Salem Memorial District Hospital’s board of directors held a strategic planning meeting Thursday at the Crossroads Inn and Suites in Salem. The meeting was facilitated by the Rural Hospital Group, an organization that has been helping the hospital weather tough financial problems that have affected the health care industry at large, and has been working with SMDH since February.
Present at the meeting were the SMDH board and CEO, Wayne Reid, many department heads from SMDH and representatives of the Rural Hospital Group. The meeting was intended to generate solutions and ideas to be implemented into the hospital’s strategic plan.
“(When RHG does strategic planning,) we like to have the board on the very front end, to go through and see what your ideas are,” said Trent Skaggs, CEO of the Rural Hospital Group, who presented the majority of the meeting.
Skaggs says the hospital is in far better shape today than when the Rural Hospital Group first started working with SMDH.
“Today, (with bonds), we have about $3.5 million in the bank, so quite a difference it makes from February until now,” said Skaggs.
The scope of the meeting was vast, encompassing many aspects of the hospital’s operations, impact on the community and financials, all to give the board and the RHG the clearest view of the hospital’s situation.
After introductions, the meeting began with an external assessment. This covered state and national health care-related trends such as hospital impact in Missouri, the impact hospitals have on other industries and the effect COVID-19 had on staffing and care delivery, and hospital finances. According to Skaggs, Missouri is one of the top three states for hospital closures, and 35% of hospitals in Missouri are at risk of closure.
“Most of (the closures) are happening in central Missouri there,” said Skaggs, gesturing to a graphic. “When we see in the headlines these struggling hospitals, from Rolla, to hospitals in Kansas City, to Nevada, Missouri, all the backdrop is related around COVID,” said Skaggs. “Hospitals and communities weren’t prepared for it.”
The presentation also included a portion on the recent ransomware attacks that have been plaguing the hospital industry as well as other critical infrastructure around the country. Skaggs, in his presentation, quoted the Wall Street Journal: “Multiple attacks were carried out in recent months against US hospitals, suspending some surgeries, delaying medical care and costing hospitals millions of dollars.” According to Skaggs, the hospital pays a premium of $30,000 per year for $1 million in insurance coverage against such attacks.
The meeting moved on to a market assessment, evaluating the hospital’s market share, service area, demographics, and more, focusing on areas that could increase SMDH’s market share. According to the presentation, in Dent County in 1995, SMDH captured 29% of the market share, down to 25% in 2022. “We’ve kind of held our own the last few years, and had a big bump in 2020,” said Skaggs.
Skaggs noted that Reynold’s County has gaps in healthcare access that might draw some rural patients to SMDH and lead to an increase in market share.
“Looking at the data, I think Reynolds County is a real opportunity,” said Skaggs.
The meeting moved on to an internal assessment, discussing admissions numbers and the specific kinds of care patients needed when visiting SMDH. The discussion made it clear that SMDH not only has a massive impact on local health, but on the local economy as well, as one of the larger employers in Dent County.
“Your payroll is about $12 million,” said Skaggs. “The University of Oklahoma does a study every year on the economic impact of hospitals, and they say that for every dollar spent on payroll, it churns in the environment, in the community, five to seven times. So that means if you’ve got a payroll of $12 million, the economic impact to Salem is north of $60 million as a direct result of your hospital. So from an economic standpoint, a hospital is a massive driver of economics in the community.”
After the presentations, those present were asked to form breakout groups to discuss questions posed by the presenter, designed to help them come up with ideas and solutions to be implemented in the strategic plan.
“We’re going to summarize all this at the end of the day and give it to Wayne in a five or six page document, and we’ll share this with the board as well once it’s completed, and Wayne is going to use that then to meet with the managers, the employees, the providers, and then start to get additional input into the strategic plan,” said Skaggs.
“Some of the things we’re building foundationally now, when we (get into) next year, and in the trailing years, we’ll start picking this up. We’re doing really good things today that will improve our cost report next year,” said Reid.
Skaggs was optimistic about the progress being made by the joint efforts of the RHG and SMDH.
“The reason that you guys have been able to weather this storm, is because you guys have been fairly united with one voice, that the hospital is important to you, bottom line. Right?” said Skaggs. “There’s not a lot of agendas, you guys have always dealt in good faith with us, and when we see you interact as a board, you guys act in good faith… I want to tell you how important that is, because you can’t deal with these problems. Being united as a board, and in one front, and then recognizing the importance of your rural hospital is key.”
