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Hospital board discusses building purchases

By Staff | Jul 25, 2020

Sue Sitter/PCT The purchase history of the Heart of America Johnson Clinic building was a topic for discussion at the Good Samaritan Hospital Association board meeting on July 20.

The Good Samaritan Hospital Association Board of Directors discussed real estate transactions among other matters at their regular monthly meeting Monday morning.

The board voted to accept payment for the former Premier Lube building on Main Avenue and transfer the deed to Josh Gruenberg.

The board also discussed the purchase of the Johnson Clinic building from the Rugby Job Development Authority, and improvements needed on the clinic building.

Heart of America Medical Center CEO Erik Christenson told the board the JDA originally purchased the clinic building in 2009 for $700,000. “It was assessed for around $200,000,” Christenson said. “So, it was purchased for about three times the value of the property.”

JDA board member Jodi Schaan told the hospital board the 2009 purchase had been financed with multiple loans. One loan, financed by Bremer Bank remains.

Christenson presented three options for purchasing the building.

The first, a five-year contract for deed, would require the JDA to continue paying on their existing loan, and Heart of America Medical Center to pay its current rent of $4700 per month, totaling $280,000. Christenson said the JDA has $170,000 left on the loan.

Christenson explained HAMC’s current rent payments come from businesses in the clinic building.

“We sublease to the pharmacy, the eye clinic and the dental office,” Christenson said. We get our rent paid for by those businesses.”

Another option Christenson presented was a three-year contract for deed, with $4700 monthly payments, totaling $180,000.

“Or,” Christenson said, “you can go to the JDA and say, ‘You are promoting positions. We’re the leading employer in the county by far, so for the benefit of the hospital, you can do a contract for deed and pay $2,700 a month, and we get it for about $100,000.”

“Let’s see if the JDA and the city would be willing to do something like that for the hospital,” Christenson said.

Board member Craig Zachmeier made a motion to send Christenson and Board Chair Will Griffin to meet with the JDA to negotiate the building’s sale. The board approved the motion.

Christenson said a lower price would allow for needed improvements to the clinic building, which include a smoke detection system and entryways and bathrooms compliant with the Americans with Disabilities Act.

The board also discussed plans in the works for new clinic flooring. Chief Financial Officer Melissa Shepard told the board the cost of new flooring was “100 percent covered” by grants from the Health Resources and Service Administration, a federal agency. Shepard said the new floor would “decrease infection risk, increase the ability to clean the clinic and make a more sanitary environment.”

In other business, Christenson presented findings from the hospital’s recent Community Health Needs Assessment, or CHNA.

Christenson said the assessment identified four major concerns.

The first was “attracting and retaining young families,” Christenson noted. “We’re going to be updating our practices and hopefully that will help us bring in young families and attract young families.”

Availability of mental health services also appeared as a top concern. “We are adding mental health to the clinic, so we are addressing that,” he said.

Another concern identified was employee health insurance costs. “We are looking at stressing a wellness program for our employees to hopefully bring down our insurance costs and overutilization of the ER,” Christenson noted. “We’re spending 106 percent of our premiums.”

Christenson added a fourth concern: “There are not enough jobs with liveable wages we’re working on revenue cycle improvement to finance the hospital and make sure our wages are in line with (other facilities in the state). Most hospitals at this time are cutting jobs and cutting wages, and we have not had to do that.”

Christenson reported he planned to restart “CEO Circles,” a program to foster communication with frontline health workers. He added he plans to update non-health insurance benefits and employee policies.

The board approved the monthly financial report presented by Shepard.

The report included data from revenue tracking software, which, according to Christenson, “would enable the usage of funds by the US Department of Health and Human Services.”

Christenson said revenues dipped sharply from March through June due to the outbreak of COVID-19. Losses for the three-month period totaled $1.1 million.

“Annualize that out, it ends up being 4.4 million,” Christenson noted. “I don’t know if it will continue that way, it might, but that is the loss due to COVID for three months.”

Shepard reported 33.46 days of operating cash without the available HHS funds.

“Swing bed days have increased from 71 in April to 175 in June,” She noted, adding, “Outpatient visits increased since April and May.”

Shepard said ER admissions have increased since April.

However, she reported long-term care occupancy was about 82 percent, a low figure that poses a problem for many North Dakota facilities.

“Ninety percent is the benchmark,” Christenson noted. “Below 90 percent, your reimbursement goes down.”

In other business, the board voted to open a checking account for the hospital ambulance service to comply with county mill levy requirements. Signers on the account are Christenson, Shepard and Emergency Medical Services Manager Cameron Thornberg.

The board also heard plans to update employee non-health benefits and hospital bylaws, which would be included in the hospital’s strategic plan.

The board also voted to increase a cap on emergency purchases for the CEO to $50,000 from $25,000, if the purchase would affect the health and safety of employees or the facility.

The board also learned of new hires for the hospital human resources department and clinic nursing staff.

The board will next meet Aug. 17.

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