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MHLC looks to buy FHLC
MOVING FORWARD. At the Lafayette County Board meeting, held Tuesday, Sept. 27, 2016, the Lafayette County Board gave Memorial Hospital of Lafayette County permission to move forward with the purchase of Family Health of Lafayette County, the clinic and the property (buildings) owned by the clinic. Dr. Matt Solverson, owner of the clinic, requested the deal be done by Jan. 1, 2017.

LAFAYETTE COUNTY - Jack Sauer, chair of the Lafayette County Hospital Committee called the meeting held Thursday, Sept. 22 to order.
    Financials – The hospital in Aug. 2016 is way on the plus side with revenue at $1,332,316 after subtracting Medicare, Bad Debt, Medicaid and Commercial allowances Expenses are at $1,052,496 and this leaves a net gain of $279,056, that’s after “other” income and expenses were factored in. The year-to-date net income is at $129,373 – outpacing 2015 by $101,671.
    Overtime report – for Aug. 2016 is 248 hours. Year-to-date overtime for 2016 is 2,153 hours.
    The hospital has made an offer to a full time pharmacist and is waiting to hear her acceptance.
    Jim Pahnke reported on the nursery build-out project. A bid from Rielly Plumbing and Heating for HVAC for $12,000 will be accepted. A motion was made and seconded to approve the $12,000. Passed.
    The Nursery Build-out is an approved project where the nursery area is being transformed into an area where case management and conference room will be moving to. Then where case management was, on the first floor, the hospital will be moving the RT staff and they will be closer to the patients. The location where the RT staff is located will become the business offices, which is coming from their current location at the Manor. Julie Chikowski, Memorial Hospital Dept. Head said, “It’s a wonderful project, we’re very excited about it.” Matt Solverson added, “It will also add more rooms at the Manor.”
    IT report – The hospital is having an IT review, being done by Wipfli. There will be an analysis of the hospitals existing hardware, servers and software. Wipfli will put together a report on what computer hardware will cost the hospital to implement Epic next year.
    After closed session a motion was made to approve the purchase of Family Health of Lafayette County and Family Health land by Lafayette County. The final details to be approved at the next Hospital Committee Meeting. The motion was seconded and approve by voice vote. Solverson abstained.
    At another meeting the Lafayette County Hospital Committee, held Tuesday, Sept. 27 the committee went into closed session and then came out of closed session. Jack Wiegle, Lafayette County Board and committee member made a motion and it was seconded by Bev Anderson, committee member, to take to the County Board meeting, the purchase of Family Health of Lafayette County and land owned by Family Health. Motion carried by voice vote.

LAFAYETTE COUNTY – At the Lafayette County Board meeting held Tuesday, Sept. 27 discussion and action took place regarding the purchase of Family Health of Lafayette County (FHLC) by Memorial Hospital of Lafayette County (MHLC).
    Dr. Matt Solverson read a statement presenting his intentions and desire to sell Family Health of Lafayette County to MHLC. He also reflected on the past accomplishments and benefits the partnership have had.
    A power-point presentation by Jefferey Bramschreiber of Wipfli Consultants of Green Bay came next. The presentation outlined the reasons for this opportunity. Across the board free-standing clinics are seeing a reduction in reimbursements from Medicare, Medicaid and private insurance payors; increased overhead; increased regulations and physician recruitment and retention challenges.
    A hospital – physician integration such as that anticipated with FHLC would typically include the buildings/real estate. An appraisal in 2012 valued the three buildings at nearly $900,000. It would also include equipment & furnishing; medical/office supplies; trained workforce and active patient charts. A financial summery showed that the first year after the proposed purchase the clinic, the clinic could expect to operate at a net loss of around $160,000.
    However there are a number of opportunities, the key opportunity is the clinic could be converted into a hospital based health clinic. Medicare and Medicaid programs reimburse hospital health clinic’s differently than they do a free-standing clinic. The reimbursement system of a certified health clinic is based on costs and costs of operations. The difference can be significant. In Wisconsin Medicare will pay a free-standing clinic $90 per encounter, the average cost per encounter is $175, that would increase payments by $85 per encounter. An estimated 4,800 Medicare encounters per year for FHLC, at $85 per encounter, that would increase revenue by $400,000.
    Other opportunities for improvement include: Increased efficiencies of combining lab and/or ancillary services; improved insurance reimbursement rate by negotiating insurance contracts; reduction in certain operating expenses related to hospital bulk purchasing.
    Jack Sauer, Lafayette County Board chair asked, Would you expect there to be losses in the second year?” Bramschreiber answered, “Typically with the additional reimbursement, my answer would be no, I would not expect there to be a loss in the second year.”
    David Hammer, County Board member asked, “How many patients does the clinic see in one week?” Solverson responded, “If we share that number in public, it gives the other hospitals around us a competitive advantage, so I will not share that number. I have shared financial information with the hospital committee” Hammer said, “Well I haven’t seen those numbers and my answer would be no.”
    Sauer spoke, “Lafayette County has had a lot of trials and tribulations in health care. I’ve had people tell me we should sell the Manor. I’ve never been for that. I remember when the county bought the hospital for a dollar, I wish I would have bought the hospital for a dollar, because most years since that time, it’s been a money maker for Lafayette County. No matter where you live in Lafayette County the hospital lowers your property tax rate. If you let this slip out of our hands, you might as well close the doors on the hospital, because if another hospital buys the clinic, that clinic will be sending their patients to that hospital. This is an opportunity to get back in the market place and be competitive. This is a no brainer to me.”
    Sauer opened the floor to public comment. Several board members and people spoke in favor the purchase and relayed their positive encounters with the clinic and the hospital, including Dwayne Larson, John Bartels, Mary Knellwold, Bev Anderson, Homer Evenstad and Carol Korn.
    Luis Lopez, Lafayette Development Coorporation Executive Director stated, “The economic side – the customer comes to the clinic, if Dr. Matt sells the clinic to some other hospital, the clinic will send the customers out of the county.”
    Nicola Mauer, Finance Office Department head, pointed out, “This transaction would be borrowing $1.3 million by the county, but would be repaid by the hospital to the county. We’ve borrowed like this before, because the county can get the best rates. Why this is important is because it wouldn’t effect the taxpayer in terms of increased taxes.”
    A motion by Wolfe and second by Ruesga was made to allow the hospital committee to move forward with negotiations to have Memorial Hospital purchase Family Health of Lafayette County. Roll call vote resulted 12-1 in favor with Hammer the lone dissenting vote. Three members had excused absence.