020420-du-GCH

A sign outside Geary Community Hospital directs patients where they need to go. GCH is in financial trouble and trying to find its way out.

Geary Community Hospital is in a hole and, according to Interim CEO Don Smithburg of Community Hospital Corporation, it’s critical for GCH to begin to extricate itself from this hole by or before March 31 of this year.

He said the reason for this is the amount of bad debt GCH is carrying in its accounts payable.

“It doesn’t mean we’re going to close the doors on April 1, but what it does mean is that we’re probably going to have to get to the point of really stretching out our accounts payable even further than we already have,” Smithburg said when addressing the Geary County Commission Monday afternoon.

Smithburg said after the meeting that he did not believe GCH would need to close its doors this spring. There is no plan in place for that to happen, he said.

“I don’t even want to think about it at this point. That’s not on our plans,” he said. “We have not planned for that. But we have planned for there to be multiple community stakeholders to help keep it going.”

He conceded that it was possible, if funding could not be acquired.

"We have a lien on some funding,” Smithburg said. "And that will buy us some time. And that's why it's a four part plan. All of these things need to happen, not all by March 31. But we need some indicator that they are."

The hospital is currently trying to collect on past due accounts. But if the hospital’s financial situation has not changed by the end of March, GCH will be in trouble.

"if some funding that we're pursuing doesn't come about by then, then we're going to have a tough time keeping up with our payments with vendors and suppliers,” Smithburg said.

Smithburg brought with him several members of the GCH Board of Trustees when he briefed the Geary County Commission, including Theresa Bramlage, who chairs the GCH board.

Bramlage told commissioners the hospital was currently looking at relationships with outside agencies and nixing ones that didn’t overall benefit the hospital.

The hospital has lost two providers recently, he said — one of which has left and one of which has given notice — citing fear of the hospital’s future health and sustainability.

Smithburg said there were plans to fill those positions, but he still felt it was cause for concern.

There is a four point plan, Smithburg said, for the hospital to save itself.

It requires, he said, an “operational turnaround,” the second is Medicaid expansion, philanthropic support, and an increase to the number of mills GCH receives from the county.

Medicaid expansion is being discussed by the state during this legislative session. Smithburg told the commission GCH was in serious conversation with the Geary Community Healthcare Foundation about a significant donation from the GCHF. Other charitable foundations, he said, have also expressed an interest in helping the hospital.

County counsel Steve Opat asked Smithburg what the hospital would do — if it could bridge the gap — if funding was not immediately available. If a measure to raise the mill levy or pass a sales tax measure were to cross the ballot in the 2020 election and if public voted in favor of it, he pointed out, it would still take time for GCH to receive those funds.

Smithburg said he was unable to offer a “really clear” answer until he had solid figures on some other questions, including what the hospital might bring in from charitable donations and fundraising.

“It’s the $64,000 question,” Smithburg said.

“No matter what we do, we're gonna have to ask for public approval,” Opat said.

If the county decides it wants to raise the mill levy more than two and less than six mills in favor of offering more funding to GCH, it will have to publish its intent in the newspaper twice over two consecutive weeks. If the voting public wishes to bring a petition to the county with the signatures of five percent of the voting public who took part in the last general election, an election will have to take place. To raise the mill levy any further than that between six and 10 mills, the matter would have to be on the ballot ion the next general election.

Smithburg offered an overview of GCH’s financials, saying December had been a better month for the hospital than the one prior. In December, GCH brought in a small profit of roughly $9,000.

“Originally we thought we were going to hit this cliff at the end of the calendar year,” he said. “But because operations have continued to be improving at a faster pace than anticipated, we’ve been able to buy some time. We’ve been able to keep up with vendors, even though most of them are on the payment plan — vendors and suppliers — we’ve been able to stave some of that off.”

However, the cliff is approaching, according to Smithburg.

“Our issue is, this cliff is real,” he said. “It is not anything but real.”

He invited the county to put GCH “under the microscope” to verify its position.

Commission Chair Keith Ascher, after hearing from GCH, said Opat would be meeting with CHC to hammer out exactly what needed to be done.

According to Ascher, the county is already brushing up against the tax lid. He indicated that he was in favor of the public deciding.

“In my personal opinion, it would be a matter of, if they want to increase the mills to help the hospital, then somebody else is going to lose that we're supporting now,” he said. “That’s the only way it’ll work."

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