Consultant: Med Center not in financial danger
Despite a drumbeat of warnings from the board of directors of the Block Island Medical Center, not everybody thinks the center is in bad financial shape.
The Block Island Times has obtained a copy of a confidential report from M. Montanaro Consulting, dated Sept. 30, 2011. It was prepared for Block Island Health Services, the entity that runs the Medical Center, and for Thundermist, the mainland non-profit heath center currently exploring a partnership with the island center. The report says the center doesn’t function perfectly on many levels, but overall, it isn’t in bad shape; it concludes “BIHS could continue to operate under its current structure and conditions and, in doing so, serve the basic urgent care and primary care needs of the community for years to come.”
The center functions more like a private practice than a community health center, says Montanaro, and has some problems, including a board that’s overly involved in management issues and a contentious relationship between medical staff and the board. She described an executive director — Monty Stover, who was ousted last week — who was not seen as empowered to represent his staff.
Montanaro suggests all these problems may be a result of the center’s small staff and resources, and that solutions to all of them could be found in partnering with a larger organization. She saw no reason why Thundermist would not fit the bill.
M. Montanaro Consulting’s principal is Maria Montanaro, who is also a senior advisor in integrated health management at Blue Cross Blue Shield, according to her LinkedIn profile. She left her job as Thundermist’s CEO in June 2011, according to the Thundermist website.
The financial picture
“A financial analysis indicates that BIHS has a healthy balance sheet, great equity and a strong current ratio, as well as little debt,” reads the report. “BIHS could sustain many years of small operational deficits given this financial position.”
2011 was, indeed, a year the center ran a deficit. The budget submitted to the town as part of this year’s budget process shows it took in $677,437 and spent $692,510. Of its revenue, $86,800 came from the Town of New Shoreham, $151,524 in donations, and $350,043 in patient fees. The Thomas property brought in almost $27,000 in rent. The property has since sold for $725,000, which the center has dedicated to its endowment.
The endowment is now at $1.4 million, said Michael Hickey, chair of the center's investment subcommittee. "It’s an important component of the operating budget, which uses about 5 percent of the total value of the endowment each year," he explains. "Five percent is standard/best practice in endowment management as, longer term, it allows the endowment to grow after adjusting for inflation into perpetuity, while providing income to the operations of the medical center."
The vast bulk of its expenditures went on wages, to the tune of $327,000, plus almost $75,000 in benefits. Another $58,301 went to a line item called “consultants and outside services.”
The budget notes that the center provides services for more than 5,000 patient visits a year.
The Montanaro report picks out several areas where the center could use improvement, and it’s clear from reading it that Stover was already under the microscope last year. But while the report briefly references managerial performance problems, it spends more ink on structural problems at the tiny center. More management expertise is needed, it says, and could be gained from alignment with a larger organization. But in the meantime, the board and its various subcommittees need to recharge and step back, and if the partnership with Thundermist doens’t happen, the board would benefit from training by a consultant.
“There needs to be a clear line of delineation between roles for the board, the staff and the management,” says the report. “The board needs to extricate itself from some of its direct involvement in managerial issues.”
If the partnership goes through, it should be Thundermist that’s responsible for hiring and overseeing staff, says Montanaro — there would be two organizations, but one staff. And the staff needs to step back from board issues, too: “The staff expects to be involved in all matters before the board, and to have a say in all managerial and governance decisions,” the report reads. “This expectation has largely been accommodated by both management and the board and has led to problems between the staff and the board, and it has affected Monty’s leadership.”
In short, the report concludes: “To fully realize its mission as a community health center, it will need to address issues in governance, leadership, quality assurance and fulfillment of mission to the neediest in the community. Such realization would probably be best achieved with a larger, federally qualified health center, preferably RI based.”
The report is full of reasons why it would be good for BIHS to align with Thundermist, but cautions that partnership would mean the mainland center would have to invest significant staff time in BIHS. The only payoff for Thundermist would be that it could count BIHS patient visits as its own, extending its size and reach and possibly also its ability to apply for federal funds.
The medical staff
Montanaro says she spent a good deal of time on studying the center’s medical staffing model. She outlines the quandary all too familiar to BIHS supporters: While the current model of two doctors or nurse practitioners rotating on-call duties is expensive, it is probably the best solution, the report says. But despite the expense, low call volume in the winter means medical staff at the island center aren’t paid as much as mainland providers. That in turn means attracting, and keeping, good medical staff will always be a challenge.
One of the center’s most serious problems lies in a lack of quality assurance for the health care it provides, Montanaro says. There’s no clinical oversight or best practices policy, and while the current doctor, Jan Miller, “appears to be doing an adequate job clinically, there is really no mechanism to assure that. The center is even more exposed by the part time itinerant doctors who have rotated through in the summer… Each provider is left to their sole and independent discretion.”
At the least, she says, the physican’s advisory subcommittee needs to change focus to clinical oversight, although again, alignment with Thundermist would help meet the need.
Montanaro also says the center should explore how to attract more year-round patients, as currently, only about 50 percent of year-round residents seek regular primary care there. She suggests the center make patient satisfaction part of its annual medical staff evaluation.
As a private non-profit, the center does not need to adhere to open meeting law, but the BIHS bylaws says it should. Montanaro says that’s a possible problem; the bylaws are well written, she says, “perhaps with the exception of the open meetings requirement.” The requirement means that meetings generally start in open session and then go into closed session, and Montanaro says “This two-step board meeting has created some apprehension among BIHS staff, members and the public.”
The report was commissioned as part of the center’s efforts to pursue an affiliation with Thundermist and in it, Montanaro says she bases her findings on a week she spent at the center. When she was here, the board had its full complement of 11 members: President Pam Hinthorn, Vice-President Betty Lang, Secretary Kay Lewis, Rescue Squad appointee Cookie Lenoci, Town of New Shoreham appointee Millie McGinnes, and elected members Cindy Baute, Peter Tweedy, George Henault, Judith Cyronak, Judy Tierney and Shannon Morgan. Since then, Lang, who is the copublisher of this newspaper, and Tierney, who is a BI Times staff reporter, have resigned.