St. Charles changes

by: HOLLY M. GILL - The St. Charles Health System, including St. Charles Madras, is facing changes due to increased costs and decreased revenue.With increased costs and decreased reimbursement an ongoing issue for St. Charles Health System, St. Charles Madras will be feeling the effects.

St. Charles Madras CEO Jeanie Gentry will take on the dual role as CEO at Pioneer Memorial Hospital in Prineville, in addition to her duties in Madras. The current CEO at the Prineville and Redmond hospitals, Bob Gomes, will become the CEO for St. Charles Bend and Redmond.

"I have a really great team in Madras, and they're going to be just fine if I'm in Prineville," said Gentry, who will be dividing her time between Madras and Prineville.

"Bob Gomes has done a wonderful job putting together a really strong team of leaders and caregivers in Prineville, so those people will make it possible, too," she said.

Former Mountain View Hospital CEO Jay Henry, of Bend, who became the CEO at St. Charles Bend in January 2009, after three and one-half years at Madras, has had his position eliminated, along with Kirk Schueler's. Their final day with the organization will be Jan. 3.

Schueler, of Bend, was formerly the president of Brooks Resources Corp., which was a partner in the Madras Land Development Co., which developed Yarrow on the east side of Madras. Schueler voluntarily resigned his position as chief administrative officer for St. Charles.

According to spokesperson Lisa Goodman, "St. Charles is reducing its expenses by $5.2 million due to decreased reimbursement and increased costs."

"In order to protect frontline caregivers' jobs, about $2.4 million will come from a reduction in force at the management and leadership levels of the organization," she said, noting that the timeframe for the reduction in force is uncertain.

The elimination of Henry's and Schueler's positions will save just over $700,000 in compensation toward the $2.4 million.

The remaining $2.8 million in cuts will come from other, as yet undetermined, expenses. "We'll figure that out going forward," she said.

A variety of factors are influencing the hospital's revenue picture. "The Affordable Care Act certainly plays a role, but the declining reimbursement from commercially insured patients, along with the increase in number of people who are insured through Medicaid or Medicare, which pay significantly less, is largely responsible for our decrease in revenue," she explained.

Five years ago, in 2008, 47.1 percent of patients were on Medicare, 9.7 percent insured through Medicaid, 37 percent commercially insured, and 6.1 percent were self-pay.

In 2013, 52.6 percent were on Medicare, 15.2 percent were on Medicaid, 26.9 percent were on commercial insurance, and 5.3 percent were self-pay.

The total of Medicare and Medicaid patients was 56.8 percent in 2008, rising to 67.8 percent in 2013. At Madras, the total rose from 50 percent to 71.8 percent.

In Madras, in 2013, there were 40.5 percent on Medicare, 31.3 percent on Medicaid, and 21.8 percent commercially insured.

The Medicare number was up substantially from 30 percent, and Medicaid, from 20 percent in 2008. A total of 9 percent were self-pay, 9 percent Warm Springs, and 32 percent commercial in 2008.

"You can’t underestimate the effect these payer mixes have on our bottom line," Goodman said. "The effect has been profound."

At St. Charles Madras, Gentry said, "We're much further in the hole than I had anticipated. We had to put together a budget for fiscal year 2012-13, and we're not breaking even."

For the last full year of Mountain View's operation, total operating revenues were $25,102,346, with expenses of $25,314,157, for a loss of $211,811.

For the first six months of 2013, total operating revenues were $13,330,384, with expenses of $13,257,291 — leaving operating income of $73,093.

"Next year, with all the changes in Medicare and Medicaid, it's going to change even more," she continued. "That's part of the challenge to look at our budgets and see how we can streamline even more."

Since Mountain View Hospital merged with St. Charles at the beginning of the year, she said there are fewer people working in Madras, because of centralization of departments, such as billing, marketing, scheduling, finance, medical records and information technology.

In 2008, there were 241 employees at Mountain View Hospital and Living Center, along with clinical staff for Madras Medical Group, for a total of 214 full-time equivalent positions. In October, there were 194 caregivers, for a total of 146.8 FTE positions — down over 67 positions since 2008.

"When we did the merger last year, everybody was promised employment," she said. "Most of the people are still there. Some people decided to work somewhere else. Just recently, a couple departments had a few too many people for the amount of work there was, so we let a couple people know that there won't be jobs in Madras, but they can accept other jobs."

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