Caught in a bind

Lewis County Hospital, Lowville. Watertown Daily Times

LOWVILLE — The return of patients to their doctors and elective surgeries along with federal stimulus revenue both large and small are projected to help Lewis County Health System land softly at break-even by the end of the year. Unless, of course, it doesn’t. There are a lot of variables.

The first half of 2020 started well and ahead of projections for the Health System, but by the end of March, the bottom fell out of the budget with a $1,865,000 loss followed by a $1.7 million loss in April.

The April loss was brought down to $117,000 with the help of CARES Act stimulus income of $1,566,000, according to the Health System Chief Financial Officer Jeffrey W. Hellinger, and with the second large influx of supportive federal funding totaling about $4.77 million, the Health System could break even by the end of the year.

Could.

“We’re going to use that money to help our financials in March and May and June and then, as we continue to increase our volume, hopefully we can get back to where we were hoping for which is break-even. It’s all about volume,” Mr. Hellinger said.

Surgeries and, as of last week, the Emergency Department, are the two areas that are showing “significant” volume increases so far according to Health System Chief Executive Officer Gerald R. Cayer, but there have not yet been enough to make up the ground lost when surgeries were put on hold in March and April.

“January and February were beating budget, and then we stopped doing elective surgeries in March. It wasn’t a small decline, it was a decline graphically when the bottom fell out,” Mr. Cayer said.

In the first quarter of the year, the hospital was short 222 surgeries from the 562 that were budgeted, but in May, the number of surgeries were “on pace to meet budget” he said, now that the pre-cautionary steps created to keep patients and staff safe from the ongoing novel coronavirus threat are solidly in place. Doctors visits and diagnostic services are not yet back to pre-COVID levels, Mr. Cayer said, although they are steadily increasing.

Despite the “volume” factor heading in the right direction, there are significant financial obstacles to breaking even this year: Medicaid cuts and mandated nursing home staff testing twice weekly.

While the residential facility did receive $450,000 in federal funding to help with pandemic-associated costs, compared to the pandemic-associated expenses, it won’t last long.

“Clearly it’s welcome relief, but we still have a significant challenge with two times a week testing of staff. For us, our cost is $50,000 per week,” Mr. Cayer said, “The Department of Health has been very clear that they are not covering the cost associated with that mandate.”

At that rate of spending, he said the Health System will have a $2.6 million delta “if we can’t figure out a revenue source for this mandate.”

The 1.5 percent Medicaid cut across the board to “hospitals, nursing homes and other healthcare providers for services on or after April 2,” is expected to result in a loss of $184,000 for the Health System, including the nursing home, according to Mr. Hellinger’s calculations, providing additional challenges to balancing the budget and the services they provide.

It’s a cut that may deepen depending on state-level decisions about how to address its mushrooming deficit and could impact the services the Health System can afford to provide.

While there are no clear paths around these financial obstacles, Mr. Cayer said he and his teams will focus on what they can control right now: driving volume, expense management; keeping residents, patients and staff safe; and “working with anyone who will give us the time of day — whether it’s local leadership, regional leadership or state-wide leadership — on how we are going to address this mandate around testing of employees in nursing homes two times per week.”

The hospital had a clean audit of last year’s numbers that resulted in an increase in revenue for the year from about $191,000 to $738,000, the precarious situation for this year’s $80 million budget keeps it in perspective.

“While we were pleasantly surprised based with last year’s audit, we could swing to a multi-million dollar loss next year.”

Three of the 30 people who volunteered for an eight-week furlough on April 21 to help cut costs while elective surgeries were canceled have returned to work and others will follow, Mr. Cayer said, as more people return to the hospital for their healthcare services.

Johnson Newspapers 7.1

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