Hospital financial strategies will take time

It probably won’t be until late summer that Grays Harbor Community Hospital knows whether emergency measures will bring it out of the financial crisis it faces.

The financial report hospital board members heard at their meeting Monday indicated that patient volumes in February were down by double digits in every category, compared to actual numbers for last year and the budget forecast for this year.

In February, the hospital lost more than $1 million, bringing losses for the first two months of the year to more than $1.7 million.

Working with the consulting firm Navigant, the hospital has already laid off 16 workers in management, and more layoffs are expected as early as today, this round hitting union workers.

Other cost-cutting or revenue-inducing strategies are already being undertaken, but won’t bear fruit immediately.

Many of the hospital’s patients receive Medicare or Medicaid insurance and because of legislative action in one case and operating changes at the hospital in another case, the hospital will eventually receive a higher rate of reimbursement for those patients, but that is a ways off and cash flow is an immediate concern, said board member Robert Torgerson, who is chairman of the three-person Finance Committee.

Simply put, Torgerson said, the hospital is still spending more money than it takes in, with collections for services way behind and the hospital struggling to satisfy the vendors it owes.

On Monday, the board voted to cash out a $1.9 million investment fund to make the cash available now. Although financial markets have been strong, they have also been volatile and Torgerson said there was concern about that.

The board has also asked the Grays Harbor Community Hospital Foundation, which is a separate organization that raises money to support the hospital, for $1 million. The foundation often buys items such as furniture and office equipment. Torgerson said the request was to reimburse the hospital for items that have already been purchased by the hospital itself. The foundation is expected to decide on the request soon.

“We’re at a crossroads,” Torgerson said after the meeting. “We have to do everything we can as a community, as a hospital and as a staff, to get us through this so we can survive and then recover.”

Torgerson is optimistic that some of the steps it is taking will make the institution stronger in the end, but said the next few months are going to be difficult. “If Navigant can do what they say and we get the money from those other sources … I’m a firm believer that we’ll not only survive, but thrive,” he said.

A key aspect of that, he said, is whether local people support the hospital and its clinics, Torgerson said. When local people go outside the area for medical services that are offered on Grays Harbor, or when local physicians refer patients outside the area, it reduces the hospital’s chances, he said.

Glen Ramiskey of Aberdeen, a frequent presence at hospital board meetings, urged board members to be more vocal advocates for the hospital and engage community support by letting the public know what’s at stake.

“Everybody in this community wants to see this institution be successful,” he said.

He said that in other times of crisis, such as mill closures and the depletion of the timber industry, there were efforts to bring the problems into the light and bring key members of the community together to look for strategies to deal with it, but he doesn’t see that happening in this case.

“What I want to know is what strategies are on the table now and if none of them work, what’s next?”