Creating a Legacy: Hospital’s CFO Retires After 23 Years

Jeri Nelson, who has faithfully served as Eastern Plumas Health Care’s Chief Financial Officer for 23 years, retired Friday, June 15. She left behind a frighteningly neat and empty office as she hugged Katherine Pairish, the incoming CFO, and said, “Take good care of it.” Several of those who worked closest with Nelson went into her office after she went out the back door. One of them, Teri Becky, who had worked alongside her for that entire 23 year period, broke down and cried. CEO, Tom Hayes, called her, “the best CFO I’ve worked with in my career. She’s very honest and direct, which I really appreciate.”

What makes for that kind of response from fellow employees? A word that Nelson often used as a measure for what was right in guiding the hospital and her response to any given crisis was “loyalty.” Nelson embodied a sense of loyalty that meant putting the hospital’s good front and center in everything she did. There was a great need for someone of Nelson’s caliber when she arrived at EPHC. Shawna Leal, Clinic Back Office Supervisor, who has been at EPHC for 26 years said, “Her determination and love for what she does is a huge part of why we are still here today. I truly believe that her drive was to help the hospital, but also to help employees and their families.”

Taking a Look Back…

As Nelson recalls, it was 1995 – she was “married to a local guy” and had recently relocated to Graeagle. She was looking forward to raising a family and riding her horses, but after a few months, she got bored. She looked in the local newspaper and saw an ad for an accountant. A CPA by trade, she thought, “I can do that.”

The hospital Board had recently fired Brim Healthcare, the management company that had been running EPHC. According to Teri Becky, she and Randi Collier, who were both working in the Finance Department, had discovered a drawer “plumb full of checks that were not mailed and were being held by the CFO,” because there was no money to pay the bills.

Becky and Collier told the Board, “we felt the CFO was cooking the books,” adding that they “had to race to be the first ones over the bridge to the bank to deposit our paychecks before they bounced.” Becky stated they were spurred to action because they knew if they didn’t, the hospital would close. “It was that bad.” Luckily, the Board took them seriously and started looking into the hospital’s finances, which resulted in the firing of Brim Healthcare, and their CEO and CFO.

When Nelson interviewed for the accounting position,, she met with Charles Guenther, who had been CEO for all of a week. He made it clear that “he needed some help rebuilding the organization from the top down,” said Nelson. “I didn’t really want any responsibility at that time – I didn’t want to be a CFO, but I knew I was up to the task . . . It’s not in my nature to turn my back on things.”

She paused and shook her head. “I had no idea how bad it was.”

They were still using paper ledgers, she said, which meant “you could create any financial record you wanted. They were one sided entries so they didn’t have to balance, and they didn’t balance. It was amazing.” Records didn’t match, they couldn’t pay or get paid, the buildings were old and in ill repair, and all the equipment was old, she recalled.

About six months into the job, Nelson filed for bankruptcy on behalf of the hospital. “We owed about $850,000 that we couldn’t pay,” she said. The hospital wasn’t making enough to survive given all the services they were trying to provide, so they had to cut some things, one of which was maternity. They couldn’t afford to pay physicians 24/7 on call for the small number of babies they were delivering, said Nelson.

“That was hard – a lot of people working here were born here,” she said.

But, as she’s had to do many times since, in concert with the CEO and the Board, “We needed to think about what to do to keep the whole hospital open. We still have to think that way,” said Nelson.

The nurses had unionized, “so one of the things we wanted to do was get them to trust administration and believe that we’d follow through on commitments we made.” She worked with the Board and the CEO to make things right with the doctors and nurses, who did agree to leave the union behind.

Next, they came up with a bankruptcy plan. They had to pay vendors a certain amount on the dollar. Some vendors refused to work with them, and others required cash payment. They tried to do right by local businesses as much as possible, Nelson said.

The hospital didn’t come out of bankruptcy until 2004 – nine years later. But, “we met the terms [of the bankruptcy]. Not too many small rural hospitals manage to survive that. A lot of them just closed their doors,” said Nelson. “We were up against a lot of odds, but with our community, staff, and Board support, we made it. But, we never looked too far out – it was what can we do this week, this month.”

The biggest frustration along the way was dealing with incessant additions and changes to government regulations. If they thought you were doing something wrong, Nelson said, they wouldn’t tell you, they’d just use it as an excuse not to pay you. “As soon as you got something fixed, something else would change…these affected how we got paid, so you couldn’t ever relax, we were always looking ahead, saying ‘What’s coming at us next?’”

Because, for example, Medi-Cal pays EPHC around twelve cents on the dollar, Nelson fills out a cost report at the end of the year. There are several federal and state programs she has researched and applied for that “backfill” some of the money the hospital isn’t paid by Medi-Cal and Medicare for services. Without those extra “pots of money,” as Nelson calls them, EPHC would likely have been forced to cut additional services.

Nelson also worked with the Board and CEO to get EPHC designated as a critical access hospital and its clinics designated as rural health clinics. These special categories are accorded to hospitals and clinics in rural areas, where access to care would be severely compromised if they were forced to close. These designations allowed EPHC to avoid some of the most draconian of the state and federal regulations.

In addition, she said, the hospital gradually added services that it felt the local community needed. One of the first things they did was to expand skilled nursing. “There was a huge waiting list and no other access to long term care,” said Nelson. They added dental, which was vital because no other local provider would take Medi-Cal patients. “They had no place to go but the ER,” Nelson said, “so we did that.”

Taking the risk and expanding services “was a team effort, involving a ‘can do’ spirit,” said Nelson. “I wouldn’t have stayed otherwise.” The Board had to trust that Nelson and current CEO Tom Hayes, who came in 2009, were telling them the truth when they pushed for an expansion of services. “The Board has been very supportive,” she added.

Looking forward, she said, the hospital will continue to look to the community and the Board to determine what services are really important, and modify things accordingly. “We’ve always been open to change,” she said.

Asked what convinced her to stay through all the difficult times, Nelson didn’t hesitate: “I love what I do – always have . . . I knew how important [the hospital] was to the community. I wasn’t going to let it go down if I could help it. With the added services, you can see we’re helping kids, we’re helping families, we’re saving lives. I feel very fortunate. I did get the opportunity for all these years, to accomplish some good things, with the help of a lot of good people – too many to name.”

Nelson is ready for a new chapter, however. “I love the area very much. I have two dogs, two horses, and I want to be able to get out on these beautiful days – not sit in front of a computer, but enjoy my time in Graeagle. That’s what I moved here for – it’s only taken me 25 years!”

http://www.ruralhcs.com/

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