Financial dispute with contractor set to go into arbitration later this year
By Lauren Brown
Harney District Hospital Chief Executive Officer Jim Bishop discussed the hospital’s financial dispute regarding hundreds of thousands of dollars with Skanska, the contractor who built the new hospital, at the Jan. 28 board meeting.
Bishop said that arbitration was scheduled for June. The hospital’s concerns center on items that they were billed for but never received, such as computers; items, such as alcohol (restaurant bills reflecting heavy drinking among workers that tallied thousands of dollars), that the hospital could not pay for because it violates hospital policy; unapproved change orders; and double billing for extra staff. Bishop wrote in his report that ultimately Skanska may owe the hospital more than $750,000. He has talked with several individuals regarding the situation. “The absolute consensus was that we were getting taken,” he said.
The bulk of Skanska’s extra costs came from unapproved change orders that were created by Skanska in December for work done in June and July. Bishop said Skanska employees were signing both sides of the change order, so the hospital never saw the documentation. “They were lying to us. It’s pretty simple,” Bishop said.
Board member Ann Vloedman asked whether Bishop had received any inquiries from businesses looking into hiring Skanska for construction work.
Bishop said that he had received two calls, and after he told them about Skanska’s dealings with the hospital, Skanska lost both potential jobs.
Bishop noted that there is risk involved with any litigation, but that he was confident the hospital is in the right on this issue. He also said that HDH doesn’t have any choice but to proceed with the arbitration because Skanska is demanding hundreds of thousands of dollars in payment.
In the next few months, Bishop said that witnesses will be deposed and information gathered to assemble evidence.
In other business:
• Bishop said that financially, the hospital had a very low revenue month in November, but December was better. He noted that the out patient numbers were picking up again, but because of the poor economy, patients who can postpone elective procedures are doing just that. This is happening on a national level as well. In his report to the board, he noted that the hospital’s strategy to combat the poor economy is to boost revenue by developing specialty surgeries and by completing agreements to place the Veterans Administration out patient clinic in the Racine Building. Both goals could occur in the next 60 to 90 days;
• the board discussed an information request from Buck Taylor. Tim Smith said he had received a request from Taylor for information about employee salaries as well as the salary for former HDH surgeon Stephen Olson.
Bishop presented the board with the salary information.
Board Chairperson Carolyn Bauer said the she felt the board needed a standard procedure for dealing with such information requests, especially when sensitive information is sought.
Board members discussed what information is considered public and what is not. They were unsure about releasing salary information tied to specific individuals. Sam Caizza said he felt the board needed to get a legal opinion on the matter.
Bishop said he would contact their lawyer and get back to the board with the response;
• George Wilber from Oster Professional Group went over the HDH audit with the board members;
• Ron Wulff, Chief Clinical Officer, offered the board an overview of the sleep lab. The lab averages 10 people per month and is scheduled for two weeks out at this point. One full-time employee runs the lab, and she is working on becoming a registered technician, which takes 18 months of on-the-job training. He noted that the lab has netted about $41,000 within the last year and is $10,000 to the good for this fiscal budget year;
• Barb Chambers, Chief Nursing Officer, said that the nurses are being trained in surgical services. However, she noted that each department has cut back from working 40 hours per week to working 36. If there are no patients to treat, workers are sent home.
She noted that they are looking at buying some scope equipment for joint replacement and carpal tunnel surgeries.
Chambers also said that she is looking into implementing the Healthy Start program, which assists first time mothers;
• Denise Rose, Development and Recruiting Coordinator, said that the recently held focus group did not have the expected turnout.
She noted that they have interviewed candidates for the new marketing position and expect to hire someone soon;
• the board decided to re-examine their policies at a board retreat held in April. Also, Bauer noted that three board positions will be up in June, so those three members need to re-file for their positions.
The next hospital board meeting will be at 6 p.m. Feb. 25 in the HDH conference room.