NVH makes cuts to control warrants

TONASKET – North Valley Hospital District’s warrant level has stubbornly remained at over $2.5 million for several months, putting the hospital in danger of not getting its debt to Okanogan County paid off by its target date of Dec. 2013. Faced with that prospect, the senior leadership board and the Board of Commissioners decided on a series of cuts to rein in expenses.

Those cuts included the layoff of eight hospital employees, including three senior administrators; the closing of the Tonasket Family Medical Clinic to civilians; the cancellation of a number of outside contracts; and the suspension of the second floor and basement construction projects.

As of Monday, Aug. 20, the warrant level was at $2,652, 997. NVH was targeted to have that level down to $1 million by the end of this year, which even with the cuts is unlikely to happen.

“It was a grueling week,” said NVH Chief Executive Officer Linda Michel. “The issue is that we’ve been stalled at that level for quite a few months. When we did our financial analysis of the rest of the year, we estimated we could get it down to $1.9 million if nothing happened (that required more money be spent).

“We’re trying to be proactive to reduce our warrants, and the first step was to reduce our staff, because we want to be financially responsible both to ourselves and to our community.”

Michel said that staff reductions were not determined by seniority, but by skill, ability and the hospital’s capacity to cover their duties with other personnel. Of the eight employees that were laid off were three senior administrators: Chief Financial Officer Bomi Bharucha, Support Services Director John Boyd and Long Term Care Director Judy Gladden.

“There were no direct caregivers laid off,” Michel said. “That’s the reason we started from the top down. I don’t feel you can lay off the people that keep the floors clean and protect people from infection, and not those at the top.”

Laid off employees received an additional two weeks of pay, with an official layoff date of Sept. 2 to keep their benefits active through the end of September. Michel said the layoffs would save an estimated $97,000 over the rest of this year and $292,000 next year.

The Tonasket Family Medical Clinic’s closure date for civilians will occur on or around Sept. 17, although Michel emphasized that the VA clinic will remain open.

“We have staffing issues there,” she said. “The VA contract is something we must abide by and it’s the only service for veterans in this area. Other patients have the option to go to Oroville, but the veterans don’t. We’ve been short-staffed there, and we just can’t provide quality care to both (civilians and veterans).

“We must continue that (VA) service and concentrate our efforts on making it the best anyone can find anywhere.”

Through the end of June, the clinic lost $79,709, a number Michel said would be annualized to $182,156 if it stayed open. The VA clinic is nearly $60,000 in the red, with 464 current enrollees, but would break even with 575 enrollees.

“We feel we can certainly turn that around with more enrollees, and we know they are out there,” Michel said. “The VA wants to put in telemedicine for the vets, which would be added revenue for us.”

Michel said that with both clinics open in 2013 (assuming no more VA enrollees) the combined loss would be over $240,000.

Construction on the hospital’s second floor will be suspended, as has the $125,000 architect’s contract for basement construction.

“We have the west end just about finished, and we’ll complete it for our surgical doctors’ clinics and two new recovery rooms,” Michel said. “At the east end, we’ll use the supplies we’ve bought, and then see where our warrants are before we continue our construction.

“We’ll have plenty of room downstairs, too, if we’re only seeing the veterans downstairs. We’ll try to have that east wing done with the specialty clinics by Sept. 17 as well.”

Michel estimated that the cancellation of a number of contracts with outside services (such as consultants) would save an additional $167,000 this year and $264,000 next year.

She added that there could be more changes in the offing as well.

“We’re still looking at our revenue versus non-revenue-generating departments,” Michel said. “We’ll be doing some extensive research in those other departments.”

The Board of Commissioners next meets Thursday, Aug. 30, in the Administrative Board Room.