A series of meetings between Southeast Alaska Rural Health Consortium and the City and Borough of Wrangell are planned for early next week.
The regional health group is entertaining making an offer to assume control of Wrangell Medical Center, a municipally-run critical access hospital which has in recent years fallen into financial difficulties. Starting Sunday afternoon and lasting through Tuesday, SEARHC will hold a series of meetings with city staff, hospital transition steering committee members and the wider community, in order to go over feasibility findings its contractors have produced regarding the hospital.
At the regular meeting of the Borough Assembly at its May 8 meeting, city manager Lisa Von Bargen informed its members SEARHC has advised her it would like to assume administration over WMC within 120 days or less, after studying its aging facility. The specifics of its findings in the form of a report were unavailable to the public by Tuesday’s press time, but are expected to be presented at next week’s meetings.
Built in the late 1970s, at a town hall-style meeting last month, WMC administrators reported numerous problems with the hospital, both structurally and with its utilities. Contracted by SEARHC to assess the building in preparation for an offer, Minnesota firm Wold Architects & Engineers reportedly estimated current WMC facilities would require $24 million to be brought up to code, a sum neither the hospital nor the city currently has on hand to spend.
One component of the hospital’s financial delicacy is the age of its facility, in the sense that it no longer has depreciation to draw upon when being recompensed by federal coverers Medicare and Medicaid. The cost of needed capital fixes, such as to its fire suppression system and water mains, would also put the hospital quickly into the red according to Robert Rang, WMC CEO.
“There’s no question in my mind that we need a new facility,” Von Bargen said.
However, in a concept of a new facility drawn up for the city and presented in November, estimated costs for a new facility and equipment are at around $90 million.
If it found the numbers worked to its advantage, SEARHC has expressed interest in assuming responsibility for construction of a new facility on a combined campus with the Alaska Island Community Services clinic, which would improve service provision there. SEARHC acquired the Wrangell-headquartered care provider AICS last year in a separate deal, and has since assumed management of its operations.
Since the acquisition, former AICS executive Mark Walker has reported the organization has improved its revenues by 20 percent under the SEARHC umbrella.
“We had savings in our cost of health care insurance for our employees, and in the cost of other services we gained efficiencies as well. Our improvements in revenue were primarily through increased reimbursement through Medicaid and Medicare,” he explained. “The result of the merger is that services are more sustainable for the community of Wrangell in the long run.”
Walker also asserted the merger and the access to SEARHC’s resources had a positive effect on staffing in Wrangell, particularly in the realm of medical services, in administration and in behavioral health.
“We have more employees now since the acquisition,” he said.
At last week’s meeting, Rang reported the hospital had the equivalent of roughly nine days’ operating cash on hand, factoring out $250,000 it was borrowing from the city and another $150,000 in hospital foundation funds earmarked for new equipment. While AICS had been financially in a much healthier position before its acquisition than Wrangell’s hospital is in now, Walker said long-term trends in the healthcare industry looked problematic.
“Our merger was not based on an immediate need,” he said. “Strategically aligning with SEARHC would be best for services in Wrangell.”
Closely associated with WMC before the acquisition, AICS still maintains physician and pharmacy service agreements with the hospital, and purchases a significant fraction of its overall services.
City clerk Kim Lane explained no actions were expected on the part of the assembly immediately after the meetings SEARHC has scheduled. However, by mid-June an offer could potentially be up for consideration.
SEARHC intends to host its first stakeholder committee meeting at 3 p.m. on Sunday, inside the AICS clinic’s community room, followed by another meeting with the steering committee there at 5 p.m. On Monday, the organization will be meeting with clinical and hospital staff during the day, with a community meeting planned at the Nolan Center at 6:30 p.m. On Tuesday, a 6 p.m. presentation to the assembly is scheduled to be held at City Hall.
Reader Comments(0)