By VICKI URBANIK

The county-owned Porter health system has created a top executive position to focus on compliance and audit issues.

The Porter hospital board on Wednesday welcomed Shelley Koltnow as a new vice-president in the newly created, $169,000 post. An attorney, she comes to Porter County from Youngstown, Ohio and will be responsible for ensuring that the health system complies with all federal and state regulations, conducting internal audits, and working in risk management.

This is the first time that Porter has had a senior leadership team member devoted just to compliance issues. Up until now, the responsibility was handled part-time by other top executives, such as the human resources director or the information officer.

An audit done by the Deloitte & Touche firm in 2003, covering the year 2002, recommended that Porter create such a position. Hospital board member Barb Young said efforts were underway to create the post when she joined the board last year.

Porter Board President John Rhame said not only did the audit recommend the position, but also Porter health officials believe strongly that the time has come to have a top executive devoted to compliance issues. He noted the growth of the health system as well as the increasing governmental regulations that make compliance a top priority for health systems.

Porter Chief Executive Officer and President Ron Winger said Koltnow will report to himself and to the hospital board’s Audit and Compliance Committee.

The new post of compliance officer was part of a restructuring of the top executive team last year. As part of that restructuring, the post of chief information officer -- a job dealing primarily with technology and formerly filled by the executive who has since raised allegations of fraud at Porter -- was eliminated as a top executive. Instead, the health system has contracted out for the position, Winger said.

Unexpected Gain

During the month of September, Porter received about $9.5 million more than anticipated in reimbursements stemming from its Medicaid and charity care provided in 2002 and ‘03.

Porter Chief Financial Officer Hugh King said Porter was expecting only about $1 million in what is known as the “state disproportionate share payments,” but ended up with $10.5 million.

King noted that Medicaid never fully covers the costs of treating patients, with a reimbursement to hospitals of only about 28 percent. The share payments are designed to help offset some of that loss. Using matching funds from the federal government, the state distributes the funds based on a review of all the Medicaid and charity care provided by health care institutions. Porter, the state’s largest publicly owned hospital system, provides above the federal standard in Medicaid and charity care, which contributed to the larger than expected reimbursement.

The reimbursement was the main reason why the September financial report for Porter shows a 61 percent favorable variance in total net operating revenue.

NICU, Refinancing

During a media conference with reporters following the public board meeting, Winger emphasized the hospital’s commitment to its Neonatal Intensive Care Unit.

“We’re absolutely committed to the NICU,” he said. “It’s one of the core services we plan to keep offering.”

During the recent public interviews with hospital board candidates, Center District Commissioner Robert Harper said he’s heard that Porter may be considering closing the money-losing NICU.

Dr. Ann Hilmo has recently left as the NICU neonatologist; Julie Wheeland, the president of the watchdog group, Porter Watch, distributed to the media copies of a letter written by Hilmo outlining an apparent breakdown in contract talks. Winger said Hilmo left for personal reasons.

Winger was also asked about a question aired at last week’s Porter County Commissioner candidate forum that suggested that Porter has decided to issue a bond to refinance its debt, which totals $45 million.

Winger said no final decisions about the bond have been made yet but that officials still expect to finalize the issue by the end of the year.

Hospital officials have made no secret of their potential plans to float a bond issue to restructure hospital debt. Such a bond has been discussed with reporters dating back to December.

New Members, Strategy

Wednesday was the first board meeting for newly appointed members David Butterfield and Richard Wathen. Butterfield was appointed to the board’s strategic planning committee and Wathen, to the finance committee.

The hospital board also adopted a 2005-07 strategic plan, which Rhame said represents a major step that will help the health system gauge its progress.

The plan includes three guiding principles: Continuously improve the quality of care and internal operations, maintain compliance with all legal and regulatory requirements, and maintain the health system’s A credit rating.

The health system’s priorities will focus on three strategies: Create an environment in which only the highest levels of patient safety and quality are acceptable; build “solid internal and external relationships” so that people always choose to be treated at Porter; and achieve all financial targets.

Car Seats

In a presentation to the hospital board, Porter nurse educator Cathy Goldschmidt, Madge Whittacker of Porter County United Way and John Ryan of the Portage Police outlined the health system’s acclaimed car seat inspection program.

So far this year, Porter has provided 224 car seat inspections at the Education and Rehabilitation Center and at the fire stations in Chesterton, Valparaiso and Portage.

Efforts are underway to provide car seat inspections for all patients in the hospital’s obstetrics, pediatrics and NICU departments, Goldschmidt said.

Ryan noted that police officers “cringe” when they see children in cars without car seats and that most of the time, the parents say they can’t afford to buy a car seat. Porter’s program allows officers to hand out vouchers for car seats to be installed by certified car seat technicians. The county currently has five technicians certified to do installations, with training underway to certify an additional 16.

The hospital board also heard a presentation about the second annual “Heartfelt Thanksgiving” celebration for patients who have had heart surgery in the past year. Heart patients and their guests will be treated to a luncheon and a talk by inspirational speaker Ann McWhorter-Klipstein.

Dr. Joseph Venditti, president of the Porter Foundation, commended the Intensive Care Unit nurses, who proposed the event as a way to re-connect with their patients. “It shows you the type of people who work in this institution,” he said.

Posted 10/28/2004