SWEETWATER COUNTY– Although it’s still early into the Coronavirus COVID-19 breakout in Sweetwater County, financial impact was discussed at the Memorial Hospital of Sweetwater County Board of Trustees meeting Wednesday afternoon.
Sweetwater Memorial CEO, Irene Richardson, gave a brief timeline of events that have taken place that have led to projected impacts on the hospital’s financials:
- March 13- President Trump declared a National Emergency due to the COVID-19 outbreak.
- March 14- US Surgeon General recommended hospitals stop all elective surgeries and procedures in order to preserve rapidly depleting personal protective equipment.
- March 16- All schools in Sweetwater County closed.
- March 20- Governor Mark Gordon issued a statewide closure for non-essential public places and businesses.
- March 23- MHSC postponed and or cancelled elective surgeries and now only performs urgent and emergent cases and procedures, as per recommendation from the US Surgeon General.
- March 25- Governor Gordon furthered his message for Wyomingites to stay at home.
“Due to the above events, people staying at home, people cancelling visits, and cancelling or postponing all our elective procedures, the result is a decrease in our volume by about 25 percent since March 24. And obviously, this has had an impact on our projected March financials,” Richardson said.
Richardson said the hospital is projecting a loss of $500,000 for March.
“As you can see, a week of this decreased revenue and decreased volume is affecting us,” she said.
If things do not improve throughout April, they are projecting a loss of $1.5 million for April. Similar projections are expected for May and June if the issues revolving around COVID-19 persist.
The Wyoming Hospital Association organized a call with hospital CEOs across the state and Senators John Barasso and Mike Enzi, as well as Representative Liz Cheney.
“Several CEOs talked about an even more dire financial picture with minimal days cash on hand,” Richardson said. “This is affecting all hospitals around the state and the country. We’re not alone in this, and that doesn’t make me feel any better, but that’s the reality.”
She said there are many unknowns in the situation still, as the situation changes daily. She said the hospital does not know when they will see the first hospitalization for COVID-19, nor the patients after that.
“I assume when we start seeing those patients, our in-patient revenue will start increasing and that may offset the decrease in out-patient revenue, due to the restrictions that have been placed on us. That still won’t make up the revenue we’re losing due to the directive to socially distance ourselves and have people stay at home, which is the proper and right thing to do. We support that,” Richardson said.
Advanced Payment Program
Richardson said the US Government has accelerated an advanced payment program for providers and suppliers for the COVID-19 emergency.
“This is basically a huge influx of cash for us if we need it. I’m going to consider this, hopefully, a last resort for us,” she said. “We can get a cash advance for the total amount of medicare payments over the last 6 months. That would equate to about $8.4 million.”
Richardson said that Tammy Love, MHSC CFO, ran some numbers and the full $8 million would give MHSC 33 additional days of cash on hand and the debt service coverage ratio would be .88.
“Right now, if nothing changes, I don’t recommend that we do that because our debt service number would fall below the 1.25 ratio, which is required for our hospital,” Richardson said.
If they asked for $4 million, it would provide 17 additional days of cash on hand and that would put the debt service coverage ratio at 1.5, assuming nothing changed from today, Richardson said.
The hospital would be required to start making payments 120 days after the government issues the loan, and they would have one year to pay it back. Assuming they received the loan on May 1, they would have to begin payments on September 1.
If the hospital went with the $4 million, which Richardson said would be the more reasonable option, the government would start decreasing MHSC’s monthly medicare reimbursements by about $333,000 each month, starting in September 2020 through August 2021.
Richardson said the hospital’s typical medicare reimbursement each month is about $1.4 million, so the hospital would be getting $1.1 million each month starting September.
“We would feel the affects of this through August of 2021,” Richardson said.
According to Richardson, Enzi, Barasso, and Cheney mentioned a $1.5 billion stimulus package for rural hospitals, but there are no details yet of when or how that would be allocated.
“We are literally on a day by day basis , we’re evaluating options every single day. Again, we don’t know how long this will last, I don’t think anyone knows that.”
“We are watching this daily, but we want to make sure we have good information to make certain decisions on. So far, we feel like we have about seven to ten days of March that is making us realize the new reality,” Richardson said.
Kim White, Incident Commander, gave a COVID-19 update to the board, in which she said the hospital recently received 800 N95 respiratory surgical masks from the National Strategic Stockpile.
However, MHSC still has a shortage of personal protective equipment (PPE), just like the nation does, but they are working with the county to receive more supplies.
To help combat the shortage, MHSC made the decision to postpone or cancel all elective surgeries to preserve protective equipment.
Since the same day surgery area is not being used due to the postponed and canceled procedures, that area is now being used as a second emergency room. White said this will help minimize staff and patient exposure to COVID-19.