Wrangell Medical Center CEO Marla Sanger updated the Wrangell Borough Assembly on the hospital’s financial situation at its Tuesday evening meeting.
“We are solvent. We’re just being very cautious,” she said.
In December, Sanger and acting CFO Olinda White approached the Assembly to reveal the hospital was experiencing financial difficulties. An annual audit had, among other concerns, reported finding a $3.5 million loss in written-off costs related to the hospital’s previous bid to build a new facility.
“I don’t think our financial situation is much different from then,” she told Assembly members at its Tuesday meeting. “We’re back to a more stable place but still watching things very closely.”
Sanger reported that as of March 18 the hospital had over $521,000 in reserve. By the end of February, this number was around $574,000.
“The number has sort of fluctuated up and down,” she explained. “By the end of March we’ll probably be similar to that.”
She explained total charges for the month of February came to $836,191, minus $131,793 for contractual allowances—fees not paid for by insurance companies. This brought net income to $704,398, short of around $860,000 in expenses for the same period.
Looking over the past seven months, WMC’s expenses were $5,929,100; by comparison, at the same point last year expenses were at $6,251,819.
“That indicates that we’re doing a good job with curtailing our expenses,” she said. “We’ve really worked on cutting travel,” and she said the hospital has also rearranged its staff scheduling to better cover peak hours.
WMC has found other ways to adjust scheduling, such as loaning PeaceHealth Ketchikan its new occupational therapist over a four-week period, at the same time keeping him busy while sharing costs and building relationships between the two hospitals in the process.
“We’re mostly trying not to impact our employees in a negative way,” Sanger explained.
While spending on some areas like utilities and itinerant labor have decreased, other areas like insurance costs have risen substantially. For the hospital’s general and malpractice insurance, Sanger said previous lawsuits and insurance payoffs have contributed to the higher premiums.
“It will eventually reset and come back to a normal level,” she added.
She reported Medicare payments were also starting to come in more regularly. However, a desk audit conducted in January determined Wrangell’s hospital owed the federal provider $108,000, which has yet to be repaid. Sanger explained that the rates Medicare pays are determined in part by volume; the hospital was treating more patients than expected, diluting the overall rate in payments.
“It’s difficult to be prepared for that, but that’s how it works,” she said.
While the Medicaid payment system was undergoing problems with its Xerox programming last year, the WMC financial officer at the time, Dana Strong, had secured $728,400 in available advances. Sanger said this foresight helped keep the hospital afloat when Medicaid payments became inconsistent throughout the state.
“That was success in the face of other tough times,” she commented. The advances have since had to be repaid, and so far WMC has paid back all but $11,000.
Sanger also took the time to invite Assembly members and the wider community to attend a public discussion at the Nolan Center on April 2 regarding construction of a new hospital facility. Dennis McMillian, president and CEO of Anchorage-based Foraker Group, will deliver a presentation on WMC’s current situation, its future options and the sustainability of healthcare delivery locally.
“The purpose of it is to re-engage the community,” Sanger said of the planned meeting. A pair of presentations will be held from 1-5 p.m. and 6-9 p.m.
Foraker will be assisting Wrangell’s hospital in the predevelopment phase of building a new facility. Wrangell voters previously approved $24.6 million for a Department of Agriculture loan toward the project, but Sanger said costs could be higher than that.
“We don’t know for sure what the dollar figure will be,” she said. However, Sanger suggested the designs and scope of a new facility have not been settled on. A preplanning group has said it wants to pursue something different from previous concepts.
The Wrangell Hospital Board of Trustees’ regularly-scheduled meeting was canceled for the second month in a row due to lack of quorum. However, the meeting was rescheduled for yesterday at the WMC conference room.
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