue.

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BY RACHEL COOK Californian staff writer rcook@bakersfield.com

In their ongoing quest to corral Kern Medical Center's finances, Kern County supervisors Monday learned of a $1.8 million unbudgeted expense, but found positive news from reports of better fiscal managment and reduced staff costs.

The hospital's operating expenses outpaced revenues by about $8.6 million in the first four months of the county's fiscal year, which began July 1. That figure was about $2.3 million more than the losses planned for in the hospital's revised budget.

But the hospital received $13 million from the county that had been approved in October to help cover anticipated shortfalls during the fiscal year. The hospital is still, however, looking to reduce spending by $6.8 million.

The mood at the Board of Supervisors' monthly meeting at KMC was upbeat as supervisors focused on two pieces of good news. Chief Financial Officer Sandra Martin said the hospital's business office is bringing in about half a million dollars more a week than it has historically. In addition, the hospital's loan balance came in about $10 million less last week than was expected -- at $80.9 million.

Supervisor Mick Gleason complimented Martin for the improvements.

"I'm proud that you have done such an outstanding job, you and your team, of 'applying' the right pressure points and the right stress at the right places at the right time to improve our situation," Gleason said.

Martin explained that the $1.8 million liability coming due is tied to a grant for out-of-network emergency room costs for the Low Income Health Program -- which transitions people into health care coverage in the runup to the Affordable Care Act. She said this isn't a situation where KMC erred, but one where high use of that part of the program triggered a clause in the grant requiring public hospitals to pay back some of the money. KMC will pay back the $1.8 million in three payments; the first payment of $751,000 is due by late January.

After Martin's reports, supervisors turned their attention to a recommendation from County Administrative Officer John Nilon -- KMC's outgoing interim CEO -- to cut staffing costs without laying off any county employees. Nilon's report said KMC could save an estimated $6.8 million by cutting down on "overtime, extra help staff, per diem staff, traveler staff and contract positions."

Though Nilon stressed no layoffs are planned, one hospital employee said workers have heard otherwise.

"I've had several employees come to me and say their supervisor told them they were gonna be laid off," said Carmen Morales-Board, a nurse practitioner and SEIU Local 521 chief shop steward at KMC.

Nilon said he understood how there could be confusion as layoffs had been mentioned as a possibility earlier this year, and staff had talked about making up for the hospital's losses out of salary and benefits account.

After the meeting, Martin said the hospital isn't filling positions in support departments, but is not taking away work hours directly related to patient care.

"We're not using overtime. We're not using extra help. We're going without filling some vacant positions," she said.

Nilon's report also noted that some physician and staff have taken voluntary pay cuts and furloughs. Monday's board agenda noted cuts totaling more than $90,000 to three contract doctors' pay.

Before the financial talk, the meeting opened with other hopeful news. Chevron is donating $50,000 to the hospital to fund a pilot project to explore the immunogenetics of valley fever with KMC patients.

Royce Johnson, Kern Medical Center's chief of infectious disease and professor of medicine at UCLA, told the board immunogenetics is the understanding of why most people who get valley fever never become ill, while others become modestly sick and others "develop a devastating illness."

"It is possible with this grant that we could hit a home run and actually have a substantially better understanding of why people suffer from this disease," Johnson said.

A successful pilot could also help secure funding for a bigger study.

Russell Judd, who takes over as KMC's new CEO next week, and Scott Thygerson, Judd's chief strategy officer, attended the meeting.

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