With a conservative 40 percent of its $65 million cash and investment fund in a portfolio designed to earn money in a market which has lost approximately 48 percent of its value throughout the present economic crisis, Phelps County Regional Medical Center’s October loss of $1.57 million in its investment fund — or seven percent of its year-to-date value — paled in comparison to the despair realized by other investors, explained the Finance Committee on Wednesday to the hospital’s Board of Trustees.


With a conservative 40 percent of its $65 million cash and investment fund in a portfolio designed to earn money in a market which has lost approximately 48 percent of its value throughout the present economic crisis, Phelps County Regional Medical Center’s October loss of $1.57 million in its investment fund — or seven percent of its year-to-date value — paled in comparison to the despair realized by other investors, explained the Finance Committee on Wednesday to the hospital’s Board of Trustees.
Despite the loss of anticipated investment capital and a loss of $177,000 from October operations, the total net loss for the hospital in October amounted to $1.75 million, which still fell under budget by $2.09 million.
Additionally, the year-to-date net loss of $2.586 million was under budget by $5.96 million and under the prior year by $7.67 million.
The less-than-expected loss of value in the hospital’s investment-fund was primarily accomplished by its investment-portfolio distributions — 50 percent in equity investments and 50 percent in fixed-income portions, explained Jerry Paule, chief financial and operating officer.
Total cash and investments for the hospital through October stood at $65 million, which reflected a $10.93 million increase since September, 2007.
Moreover, Paule explained, PCRMC made its annual principal and interest payment on bonds, which reduced the hospital’s debt by $1.58 million, and the hospital also entered into a 75-month, capital-lease transaction, which increased cash and debt by $15 million.
Other business conducted at the PCRMC Board of Trustees Meeting included a discussion of Medicare assigning Health Data Insights, Inc. as the new Recovery Audit Contractor for Missouri.
PCRMC administrators anticipate the new RAC will arrive in Missouri sometime in beginning of 2010.
Medicare has initiated Recovery Audit Contractors to audit the cost and necessity of medical services in an effort to find overpayments made to medical providers, and RACs are paid for their auditing services by earning 20 percent of the total amount they collect in perceived overpayments.
PCRMC already initiated a “RAC Committee,” which is responsible for evaluating the hospital’s infrastructure, identifying risk areas and ascertaining improvement opportunities, as they pertain to future audits initiated by the RAC.
The Board of Trustees also approved engaging Deloitte & Touche LLP to audit the 2008 financial statements for PCRMC. This would be the fourth year Deloitte & Touche has audited the hospital, and the company increased its fees by 5.5 percent.
The board also reviewed minutes from the PCRMC Personnel Committee, which met on Nov. 18.
New business items addressed by the Personnel Committee included statistics on employee attrition rates, worker compensation claims and the Employee Attitude Survey.
According to the minutes, Administrative Director of Human Resources Frank Lazzaro informed the committee that PCRMC’s year-to-date turnover was 12.3 percent, slightly lower than the 2007 third-quarter turnover rate of 13.3 percent.
Chief Executive Officer John Denbo said, “The report is encouraging.”
Lazarro also reported the cost of worker compensation claims for hospital employees stood at $143,000, which reflected the lowest claim costs in the past 8 years.
According to statistics revealed by the 2008 Employee Attitude Survey, PCRMC had a 68 percent response rate and scored 64 percent in positive morale.
Information from the survey will be forwarded to the hospital staff by department directors, and action plans will be developed for areas that need improvement.
In other PCRMC employee business, the United Way campaign has begun, and the hospital’s goal is $20,000. PCRMC will match all employee contributions.