St. Vincent Health (SVH) is still working through cash shortfalls and debts after reporting an expected net loss for 2022 which could possibly extend into 2023.
Investments in the genetics testing and behavioral health programs introduced by former CEO Brett Antczak before his departure in August are partly to blame for the shortfalls as they required a large amount of cash outlay and resources, according to hospital officials.
SVH is currently reviewing contracts with vendors and recently canceled its agreement with The Genetics Institute, which Antczak signed without proper approval from the board of directors. Any contracts listing more than $25,000 in expenditures needed board approval, said Chief Branding Officer Karen Onderdonk.
The hospital board already felt like the project wasn’t a good fit and also hadn’t seen this specific contract, so it made sense to terminate it. Beyond the authority and appropriateness question that arose with the genetics contract, SVH is generally considering board criteria and state regulatory compliance in its review of agreements, said Onderdonk.
The Infor accounting system is still on hold and under review, for example, as SVH catches up on budget and financial reporting over the next month and considers all expenditures for 2023.
Onderdonk clarified that the Infor accounting system is one part of a bigger materials management, contract management and inventory control software – the Lawson inventory system purchased in November 2021 for $499,120.
SVH used an addendum in December that year to purchase the accounting software for $208,000, making the total initial cost of the system $707,120. The software also has an annual cost of $144,000 on top of the initial investment costs, said Onderdonk.
After making these investments last year, the hospitals found success and efficiency using the Lawson software even though the accounting piece is temporarily on hold.
The hospital doesn’t want Infor to be on hold forever, but it made sense to use QuickBooks in the meantime to compile financial records it can work with during the shortfall period. “I think we really need to make Infor work for us,” said Onderdonk.
Beyond creating a need for the hospital to reevaluate contracts and previous investments, current financial burdens have also required some adjustment in payroll approaches.
To pay employees on Oct. 28 and Nov. 11, the hospital needed to upload funds from large state deposits into its payroll account, which proved challenging due to time constraints.
It usually takes around 48 hours to upload funds to the payroll account, and SVH couldn’t guarantee this crucial revenue would be in the system on time. “We needed the money to make payroll,” said Onderdonk.
The first deposit was a $478,260 Hospital Transformation Program (HTP) advance from the state of Colorado the hospital received at the beginning of November. The HTP incentivizes participating hospitals for improving care provided to Health First Colorado (Colorado Medicaid) members.
The second deposit, received last week, was $345,508 from the Colorado State Provider Fee, which helps reimburse hospitals who provide care to uninsured patients.
Instead of paying employees through direct deposit as usual and risking running out of time to receive the available funds, the hospital switched to paper checks for these dates to be safe. Although the process came down to the wire during the past month, Onderdonk reiterated that SVH has not missed a payroll.
Over the summer, the hospital faced similar financial stress when staff members discovered that their American Family Life Assurance Company (AFLAC) payments were not made for a few months.
Approximately 10 staff members at SVH opt for AFLAC benefits funded by payroll deductions. SVH took the pay deductions but did not initially forward them to the insurance company, said Onderdonk.
Accounting staff caught up the payments once they learned about the issue, which Onderdonk said was an oversight possibly due to heavier workloads on a short-staffed group.
As a challenging financial year comes to a close, SVH is also paying back debts to CarePoint Health after falling behind on monthly payments. CarePoint has provided SVH with emergency physicians for around three years.
The hospital currently owes October and November invoices and set up a payment plan to resolve past due amounts and stay on top of incoming monthly invoices. Currently, SVH owes $306,000 to CarePoint which includes a November invoice of $141,675, said Onderdonk.
SVH still plans to continue working with CarePoint and appreciates having doctors here in the community who specialize in emergency medicine, said Onderdonk.
Going forward in its financial recovery period, SVH is addressing basic health care needs and patient experiences, which include technology adjustments.
The hospital’s four-person IT department endured some turnover in August and September, with one original contractor remaining. In response, SVH is onboarding a new managed service provider, ProVelocity to run a 24/7 help desk and manage the hospital’s IT applications. The goal is for SVH to have at least one person on the ground at all times, said Onderdonk.
SVH also introduced a new phone tree system back in mid-October after patients reached out saying it was difficult to reach certain people or departments when they called the hospital or Family Health Center.
With the new system, callers experience three direct options to connect with the Family Health Center, hospital or speciality clinics. If the person they are looking for is not available, callers can quickly leave a message. Onderdonk said feedback on the new phone tree has generally been good so far.
Community members will have a chance to provide more feedback on the hospital’s current operations during a public budget hearing on Nov. 30 at noon, which will include the projected loss for 2023 and last year’s financials up to at least September, providing the transfer of data to QuickBooks goes as expected.