The Legislature passed a supplemental operating budget on March 8 that will bring some financial relief to Grays Harbor Community Hospital in Aberdeen and Olympic Medical Center in Port Angeles.
The news comes the same day as Community Hospital officials announced that more layoffs are coming as the hospital looks for greater efficiency in the face of declining patient numbers.
A hospital news release didn’t say when the layoffs will happen or how many jobs will be cut, but it did say that starting Monday departments will be required to show their plans for meeting new benchmarks of efficiency.
“We should start to see things happening sooner than later,” said hospital spokeswoman Nancee Long.
The state budget includes $1.2 million in state funds and $2.3 million in federal matching funds to boost the rates paid to the two hospitals. The money will come in the form of higher reimbursement rates for Medicaid patients. Treatment of those patients costs the hospitals more than they are paid by the government, both have said.
“We’re pleased with the new state budget, obviously,” Long said.
She described the help from the state as one leg of “a four-legged stool.” In addition to the budget we need to do what (the consultants) help us do, there’s still refinancing that will possibly take place and the rural health status goes into effect April 16.”
The refinancing is for a $35 million loan held by Keybank, and the rural health status will mean that Medicaid billing at the hospital’s clinics outside the hospital will be reimbursed at cost.
Legislators who supported the hospital were pleased that the final version of the budget included help for the two hospitals.
“Every family needs access to health care, and that means a hospital within driving distance,” said Rep. Steve Tharinger (D-Dungeness), who helped negotiate language in the operating budget to help rural hospitals.
“These much needed funds will help continued operations at these hospitals so families in the area can continue relying on preventive health care services, as well as life-saving procedures and treatments,” said Rep. Brian Blake (D-Aberdeen).
“No one’s happy with the way Grays Harbor Community Hospital has been run, but we can’t turn our backs on the people who depend on it,” said Sen. Kevin Van De Wege (D-Sequim). “We need to keep the doors open and push for improvement going forward.”
Also included in the new state budget: language to set up and fund a work group to take a hard look at ways to restructure and strengthen the rural health care system in Washington state.
For the past year, Grays Harbor Community Hospital has been working with every department to set efficiency standards and in December administrators said personnel changes would be made if departments couldn’t reach the standards. In January, the hospital cited its billing department for an inability to meet the standards and outsourced the work, cutting about 20 jobs.
The hospital’s financial crisis has only become more acute since then, with officials saying losses for 2017 are expected to exceed $8 million. Over the past month or so, a team of consults has been working with the hospital to find ways to cut costs and increase revenue.
“There has been a rapid assessment of productivity benchmarks and we have come to the conclusion that we must achieve a higher percentage of efficiency than originally speculated,” said a statement from the hospital. “This will mean a reduction in staff.”
Along with an inordinate number of uninsured patients or ones on government insurance, which doesn’t pay the hospital as much as private insurance, one of the major problems has been a shrinking number of patients. “Over many years, with the best of intentions, we have added people and resources to our hospital, but our volumes have steadily decreased,” the statement said. “This has created a serious situation that must be fixed immediately.”
The hospital’s statement said, “Beginning Monday, March 12, departments will be required to show their plans for meeting this benchmark. We will be transparent in our communications, sending weekly updates to providers, staff and the media to keep everyone informed of our actions. All appropriate measures are being taken to assure this reduction in force is done in the most compassionate manner. These swift, measured decisions are not taken lightly but are mandatory for financial stability.”
