New Health CEO Looks Ahead

DAYTON - Columbia County Health System CEO Dale Polla said he is optimistic, if a bit wary, about the or- ganization's financial future.

On the plus side, one of his most important goals - a positive operating margin - was reached in two out of the last three months of 2012.

As for his wariness, he said, "I'm nervous about what the legislature's going to do." He referred to the potential for cuts in Medicaid and other funding CCHS receives from the state, which faces a $1 billion budget shortfall this year.

During last week's CCHS board meeting, chief finan- cial officer John Hennessy reported that, in October and November, operating rev- enues - which don't include tax levies from property owners in the district - ex- ceeded total expenses. This is new financial territory for the organization, which has run operational deficits for years, relying on tax receipts to make up the difference. (Hennessy pointed out that those numbers are prelimi- nary, and subject to audit.)

During the board meeting, Chairman Ted Paterson gave special thanks to staff mem- bers throughout the organiza- tion whom he said had made excellent effort in the past year to contain expenses and improve billing processes.

CCHS operates Dayton General Hospital, Booker Rest Home, the Columbia Family Clinic in Dayton and the Waitsburg Clinic. It receives part of its funding from property tax levies within the district's boundar­ies, which include all of Co­lumbia County, plus an area around Waitsburg in Walla Walla County.

In a wide-ranging inter­view last week, Polla talked about the improvement the district has seen and some of the challenges it still faces.

"We have an outstanding staff, and people are re­ally working well together as a team," said Polla, who started his job in October. "Our financial health relies on them."

CCHS is currently re­cruiting a new primary- care physician to replace Dr. Heidi Shields, who has announced her departure, though she still provides some emergency room and on-call coverage.

"It's a difficult process, but I'm confident we'll have someone on board by this spring," Polla said. He said that filling that position is essential to maintaining and growing the organization's business. Polla also said that CCHS hopes to add a second new provider before the end of the year.

Polla said he is heading up a marketing commit­tee, which aims to improve market penetration for both of the group's rural health clinics. "We want to encour­age local people to use us for their health needs," he said.

The committee will pre­pare a marketing plan, which will include new branding and advertising. Polla will also be a personal "ambas­sador" for the organization, meeting with local groups in the community to discuss the services CCHS provides.

"I've been here long enough now that I have the knowledge I need to be a strong advocate for the organization and provide answers for questions people have," he said.

Polla said that, besides providing adequate Medic­aid funding, the state legis­lature needs to continue to support its "Critical Access Hospitals". These are spe­cially designated hospitals, mostly rural, that residents in their area rely on for health care.

"Certain legislators al­ways look at that as a po­tential for cuts," Polla said. He said he had spoken with local legislators, and they as­sured him they will oppose any "Critical Access" cuts.

Polla said he is also concerned about cuts to Medicare funding for senior citizens by the federal gov­ernment. "That's kind of an unknown," he said.

Hennessy said that ap­proximately 60 percent of CCHS's operating revenue comes from payments for Medicare patients. Another nine to ten percent comes from Medicaid payments for low-income patients. The re­maining income comes from "private pay" patients, most of whom have private health insurance.

According to Hennessy, CCHS has an annual operat­ing budget of approximately $12.5 million. It receives $850,000 annually in local property tax revenue.

Polla said that once the goal a positive operating margin is met each month, the tax levy funding can be designated for capital improvement projects and improving reserves.