Relations between the City Commission of Arkansas City and the South Central Kansas Medical Center Board of Trustees seemed to become more strained, following another meeting between members of the two boards on April 27.
The meeting, which originally was called as a noon study session to discuss the 2017 city audit, also featured discussion of hospital business.
“At our last meeting, on a Tuesday night, we discussed appointing someone else (to the board). So we’ve been talking about what to do about appointing somebody. We’ve got several things (to consider) here,” Mayor Dan Jurkovich said, to start the discussion.
Those items included a new steering committee, comprising both commissioners and trustees, and a possible renewal of the half-cent sales tax that will expire next April. Both items were approved unanimously April 26 by the trustees as recommendations to the City Commission.
But the first idea actually presented April 27 was a modified charter ordinance, drafted by City Attorney Tamara Niles, which has been discussed previously.
“The hospital has drafted a proposal for a steering committee. … The city manager mentioned we should do something similar to this, instead of just going and changing an ordinance,” Jurkovich said.
City Manager Nick Hernandez’s stated idea did not necessarily include trustees, however, other than outgoing trustee Dr. Nick Rogers.
“(The proposed changes) got in the paper and it caused a little stir, which is fine, and I love the press being here. Whether it’s in the paper or not, it’s part of the discussion. The press will stop coming when our board is boring,” Jurkovich said.
The trustees present at the study session were outgoing member Carol Hearne, newly elected chair Hap McLeod and treasurer JoLynn Foster.
New charter ordinance?
By modifying the charter ordinance, the City Commission could change the composition of the SCKMC Board of Trustees.
Kansas statutes define the makeup of hospital boards in the state and says they should consist of five members, each serving five-year terms, with one term expiring each year. But the City of Arkansas City chartered out of these requirements back in 1981.
“Do you know why we did a charter ordinance?” Jurkovich asked.
“The only reason — and I don’t know this — (but) the only thing I can think of is because the hospital was part of the city,” Hearne said.
“But Winfield has a city-owned hospital, too, and they don’t have a charter ordinance,” said Commissioner Jay Warren.
The William Newton Hospital (WNH) board follows the state guidelines, with five members serving five-year terms, Hernandez reported.
“Winfield doesn’t have a new hospital that they’re paying for,” Foster said. “They have a foundation that funnels thousands and thousands of dollars into that (facility).”
“Winfield never has the press there,” despite WNH board meetings being public, McLeod added. “You never read about their board of trustees.”
“I looked around — I just Google-searched different hospitals — and most hospitals (follow state statute),” Jurkovich added.
“I’ve contacted 71 different hospitals in different states that are running approximately our population, trying to figure in their billing cycles — so anything $35 million or down — and the vast majority is five (board members),” said Commissioner Kanyon Gingher.
“A few are seven (members), a couple are three, but the vast majority is five members.”
She said all of those boards are appointed, not elected, and none of them include physicians — a major point of discussion later in the meeting.
Number of trustees
The trustees raised an issue with looking at what other communities are doing with their hospitals to guide SCKMC.
“(Visitors) say (Arkansas City) is totally different than the rest of the world,” Hearne said. “That’s our uniqueness. We don’t have to be like everybody else. We need to do what works for us.”
“But some people are saying that won’t work,” Jurkovich replied.
“Let me just point out something to you: I was with the governor … a week ago (when) he said virtually every rural hospital in Kansas and the country is in trouble,” McLeod said.
“Sometimes it’s not the right thing to do what everybody else is doing, and its particularly true in this case because not everyone’s dealing with a $31 million debt.”
The SCKMC board has nine voting members and three additional ex officio members — a city commissioner (Gingher), the city manager (Hernandez) and the chief executive officer of the medical center (Virgil Watson).
The board also currently includes an active physician (Dr. Perry Lin), a retired physician (Dr. Robert Yoachim), another retired physician who is working to become active again (Dr. Jerry Old) and an actively practicing dentist (Rogers, although his term technically has expired).
It is not supposed to include more than two active physicians, according to the current charter ordinance.
During the meeting, Hernandez recommended downsizing the board to follow the state statute and not having any physicians on it.
“I like having more people (than five members) there, because we have a lot more talent and ability (at the table),” McLeod said. “I don’t know if you need nine.”
“But you can have subcommittees” to bring that additional expertise to the meeting, Hernandez pointed out.
Communication and transparency
The trustees continued to highlight communication between the two boards as an issue, even as several city officials demanded transparency.
“One of the problems with communication is a lot of stuff we need to talk about is stuff you have to do in executive session,” McLeod said.
