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Lewis County hospital seeks solutions to fiscal problems

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LOWVILLE — Lewis County General Hospital officials are seeking short- and long-term solutions to the facility’s fiscal woes.

“We have to find any way we can to reduce expenses due to rising pension costs,” said Eric R. Burch, the county-owned hospital’s CEO.

The facility, which employs more than 400 people, has ceased recruitment efforts for physicians, aside from a needed orthopedic surgeon, and is limiting new hires to positions that show revenue-generation potential, he said.

While no job cuts are imminent, hospital officials will evaluate all services to determine whether they are still warranted, Mr. Burch said.

“If there’s the potential to reduce, we will,” he said.

However, Mr. Burch said, any cuts must not harm revenue or patient care and services.

A dialysis center project remains in the works, but hospital and county officials are seeking grant funding to make it more feasible, Mr. Burch said. The county is exploring the possibility of transferring a $928,038 state HEAL NY grant awarded in 2010 for mental health upgrades to the dialysis project and also is applying for funds through the regional economic development council, he said.

The hospital this year has had an operating deficit of about $130,000 per month, Mr. Burch said. If that trend continues, the hospital will be $1.5 million in the red by the year’s end.

On top of that, the facility owes the county more than $5.5 million, plus 4 percent interest, for ongoing loans to help cover costs of employee pensions and insurance, unemployment, workers’ compensation and capital equipment. That debt included $2.87 million borrowed in December to cover more than half of the hospital’s $4.27 million pension payment.

As with other public hospitals and municipalities, pension costs at Lewis County General Hospital are skyrocketing, going from $1.6 million in December 2009 to a projected $4.8 million this December.

While inpatient admissions have remained steady over the past decade, a 2009 change in reimbursement by Medicaid and private insurers has cost the facility about $1.4 million annually, Mr. Burch said.

Of the 2,380 admissions in 2011, 354 fell into the relatively new observation category, meaning they stayed for only one day or less, he said.

In those cases, the hospital now receives $1,000, rather than $5,000 for a regular admission, even though all of the upfront costs are the same, Mr. Burch said.

County officials are concerned that ongoing hospital borrowing could drain the fund balance, particularly if the county has to float this year’s entire pension payment. The county reserve fund was at $8.4 million as of July 1.

“We’re more than nervous, I guess, because we can’t go bankrupt,” County Manager David H. Pendergast said Friday at a joint meeting of legislators and hospital managers.

Draining the fund balance too heavily likely would require the county to implement a significant property tax hike, Mr. Pendergast said.

Hospital officials plan to earmark certain Medicaid reimbursements and intergovernmental transfer funding, intended to reimburse health care facilities partially for losses incurred on Medicaid, uninsured and charity care patients, for repayments to the county.

That roughly $8 million, if it all comes through before the end of the year, would keep the fund balance stable, but reserves essentially could be drained if none were to come in, county officials project.

While it is hard to predict when those payments will be made, Mr. Burch said he is fairly confident at least half of the money will be forthcoming this year.

The hospital administrator said he also is looking for ways to reduce the burden of state retirement system payments on the facility, but any possible changes, if implemented, likely would take a couple of years to result in significant savings.

“Hopefully, we can turn the performance around,” Mr. Burch said. “But I don’t think we can just sit and wait and hope the volume goes up.”

Because of the hospital’s condition, county leaders last month forgave a $2.8 million debt for repayment of retiree health insurance premiums, which hospital officials had offered to repay a couple of years ago.

County leaders now are exploring the idea of borrowing money for hospital operations, possibly through the formation of a local development corporation to handle the debt to keep the fund balance at a stronger level.

“It buys time for them to get their house in order,” county attorney Richard J. Graham said.

Lawmakers are expected to discuss that idea further at their 8:30 a.m. meeting today.

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