2017-12-07 / Letters

Assistance needed to insure survival of struggling hospital


Wills Memorial, like most small, rural hospitals, is in serious trouble, and if we are to save it, we must do something, and quickly.

In 2009, the Wilkes County Hospital Authority, after much thought, study, and consultation with experts, voted to undertake a regeneration project to address critical and in some cases dangerous infrastructure problems that Wills Memorial had. For example, the plumbing was rotting away and experienced almost daily failures of some kind. An engineering study estimated the cost to repair the system would be about $1 million. The electrical system was in an equally fragile condition with numerous components unsafe. Moreover, the hospital’s patient rooms did not meet current codes in several areas, including minimum square footage and handicap requirements.

At the time, the hospital was receiving an average of about $900,000 annually from the federal government to help compensate for patients who could not or would not pay for their care. Wilkes County was providing annual assistance that averaged $115,000 between 2004 and 2011, and Special Purpose Local Option Sales Tax (SPLOST) totals of about $850,000 in 2003 and $700,000 in 2009. Because of these positive factors, and the fact that the hospital had $3.7 million in reserves, the US Department of Housing and Urban Affairs (HUD) agreed to guarantee the bonds necessary to fund the $12 million project. Construction was started in August 2009, and the new patient wing, the first part to be completed, was occupied in November 2010.

Since that time, the situation has changed tremendously and to the detriment of Wills Memorial. For example, the federal subsidy to help pay for uncompensated care has declined to about $150,000 annually, and the county stopped providing annual assistance in 2011. (The county provided $18,000 to pay a consulting fee in 2015.) In addition, federal regulations regarding patient admissions and length of stay have tightened significantly. These restrictions plus the loss of Dr. Kuppuswamy’s dialysis patients when he stopped admitting have meant that the average daily census has declined from 18 in 2009 to nine inpatients per day in 2017. The obvious impact of this decrease is fewer patients helping defray the fixed costs of hospital operations. Another factor has been the decline of Medicare and a corresponding increase in Medicare Advantage insurance which compensates at lower rates.

To counter these changes, Wills Memorial engaged a national consulting firm in an attempt to partner with a larger organization with “deep pockets.”

This initiative has not been successful to date, but the contract says the firm does not get paid unless a partnership results.

Moreover, the hospital staff has worked tirelessly to reduce costs, increase efficiency, and cultivate new revenue sources:

. Salaries and wages have been reduced by 20%.

. Several employees are “wearing multiple hats.” The prime example is Tracie Haughey who was chief financial officer and added chief executive officer duties in 2015.

. Across-the-board pay raises were suspended in 2010.

. Benefit and supply costs have been reduced.

Another significant action has been a concerted effort to conserve cash by increasing accounts payable. However, despite this, cash reserves have declined from a high of $4 million in 2011 to $900,000 in October of this year. Accordingly, it is possible that Wills Memorial could run out of cash in the next ten to twelve months, and the hospital would close! The result would be the obvious negative impact on the healthcare of our citizens, the loss of 90 Wilkes County citizens’ jobs, and the impact on future economic development.

To prevent that happening, county financial assistance is desperately needed. From recent discussions, it is clear that a sales tax is much preferred to an ad valorem or property tax for providing assistance. The problem is the length of time required for passage of legislation leading to a sales tax, and it unlikely Wills Memorial could last that long. Therefore, the authority requests a temporary “bridge” of three mils be assessed on property for three years to allow time for a sales tax to become effective.

State law provides that a county can levy up to six mils of ad valorem tax in support of its hospital. If that is unacceptable, the authority asks that the commission vote unanimously to request our two state representatives to introduce legislation in the general assembly in January 2018. The legislation would provide for a non-binding referendum on the ad valorem tax to be conducted in May 2018. The referendum would allow Wilkes County citizens the opportunity to vote and decide “yea” or “nay” on the future of their hospital.

Regardless of which approach is taken, the fact is that Wills Memorial is in serious financial trouble and must have county assistance to help insure it survives. The authority strongly urges the commission to initiate action that leads to that assistance.

LAWRENCE BURTON chairman Hospital Authority of Wilkes County

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