“It’s got to be short-term,” he said of his proposed joint steering committee, which would not have a majority of either board or have to conduct meetings that are open to the public. McLeod indicated this temporary status would be to avoid any chain-of-command uncertainty for Watson.
“I think Virgil is a little confused about who he works for,” McLeod said. “I don’t think he is at all,” Gingher countered.
“He reports to both (the trustees and the commissioners) every month,” McLeod replied.
“Are you confused, Virgil? That’s been stated multiple times,” Gingher asked.
“No, I am not,” Watson answered. “I work for the board of trustees at the hospital.”
“If we create a steering committee — which has not only been proposed, but the trustees have approved this to send to us — the only thing that I can think to do that is prudent is to put it on the agenda (for May 1) as an action item,” said Jurkovich, trying to get the meeting back on topic.
“What’s the benefit of (the committee)?” Gingher asked the trustees. “One of the things that we talked about is they need more board meetings (open to the public) per month, not just one.”
“We have two,” Foster said, referring to the full board’s regular monthly meeting and a prior meeting of its four-member executive committee.
“Not public, you don’t. You have an executive (committee), which is private,” Gingher said.
“Hap has repeatedly said we cannot discuss things in public — which alarms the public. You’re talking about not being able to discuss salaries — that’s fine. We’re talking about general issues and situations. And obviously, it’s been repeated that the media has a problem or the media doesn’t understand, or whatever was said. They do understand about salaries and about contracts, and things like that. That’s not an issue or a problem. But this (new) committee — however you want to form it — what is it meant to accomplish that (the board) can’t accomplish now?”
McLeod alluded to physician contracts as one of the issues the board has trouble talking about in public, due to personnel privacy concerns.
“The physicians are the lifeblood of the hospital,” he said. “The critical issue now in my mind is physicians. Physicians’ contracts, recruitment, the whole gamut — and it’s hard to talk about that in a meeting that you have to go back and forth (into executive session).”
“What do I do?” Hernandez said when asked how the city handles sensitive issues. “We talk about them (publicly). It’s always hard to talk about them, period.” As for knowing when to enter executive session, he said, “that’s what your attorney’s for.”
McLeod also said physicians are popular with their patients, and with that popularity comes a sort of power.
“One of the reasons I want you (commissioners) involved is the physicians have a kind of political standing in this town. We have to treat that very gingerly,” he said. “The doctor issues are huge, and that’s hard to deal with. … They impact a lot of other things.”
“Do we know the issues and just need to take care of them?” Jurkovich asked. “I think we know them,” Gingher said.
“I think the board is concerned that if we make a plan on our own and start going towards it, and it doesn’t suit what you wanted to do, so you want to make changes — so why not just get everybody started together?” Hearne said.
At this point, Hernandez made his suggestion about not having physicians on the board, but Watson said their clinical guidance can be very valuable. He cited an instance in which he convinced Yoachim of the need to move the obstetrics unit to make room for the Senior Health Unit.
“You need that clinical input, in order to make some of those tough decisions, and you probably can get it somewhere else, but them as a board member gives (it directly),” Watson said. “If you can’t vote, then that constrains how much you can influence the decision making.”
He said Yoachim “backed us and gave us the credibility that we needed with the rest of the medical staff. I just would caution us not to get rid of that advisory, voting voice. They have to be an active, voting member. In this environment, it’s a little more difficult than my (previous) hospital in Caldwell.”
“If you think you’ve got issues now with the darn doctors,” Foster said, “with no communication, then you tell them they can’t even be on the board… Dealing with a doctor is different than dealing with a guy that digs a ditch. They just are (different).”
“I think it’s important to have the chief of staff present (at meetings), but I don’t think it’s necessary to have them on the board (as a voting member),” Gingher said.
Jurkovich compared Lin’s voting privileges to if Hernandez or Finance Director Kathy Cornwell were to vote as part of the City Commission.
As the meeting stretched on, the trustees indicated they felt a lack of confidence in their work from the commissioners.
“I think what has bothered me the most in this whole thing is I think the City Commission doesn’t think there is anyone on our Board of Trustees that’s smart enough to participate,” Foster said. “And we have very professional people on that board and they’ve all been successful. We’ve all had long careers outside of the hospital, and I think it’s that feeling that I get from board meetings.”
“Are you fixing something that’s not broken?” McLeod asked the commissioners. “Because we have the best hospital for our size of town, for many, many miles around, and my opinion (is) I think we’re on the cusp of being very successful financially as well, or certainly much more than we’ve been, and that’s the result of this group of people. You can’t deny that.”
Jurkovich admitted that perhaps the commission has been micromanaging a little ever since it had to loan almost $2 million to SCKMC.
