WhidbeyHealth down, but not out
— Created March 23, 2022 by Kathy Reed
By Kathy Reed
WhidbeyHealth is not going bankrupt.
That is according to officials from the Whidbey Island Public Hospital District. While the financial picture does look grim at the moment, efforts to heal the budget are offering some measure of hope. According to WhidbeyHealth Marketing Manager, Conor O’Brien, officials have been able to extend the district’s cash flow long enough to begin seeing revenue from the county property tax levy.
“Our cash position continues to need improvement though, and change coordination is underway with a number of activities,” he said in an email to Whidbey Weekly last week.
O’Brien attributes some of the bankruptcy rumors that have been circulating to a recent downgrading of the health district’s credit rating issued by Moody’s Investor Service.
“In the review, published March 2, Moody’s states that unless the hospital district was able to secure $17 million in liquidity, the district [was] at immediate risk of bankruptcy and unable to pay the March 18th payroll,” he said. “WhidbeyHealth, as of March 18 – without the infusion of additional, unplanned liquidity – is at 15.3 days of operating cash on hand and has 90-day financial projections that do not illustrate bankruptcy and/or the inability to fund payroll.”
Additional alarm bells rang earlier in the month when WhidbeyHealth’s interim chief financial officer and members of the hospital’s board of commissioners appeared before Island County Commissioners to ask whether the county was able to consider co-signing a loan to get the district over it’s financial hump. While unable to legally make such an arrangement, O’Brien said county commissioners were helpful.
“Following the hospital district commissioners’ presentation at the county meeting, our county commissioners went to work, facilitating conversations with Reps. Dave Paul and Ron Muzzall, Rep. Rick Larsen and the governor’s office to help explore additional funding options available to the hospital district,” he said.
At last week’s regular hospital board of commissioners meeting, it was announced county commissioners had been able to arrange payments of tax levy funds to the hospital district as tax payments are made, providing an instant revenue stream, rather than having to wait until April for a lump sum payment. WhidbeyHealth’s interim CEO, Mike Layfield, who came on board just over two weeks ago along with health management company HealthTechS3, have also started identifying options that could help the hospital district’s financial picture.
“The hospital district can continue to operate without a loan,” O’Brien said. “Current 90-day forecasted projections show stability, but not sustainability. Revenue enhancement and cost reduction will continue to be a priority to establish sustainable finances. The hospital district is using 100 days operating cash on hand as the benchmark for this measure.”
O’Brien said staffing shortages, which have been an ongoing issue for several months, are still challenging, but there have been no critical shortages that would cause issues or harm in terms of patient care.
” There has not been a mass exodus of employees from WhidbeyHealth,” he said. “Understandably, some employees have opted to pursue other opportunities in light of our financial position news. The medical center is short staffed in circulating nurse positions. We are and have been actively recruiting for additional personnel in this field for six months or longer. A number of reasons have contributed to challenges in hiring these positions, not the least of which has been the national nursing shortage and the prevalence of nurses leaving healthcare organizations for “traveler” or “LOCUMS” work – where nurses are contracted at significantly higher hourly rates for specific assignments, traveling around the country to fill needs.
“Being short staffed in the circulating nurse position has led to some overnight shifts without a scheduled circulating nurse,” O’Brien continued. “When this has been the case, WhidbeyHealth has optimized staffing to ensure coverage of our peak times for emergency room visits are staffed. The instances when non-peak times could not be staffed, surgical cases are placed on ‘divert,’ where the patient is stabilized, then transferred to a neighboring facility for care.”
O’Brien said surgical care staff are contracted workers who are not employed by WhidbeyHealth. Any surgical care employees who leave are replaced by the service provider. The arrangement is much the same for anesthesiologists.
“WhidbeyHealth has a managed services agreement with Anesthesia Associates Northwest, who employs the hospital district’s anesthesia providers,” he explained. “Should there be turnover within the pool of providers assigned to WhidbeyHealth, AAN assigns replacement personnel to fill.”
While the hospital district’s overall financial health is not great at the moment, officials are hopeful they will be able to make progress toward a slow, but hopefully steady, recovery.
“WhidbeyHealth is continuing to work to secure additional operating liquidity and reduce expenses to set a foundation of financial sustainability for the organization and to ensure our patients and community continue to have access to local healthcare,” O’Brien said.
Regular meetings of the hospital district’s board of commissioners are open to the public and are held the third Thursday of each month at noon, in person and online. More information is available online at whidbeyhealth.org.