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McClain puts hospital on road to recovery.

When Penny McClain was hired as CEO of Siloam Springs Memorial Hospital in May 2002, the city-owned facility, was circling the drain with a $2.4 million net loss. The hospital's unaudited annual Medicare cost reports showed only a $296,166 net loss--and that was the problem, McClain said.

SSMH fired its management company, Quorum Health Resources Inc. of Nashville, Tenn., and sued the firm in Benton County Circuit Court for accounting fraud, breech of fiduciary duties and mismanagement.

The case was sent to arbitration, and in May SSMH was awarded $425,000 in damages. In August, it was awarded another $725,000 for lawyer fees and other costs.

The hospital's board has since appealed the decision, believing it should have gotten a larger award.

McClain said the first thing she did was shore up the facility's bill payment system. She found drawers full of invoices, some six to 12 months old, she said.

"We were running the hospital literally with one foot in the door to keep it from closing," McClain said. "We had to start watching what was coming in, what supplies were being used. We weren't scrimping, because it's our job to provide quality care. We just had to set up some normal accounting practices."

McClain instituted more patient-friendly billing practices and turned a former meeting room into an expansion for SSMH's cardiac rehabilitation center. She's also started a sleep lab.

Cost reports showed a $60,131 net loss for SSMH last year, but McClain said "on a zero-based budget," the hospital actually made $600,000.

Revenue more than doubled from $19.4 million in 200l to $39.9 million last year.
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Title Annotation:NW journal: a look at news from Northwest Arkansas; Penny McClain, chief executive of Siloam Springs Memorial Hospital
Comment:McClain puts hospital on road to recovery.(NW journal: a look at news from Northwest Arkansas)(Penny McClain, chief executive of Siloam Springs Memorial Hospital )
Author:Wood, Jeffrey
Publication:Arkansas Business
Article Type:Brief Article
Geographic Code:1U7AR
Date:Nov 1, 2004
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