“I think that the area that we as a City Commission could improve upon is: How can this board be more efficient?” he said.
“I think we’ve overstepped some of our authority by maybe stirring the chili a little too much. We should just have a board that comes and tells us what’s going on, and we should feel comfortable with that board, and that’s it.”
“There’s not one person in this room that doesn’t want that hospital to succeed,” Foster said. “Now, I have been in this town since 1947. I’m going to die in this town. It’s important to me that (the hospital) exists and does well. Not everybody in this room’s gonna be here that long. It’s that fact, that feeling that you don’t think we’re smart enough to do what we’ve been appointed to do, that really bothers me.”
McLeod praised the work done by Watson and his administrative team so far to address the financial concerns.
“No small hospital in this area, in this country, has solved this problem,” he said. “They keep trying new stuff to see if it’s going to work, because that’s the only way you’re going to get out of our financial (problems).”
“I’ve been here three years, three months and 37 days,” Watson said. “It takes a little time to get your finger on the pulse of the operation, get the right staff in place. We’ve made a lot of adjustments in our staffing. We’ve implemented a lot of changes.”
“Sure, there’s been bumps and stumbles,” McLeod admitted. “(But) the (bond) debt is the gorilla in the room and it’s not necessarily the fault of management. You guys decided to make a huge investment in the future, and I’ve got to tell you, I think you made the right one.”
Sales tax push
Eventually, the discussion turned back to the request for renewal of the half-cent sales tax and the steering committee’s role in promoting it.
Gingher said it took months for her to come to terms with the idea that another sales tax might have to be passed.
“And that tells me that people just didn’t understand the financial necessity, with the exception of a couple of board members,” Gingher said.
She reviewed the list of topics McLeod suggesting a joint steering committee would tackle:
“So it’s the performance of South Central Kansas Medical Center, communication, to refinance the bonds which (Hernandez) talked about, and why a half-cent sales tax can do that. We don’t need a steering committee for that. What we have to do is work to get the public that informed.”
“I think that’s what we’re saying: This (steering committee) would be the one to do that,” Hearne said.
“We should already be able to do that,” Gingher said. “We should be able to explain that to the public. … They’ve got to have this sales tax. The half-cent (tax) needs to continue. This is how you save $1.6 million. This is how you end five years’ worth of payments.”
“What I’m going to say is the board of the hospital should do all of this — the City Commission shouldn’t,” Jurkovich said.
“But if they do, then the City Commission shouldn’t say, ‘Why did you do it that way?’” Hearne asked.
“We’ve never done that, until we were approached for (bond payment) money one month before it was due (in 2016),” Jurkovich responded.
“Did you guys know, as a board, that you were going to have to come in 2016 and ask for a million dollars?” Gingher asked.
“Yes,” Watson said. “You did — did your board know?” Gingher said.
“We always know there is going to be a need for money. We are always anticipating that things will go the way they should go and that money will be there. Can we tell you that it’s always going to be there? No, we can’t,” Hearne replied.
“But for us to say to you that we know six months ahead of time that we’re going to need a million dollars? No, we do not know that, because we anticipate that the services we provide will be paid for and we will generate income, and that we will not need that money.”
“Holly (Harper), your (chief financial officer), cannot see the money that is coming until it hits, in all but one category, (in which) she gets a week’s or 10 days’ notice,” Gingher said.
Nothing decided … yet
The meeting ended shortly before 2 p.m. when Jurkovich and Commissioner Karen Welch had to leave for other appointments — with no clear indication of what direction the commission might eventually move.
“We will not get through this, obviously,” Jurkovich told the trustees. “So this will come on the (May 1) agenda. We appreciate your input. We’ll look at it, we’ll discuss it more, we’ll either vote it down, yea or nay, on Tuesday.”
“It doesn’t hurt to try (the steering committee idea),” Watson said. “My position is try it, let’s see if it helps things, and go from there.”
Warren suggested instead that both full boards could meet on the second Thursday of each month, then the board of trustees could have its normal monthly meeting on the fourth Thursday to act on issues previously discussed. He said 30 days is too long to wait between meetings.
“And we’ll discuss the composition (of the board May 1), and maybe someone makes a motion … and then we’ll discuss it, and we’ll vote on it,” Jurkovich said. “It could be similar (to what has been discussed) or it could be exact(ly the same).”
“They’re coming with the sales tax on Tuesday,” Hernandez added. “We’re working on that language right now. We have a pretty good language already set up, so we’ll have a resolution for approval on Tuesday.”
“I think it comes down to us reviewing this thing that Dan has put together, and the city attorney, and making our decision Tuesday,” Gingher said.