Eureka Springs council OKs new financial system for hospital

The Eureka Springs Hospital Commission will get to proceed with purchasing a new financial and operating system that will help them better meet required standards.

At its regular meeting Monday, May 8, at The Auditorium, the Eureka Springs City Council approved a resolution that will allow the hospital commission to waive the standard bidding process and make a deal with a Kansas City-based company.

“Since I got on the hospital commission, we’ve had problems with our financial systems and our operating systems,” Kent Turner, chair of the commission, told council members. “I was deadset against making any changes until we got to a situation where we had full-blown balance sheets, income statements, cash flows. We are now at that position and have been in that position for almost two years.”

Turner said this is the second year that the hospital was unable to provide the necessary information that Medicare requests.

“Medicare has given us waivers,” Turner said. “We have a waiver and we don’t have to do that. … We do not want to have to do that again. So, we went out searching for a new system.”

Turner said the commission discovered a financial and operating system, Cerner Corp., that was recently bought by Oracle.

“From a standpoint of software companies, it’s local being out of Kansas City,” Turner said. “Their cloud is all based in Kansas City and it’s a full cloud-based system.”

Cerner’s proposal was a one-time fee of $129,490 and a monthly fee of $50,000.

“Our current cost on a good month, and I’m telling you a good month because has a sliding scale, is $58,000,” Turner said. “So, the ongoing costs will save $8,000 a month.”

Turner told council members that he’s a “stickler” on the bidding process, having been part of Missouri’s state auditor’s office in the past. However, the commission was unable to get bids from other companies.

“We had two companies that we talked to other than Cerner, but once they found out we were looking at Cerner, they refused to give us a price,” he said. “All of the other systems are for much larger hospitals than than we’re dealing with here. I mean, we’re 15 beds here.

“Cerner has found a niche, and I’m sure that’s why Oracle bought them two years ago, and has found a niche in small rural hospitals, particularly critical-access hospitals, which fits us to a tee.”

Turner said the new company would handle all the hospital financial applications, in-house hospital operations and all federal and state reporting requirements.

“Even if we advertised for six months we don’t think we’d get any bids other than this,” he said. “And time is somewhat critical for us.”

Council member Terry McClung asked Turner about the financial stability of the hospital and its ability to afford the new system.

“We are not tearing them up, but we’re in the black and we operate in the black almost every month,” Turner said. “February is a bad month for us and usually don’t operate in the black in February, but we make up for it.

“Our hospital is getting greater and greater usage. The better we perform, the better usage we get. We had 715 people through our emergency room in the first quarter of this year. That has allowed us to operate very well within the framework of what we’re doing.”

The hospital also recently sold a separate license for $3.6 million, Turner said.

“We had a license, a separate license from a hospital license that had to do with home health care and we had never used it,” he said. “We had leased it out to a company for about $125,000 a year. That company was bought out and they came to us and said, ‘We want to buy your license.’ And they just bought that license for $3.6 million from us.”

Turner also reminded council members that he hopes to be able deliver good news soon about ongoing plans for major renovations to the hospital facility.

“Hopefully within the next month or so, I’m going to come back and tell you of our plans to effectively build a new hospital,” he said. “Even though we’re building it around the old one, it’ll be effectively a new hospital, which we’re not intending to fund any from the city or from the county.

“We’re looking for federal and state monies in which to fund that. And so far we have gotten very optimistic reports back. That’s not a cheap operation, but we’re dealing with a 1929 core of our building. If we don’t do something, 10 years from now that hospital will not be operating because we won’t be able to operate it on a day-to-day basis.”