MINUTES OF A SPECIAL JOINT MEETING OF THE EXECUTIVE
AND HOSPITAL COMMITTEES OF THE BOARD OF VISITORS
March 24, 1977
A special meeting of the Executive Committee and Hospital
Committees of the Board of Visitors was held on Thursday, March
24, 1977, at 7:30 a.m. in the Sanger Hall Board Room.
Present were Drs. Blanton, Gayle and Gwathmey and Messrs.
Dabney, McGehee, Obenshain, Scott and Seaborn. Also present
were Drs. Beller, Neal, Vasile and Willett; Messrs. Holmes, Kidd,
Rice, Ross and Wink; Miss Cosby and Mesdames Holder and Price.
Dr. Blanton called the meeting to order and announced that
the purpose of the meeting was to inform the Board of the current
operating and financial status of the Virginia Hospital Laundry.
Mr. Kidd reported that, at the January 18 meeting of the
full Board of Virginia Hospital Laundry (VHL), the General Manager
of the VHL informally presented the December operating figures
and financial information from Price, Waterhouse and Company.
The General Manager likewise indicated certain trouble with the
Laundry and requested an increase in rates. Subsequently, a
meeting was held on January 25 in the law offices of Hunton,
Williams, with Mr. John Ashton and members of the Executive Com-
mittee of the VHL, to review the "difficulties" and to respond
to the General Manager's request for an increase in rates and/or
refinancing. Mr. Kidd, who was not at the Board meeting on
January 18 but was present at the Executive Committee meeting
on January 25, stated that when he became aware of the problems at
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the Laundry he requested Mrs. Lucy Holder and additional personnel
from Hospital Management Services and Mr. Christian (Pat) Rice
from Hospital Fiscal Services to look into the situation, identify
the nature of the problem and make appropriate recommendations.
Mrs. Holder reported on the study made by the MCVH Manage-
ment Services Department. The analysis resulted in numerous
recommendations and identification of additional areas that need
more detailed study. The areas in which additional effort would
have the grestest impact on reducing costs and increasing plant
capacity are:
• Control of linen purchases and inventory losses
• Production payroll costs
• Plant capacity as it relates to the ironing and
tumble-fold sections
Mrs. Holder continued that the Management Services Depart-
ment recommended to the VHL Board further analysis and system
design efforts in the following areas immediately:
• Design and implement a weigh-in procedure for
soiled linen with the intent to charge member
hospitals a per pound penalty for lost linen.
Further effort would be directed at examining
the feasibility of a piece count-in system for
establishing penalty costs.
Examine in much more detail the possibility of
modifying current operating procedures (e.g.,
soil sorting) in order to maintain a staff
similar to Victor Kramer's recommendations.
Examine in much more detail the apparent plant
capacity bottleneck with the ironing and tumble-
fold areas in order to gain a higher output from
the plant.
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Mr. Rice reported that the Controller's Office at MCVH, in
conjunction with the Management Services Office, was able to
pinpoint some of the problems and make an assessment of the
present financial situation of the Laundry. Mr. Rice stated
that there is a $100,000 per month drain on the cash flow of the
Laundry at the present time. The following recommendations were
made to the Virginia Hospital Laundry Board of Directors:
The hospitals contribute $220,000 in capital
to be used as good faith payments to creditors
and for bond payments.
The per pound charge to member hospitals be
temporarily increased to $0.40 per pound.
Monthly financial statements be prepared and
reviewed by the Board of Directors of the
Virginia Hospital Laundry.
The hospitals periodically review the financial
practices of VHL.
Audit the past year's financial records, including
an inventory, to be completed as soon as possible.
Mr. Kidd reported that the Executive Committee of the Virginia
Hospital Laundry had taken the following steps:
1. Fired the Laundry Manager
2. Agreed to bring in a consulting firm
3. Appointed Mr. Pat Rice Treasurer of VHL
4. Increased the price per pound for cleaning
linen to $0.40
5. Agreed that the Board of Directors meet monthly
6. Working on correcting the inefficiences as out-
lined in the two preceding reports
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Mr. Kidd also reported that contact has been made with
Connecticut General, which has a large investment in the Laundry.
They seem willing to refinance the original bond issue to include
the additional financing presently required or to extend a loan
for the additional amount.
A discussion followed on how this should be handled with the
press. Mr. Van Pelt indicated the VHL Board had decided not to
give the information to the press at this time since all the in-
formation that was needed was not available. Mr. Van Pelt continued
that he hoped that the story would hold for two to three weeks
until the VHL Board had a better handle on the situation. Mr.
Rice stated that, as an inventory had not been completed, any
information would be based upon assumption rather than fact.
Dr. Blanton stated that he was disturbed that, although this
information had come to the attention of the MCVH staff in Decem-
ber, the Board of Visitors was not being told until the end of
March. Mr. Kidd stated that regular reports would be presented
to the Board of Visitors.
The meeting was adjourned at 9:50 a.m.
Approved: Richard D. Obenshain,Secretary
