Hospital finances mangled, Cox is leaving post

Eureka Springs Hospital Commission has pledged investment CDs to cover payroll tax payments to the IRS and payments to vendors that were not made during the last part of 2003 and the first half of 2004 totalling approximately $366,000.

Acting Commission Chairman Bill Fort made the information public Friday evening during a special commission meeting.

Hospital Administrator David Cox was in Louisiana and unable to attend. Fort said he has told the physicians he will be leaving his post and moving to Louisiana. He is only working one day a week at the hospital.

He was hired as hospital administrator in mid-April of 2001. Fort said Cox took his first vacation from the post this summer when he went to Africa visit his son, a medical missionary.

Fort said Monday he remembered Cox telling him last fall he would not be in the position another year. He said Cox will be working at least another two weeks.

Several hospital staff members were on hand for the special meeting and reported administrative decisions that have unnecessarily cost the hospital $300,000 for physician and nursing services.

Commissioners were obviously shocked by the information.

Fort had opened the meeting calmly reporting "a big problem in the business office. A check for thousands of dollars was left in a drawer and not cashed for four months.

"The accountant had not paid the payroll taxes for the last quarter of 2003 and the first quarter of 2004.

"We didn't know about all of this until the IRS descended and demanded payment of $116,000. The commission had to come up with the money immediately, so we pledged a portion of our CDs to cover that amount.

"We then found out that $250,000 worth of accounts payable had not been paid and some of our suppliers were hurting. We pledged an additional $250,000 on the CDs to cover the amount owed."

The decisions to make the pledges were handled by individual telephone calls to commission members by Cox.

Fort did not know how much money the commission had available in all of its CD accounts in various banks. He said the pledged amounts were against CDs in the Arvest bank.

Asked if the person responsible for these errors was still working for the hospital, Fort didn't know, but said, "I don't think so."

Staff members attending the meeting said later they thought the person had left the job for a short while but had been re-hired.

Fort confirmed Monday morning that person is still working in the business office.

He also said "a lot of the outstanding debt has been paid. We only owe about $166,000 now."

Fort reported "outsourcing of collections is costing the hospital $13,500 per month and has forced the hospital $68,000 in the red."

Fort reported emergency room coverage and hiring registry nurses cost the hospital $66,275 in June, forcing the hospital to show a $10,000 loss.

"All of this has happened since the first of the year," he said. "We are not going to have a 'David (Cox) bashing.' He has been involved and overwhelmed with the USDA (United States Department of Agriculture) loan. He depended on staff members to do their jobs and they didn't do them.

"I don't know if we will ever get the loan," Fort said. "We are getting so much opposition from you-know-who. So we are approaching the new hospital from a different angle."

The loan request Fort referred to is $9,625,000 to build a 22 bed hospital on Passion Play Road, adjacent to the Eureka Family Medical Center.

Approximately $3 million of the loan will be for land and clinic acquisition, architectural plans and specifications, loan fees, etc. The remaining $6 million will be for actual construction.

The initial loan application was denied in September of 2003 by Tom Tougaw, a rural development manager in the USDA office in Harrison.

An appeal hearing was held in Maumelle, Ark., in October and the denial was eventually overturned.

An opposition campaign to the new facility has been mounted by representatives of St. John's Hospital - Berryville and the parent company, the Sisters of Mercy, based in Springfield, Mo.

The application has been "in process" since October. Cox organized Community Health Resources, Inc., as the loan applicant. Members are Cox, architect Laura Morrison, Dr. Dan Bell, Bill Bradley, CEO of Northwest Medical Center in Springdale and Bentonville, competing hospitals; and Mark Bevers, administrator of Northwest Medical Center.

In the last public meeting of the commission, May 11, Cox said he was waiting for approval of the loan from the Washington, D.C., USDA office "any day now."

Inquiries made by this newspaper the first week of July through Sen. Blanche Lincoln's Washington office report "no change in the loan status."

Staff members told the commission Friday evening registry nurses were being hired for weekends and to cover shifts at salaries nearly double what staff nurses are making "on the direct order of the administration."

One instance described was that of a nurse on staff, who wanted to work weekends, was refused the 50-cent difference in pay per hour and a registry nurse hired instead.

Another staff member said, "We need some decisions to be made. The preference is to outsource all of these services, they don't want to hire staff. We are all being told additional hiring will be based on the granting of the loan. We are told to just hang in there."

On staff member said, "This whole situation is extremely frustrating. There is no continuity of staff. Mistakes are being made. Evaluations of employees and raises are months behind.

"Being told to 'hang in there' while we are waiting for the loan to be approved is an insult, abuse and neglect of employees.

"Some of the employees in the hospital are being served grandly while others are not being treated fairly. There is an inside circle who get special treatment."

"The employees and staff should be our number one priority," said Tammy Bullock, newest commissioner. "We have people who care about their jobs, their patients and the community. We shouldn't be neglecting them."

"I had no idea the situation was this bad," said Commissioner Pam Crockett. "I never knew there was so much dissatisfaction in the hospital."

Hospital finances mangled, Cox is leaving post

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