Special sessions were recently held by the Pocahontas County Commission to discuss financial issues at Pocahontas Memorial Hospital. PMH CEO Mary Beth Barr and CFO Becky Hammer addressed the commission at both of these meetings about possible assistance with a financial crisis brought on by the coronavirus emergency.
The first meeting was held March 27 and the second meeting was held March 31. Because of social distancing, both meetings were held in the circuit courtroom on the second floor of the courthouse.
At the March 27 meeting, Barr and Hammer explained that, due to the coronavirus situation, the hospital’s revenues dropped dramatically in the third week of March, threatening their ability to meet their upcoming payroll. They said that revenues for the hospital were poor for first six months of the 2019-2020 fiscal year, however there was a positive turnaround in January that lasted until the bottom fell out later in March. A situation that will likely continue at least through April, since they were told by the state to stop performing all elective services due to the virus crisis. Those services make up a very large part of the hospital’s total revenue.
They said that the Rural Health Clinic was also suffering.
Instead of the clinic’s usual 60 patients per day, because of the Governor’s stay at home order, patients stopped coming to the clinic, resulting in a drop to about 20 patients per day. They said the hospital has been doing a lot of telemedicine, but they are not being paid for doing that, although they expect government reimbursement for that in several months.
Although there have been no Covid-19 patients so far at the hospital, Hammer said they need to be prepared for that to change, and they need to purchase additional ventilators – adding to the four ventilators they currently have – as well as other medical equipment.
Barr and Hammer said they need to borrow up to $250,000 from a local bank, and asked the commission to possibly co-sign that loan if the bank requires it.
Hammer summarized their current financial issue:
• The hospital currently has about 155 employees and they have not yet had any layoffs.
• They currently have two lines of credit – one of which is secured by a $250,000 CD, but there is no money available in those to meet the next payroll.
• The bi-weekly payroll is about $275,000 or about $550,000 per month.
Hospital board member Tim McClung suggested that they borrow enough money to meet their payrolls for several months rather then keep coming back to the bank for additional loans.
In a separate matter, Barr told the commissioners that they would like to hire Dr. Richard Durham, a Greenbrier Pulmonologist, who wants to move his practice here, which would increase hospital services and revenue. However, they would need to renovate space in the building for his office and treatment rooms. Start up expenses for this would be about a half a million dollars, according to Barr and Hammer.
Commission president David McLaughlin noted that a lack of revenue for the past two weeks could not be the sole cause of this financial crisis, as it has been brewing for some time.
Commissioner Walt Hel-mick remarked that the hospital was bringing two issues before the commission. The first being the inability to meet the next payroll, and the other to hire Dr, Durham. He said they must first figure out how to meet the next payroll before considering expanding the staff.
Commissioner Jessie Groseclose said he would like to see a five-year profit and loss statement detailing how each department in the hospital has fared, because they might need to consider trimming non-profitable departments and expanding profitable ones.
The commissioners ended that meeting without making any decisions other than to schedule a second special session on this topic for March 31.
At the March 31 special session, at the request of J. L. Clifton, an attorney and member of the hospital board, the commission went into a highly unusual and questionable executive session for most of the meeting.
When the commission returned to regular session, it was explained that the hospital was in a very promising discussion with Pendleton Community Bank to resolve their immediate financial issues without any commission involvement at this time. Barr said these discussions involved possible deferment of existing loan payments with the bank for three months and a possible new six-month loan for about $500,000 with no co-signer needed.
McLaughlin asked Clifton to provide a summary of most of what he discussed with the commission during the executive session.
According to that information which Clifton later provided this reporter, there was a discussion about misunderstandings between himself and the commission, and he told the commissioners that cutting any of the departments at the hospital would not solve problems, just deprive the community of hospital services. Clifton also told the board that merging or affiliating with any outside hospital organizations would not be in the best interest of the community. He discussed the hospital’s 2018 financial loss of $1,000,000, which they survived and turned around. He stressed the need to work closer with the county commission and suggested that that both they and the hospital’s board should take guidance from each other to help the hospital.
The commission adjourned the meeting as there was no immediate need for commission action at this time regarding any of these matters.