N.I.H. bleeding
Northern Inyo Hospital (NIH) is changing the way it does business, according to a Quarterly Update presented by new CEO Victoria Alexander-Lane at the July 14 Bishop City Council meeting.
NIH approved a balanced budget less than a month ago, but cut $3.4 million from the budget by making significant changes, some to personnel policy, in order to freeze the cost of healthcare services.
The reason: as Alexander-Lane acknowledged at Monday’s City Council meeting, increased prices at NIH are driving away customers.
“From 2003-2013, we would create a budget, decide what we needed to spend, and then increase our prices,” she said. Price increases eight to 10 percent each year, she added. “This made healthcare almost unaffordable for the community.”
In the past decade, Alexander-Lane said revenue went from $50 million to $100 million. “We’re doing the same thing we were doing 10 years ago, but charging twice as much,” she said.
Yet customers are beginning to leave, seeking better prices for high-dollar services elsewhere.
Alexander-Lane said NIH was in “a very precarious position,” and intends to freeze current prices while strategizing ways to bring those prices down.
The NIH Board approved several key changes to personnel policy to allow the Hospital to freeze prices. One of these changes is the Hospital’s adoption of a pay scale and pay practice policy intended to keep NIH employees in line with similar “critical access” hospitals in California.
“Only one percent of people at the hospital will get an increase as a result of the new scale,” said Alexander-Lane. 56 percent remain within the adopted scale, and 46 percent are above the scale, and the Hospital will freeze their wages until the pay scale catches up to them.
“We also changed the increment of raises from five to two percent,” Alexander-Lane reported. Raises will no longer be a given, as they were under the previous pay step system, but dependent upon favorable evaluations.
The Board also removed a 3.5 percent pay increase for bilingual hospital employees. Alexander-Lane said that this pay increase was anomalous; “nobody gets extra for speaking Spanish [at other hospitals],” she said.
Another change to policy has met with trepidation from some hospital staff is “Zero Pay.” Under Zero Pay policy, if an employee is sent home for lack of patients, they will receive no wage for the hours of work they missed, but will accrue vacation time and time required to receive benefits.
Zero Pay only applies to employees with 56 or more hours in a pay period.
According to an Inyo Register report, one staff member expressed concern that this would mean an unpredictable number of hours from pay period to pay period, and that hours could be less than required for employees to make a living.
Alexander-Lane argued that this was just one more incentive to bring back customers.
More customers also means lower prices, she said. “Everything is volume dependent. If an MRI sits without use, the incremental cost of the MRI goes up. If we can keep business home, that should drive prices further down after a while.”
In spite of substantial changes at NIH, “Our hospital is actually doing well,” Alexander-Lane maintained at Monday’s meeting. “It’s a healthy hospital, as compared to a great percentage of hospitals in the U.S. operating in the red.”
She impressed upon the Council that the hospital remains extremely safe, with an infection rate of .35 percent, including C-sections. “Doctors are very good; we haven’t found any deficits there, whatsoever,” she said.
“We’re going to be doing a lot more as we get rolling,” she added.
