RMCH downsizing to make a profit

Copyright © 2009
Gallup Independent
By Bill Donovan
Staff writer

GALLUP — Officials at the Rehoboth McKinley Christian Hospital reported Wednesday making a profit for the second month in a row.

Pat Wolfram, interim CEO of the RMCH, said the positive cash flow for February and March brings the hospital into the black for the fiscal year by $58,000.

Hospital officials were reporting that the hospital was in the red for the year in January after writing down $1.6 million — more than three times the usual monthly amount — in bad debts. Since then, the hospital has been taking a number of steps to reduce operating expenses to bring the budget back in line.

Wolfram said these efforts will hopefully allow RMCH to continue showing a profit in the next few months so that the hospital will be able, as it has for the past three years, end the year in the black. Whether the hospital is successful, however, may depend on how well the hospital does this summer, traditionally a slow time that sees fewer patients and fewer admissions because of the decrease in visits for patients with colds, the flu or pneumonia.

Besides holding delaying salary increases, hospital officials have been downsizing in the aftermath of selling off its dialysis operation to two local doctors.

Wolfram said that while the clinical staff was transferred over to Red Rock Dialysis when it started operation in September, the support staff was not, since the company opted to go with an outside company to handle its billings and maintain its financial records.

As a result, RMCH found itself overstaffed in some areas, she said, and department directors were instructed earlier this year to consider their staffing needs and reduce staff levels to meet the current needs. As a result some 20 positions have been eliminated and several employees have had their hours cut.

Almost all of these are in finance and billing, Wolfram said, but a couple of other positions, such as quality control, have also been eliminated.

Figures supplied by the hospital show that the hospital expects to save $325,000 in salaries and benefits for the rest of this fiscal year and $780,324 annually thereafter.

“By doing this and holding down everyone’s salary and doing some other things, we have been able to cut expenses by about $2.2 million a year,” Wolfram said.

She said that in one case, an employee had his hours cut back and had them reinstated a little later when work productivity increased.

This is the second time in three years that the hospital has downsized, and this recent effort has resulted in some employees questioning the move, in part because Wolfram is an interim CEO and actually works for B.E. Smith. Smith is now coordinating the search for a permanent director for the hospital and has a contract to place some of its employees in certain key positions that are now unfilled.

The layoffs, almost all of them local employees, has led to speculation by some that the company plans to fill these positions in the future by people it recruits nationwide and then charge the hospital a finder’s fee.

But Wolfram said that’s not going to happen and these positions will not be refilled once the hospital gets in better financial shape.

This brought up the question of just how much money Smith is charging the hospital for it services.

Wolfram said she didn’t know the exact figure but pointed out the cost for her services to the hospital is less than the hospital was paying to its former CEO, Chuck Wright.

Wright was making a salary of just over $200,000 a year.

She added that there are two other Smith employees now in other positions and as people are found to fill these positions, the Smith workers will be replaced.

As for the question of taking these actions while serving as an interim director, Wolfram made it clear when she took over the position in January that she was not a caretaker and planned to take action if she felt it was needed to maintain a stable financial environment.

Speaking about the search for a permanent director, Wolfram said that’s continuing and the board is now reviewing applications and videos of the leading candidates with plans in the next few weeks of reducing the number to a list of finalists who will be brought to Gallup for face-to-face interviews.

In another matter affecting local health care, ground breaking ceremonies were held Wednesday for the new kidney dialysis center.

The new center, once it opens up in nine months or so, will double the number of stations available to provide dialysis services for the area. Local doctors said that these new stations are desperately needed since some Gallup-area patients are being required to go to Zuni for treatment three times a week while some patients in the Crownpoint area are being transported to Farmington or Albuquerque for treatment.