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WINNSBORO – Although for the most part it was “business as usual” at the regular Fairfield Memorial Hospital Board of Trustees meeting March 27, the meeting ended with a vote that signals the final days of the hospital.

After an hour-long executive session, the Board voted to “authorize the CEO to proceed with executing the agreement as presented with one revision.” But there was no clarification as to what the agreement was for or who it was with.

The Voice has learned from other sources that the agreement is with Nelson Grubb Wilson Keibler, a Columbia commercial real estate company, to list the hospital grounds and facility for sale for $4.5 million and includes two general practitioner offices. One of those offices houses Fairfield Medical Associates and the other is vacant.

At least one Board member complained that the Board had not been given the contract to read over prior to executive session.

The motion to approve the agreement was passed with only Trustee Ron Smith objecting.

“I won’t sign anything I don’t have the chance to read or study,” Smith said.

The County is having the property appraised, which, County officials said, should take perhaps another week to complete.

Hospital owes $3.3M

During the Finance and Audit Committee meeting that preceded the full Board meeting, Mitchell pointed out that accounts payable continued to grow in February by more than $400,000, although some of that was due to bills that occur quarterly. By the end of February, the hospital owed more than $3.3 million to vendors and contractors.

Financial Reports

CFO Timothy Mitchell’s February financial report to the Board showed that while operating expenses were down by $716,027 from adjusted prior year operating expenses, gross patient service revenues decreased by $1,466,990 – twice as much – from prior year.

The hospital experienced a net operating loss of $130,837 for February, but this reflected a premium refund the hospital received for workers compensation insurance, Mitchell said.  Excluding this, the adjusted operating loss for the month of February was $174,613. EBIDTA (earnings before interest, depreciation, taxes and amortization) for the five months ending Feb. 28 was a negative $765,793.

The loss for February, Mitchell said, does not include any bad debt recoveries from the South Carolina Department of Revenue (DOR), because the DOR has been slow in processing tax returns and getting these payments out. Instead the hospital received the GEAR payment in early March.

GEAR (Governmental Enterprise Accounts Receivable Collections) and tax offsets are used by the DOR to collect money owed to public entities, such as FMH, through the garnishment of state individual income tax refunds and additional collection tools, such as payment plans, wage garnishments and bank levies.

“Had we gotten the GEAR payment in February, we would have gotten very close to a cash breakeven point,” Mitchell noted. “The February and March GEAR payments are about a $311,000 offset against bad debt.  We are anticipating making our budget with a $500,000 profit in March.  That should bring us very close to the budgeted EBIDA or cash loss for the six months ending [in March].”

In other words, at the halfway mark, the hospital does not anticipate incurring a greater loss than the one accounted for in the hospital’s current budget.

Mitchell also reported to the Board that the hospital management exceeded the cost saving goal they were charged with at the February Board meeting – to reduce overhead costs by 5% for an estimated target of about $23,000.  Instead, the hospital managed to identify $39,728 in monthly overhead cost savings, Mitchell said.

And, if one excludes things like taxes and fixed costs that the hospital has no control over, the identified savings are closer to 15%, Mitchell added, although he did not specify exactly what had been done to achieve these savings or why the measures could not have been implemented sooner.

 “Business as Usual?”

Even though – given the dire state of the hospital’s finances and the lack of patients – sale of the property can be seen as inevitable, the FMH Board and management have been carrying on with business as usual.

The Board still heard department reports on patient safety initiatives, approved a purchase for an emergency room ventilator and talked about the hospital’s Facebook page.

Certain costs, such as the hospital’s contract with HMS for housekeeping and maintenance services, remain and are on-going, meaning the hospital cannot reduce these costs even though there are fewer patients served and fewer services provided.

Doscher reported that the strategic plan, which initially envisioned what the future might look like in three to five years, has been changed to reflect the fact that the hospital will be closing in 9 to 10 months. However, sources tell The Voice that the hospital is in talks with bankruptcy attorneys and that the doors could close as early as this spring.

“Now the strategy is retaining the staff we have,” she said.  “We are not looking to grow right now, we have changed to a transition strategy and the things we are looking to do to transition from an acute care hospital.”

And, finally, the hospital is closing the kitchen completely, concluding that it is too costly to keep it open. Despite the fact that it has been many months since there were inpatients, the hospital has been keeping the kitchen open to provide employees with lunch three days a week and meals to management and Board members during Board meetings.