Montana Hospitals Facing Financial Crunch

Mar 26, 2020

Urban and rural hospitals in Montana are facing a severe financial crunch as they prepare for an uptick in patients with the COVID-19 illness. The economic stimulus plan approved by the U.S. Senate Wednesday night is expected to help.

Nicky Ouellet: Why are hospitals facing a financial crunch?

Rachel Cramer: To prepare for a surge of COVID-19 cases, hospitals in Montana and across the country have been postponing non-essential surgeries and outpatient clinic visits like colonoscopies and mammograms. This frees up hospital staff, beds and personal protective equipment we keep hearing about including masks, gloves and hospital gowns. It also reduces the number of people coming into hospitals, which helps slow the spread of the coronavirus.

NO: That sounds like a smart proactive step.

RC: Yes, but these operational changes are a double edged sword for hospitals. Non-essential surgeries and outpatient clinic visits are their main source of revenue. So without them, hospitals aren’t bringing in the same kind of cash they were just a few weeks ago.

Rich Rasmussen, President and CEO of the Montana Hospital Association, says all hospitals, whether they’re serving a frontier community or one of the state’s urban centers, are being stressed financially.

"So your larger facilities are losing revenue from surgery, and they’re losing revenue from making their beds available for a potential surge. That combined with what our critical access hospitals are struggling with, creates literally a financial tsunami for our state."

RC: I talked to hospital reps in Bozeman and White Sulphur Springs and both said they’ve seen a 50 percent drop in the number of patients on a daily basis. Rasmussen says that’s a big hit.

“Anecdotally, we've heard from hospital CEOs across the state that they believe hospitals collectively are losing about a million dollars a day.”

RC: Llew Jones, a state representative based in Conrad, said during a press call Monday that the financial crunch will hit a lot of smaller, rural hospitals harder than the state’s urban hospitals.

"A lot of our little critical access hospitals have less than 10 days cash on hand. So if you take, and I’ll use Glacier County as an example, them from 24 patient touches a day, down to four to six as they prep for this, they burn through their cash on hand, and soon they can’t retain operations."

RC: Bozeman Health Deaconess Hospital on the other hand, has over 200 cash days.

NO: So Rachel, I know Congress is working on a $2 trillion relief package. How is that supposed to help hospitals?

RC: It will help give hospitals a boost on their cash days and provide some additional preparedness dollars. It's also going to help pay for the treatment of COVID-19 patients and provide loan guarantees. I talked to Rob Brandt, the CEO of Mountain View Medical Center in White Sulphur Springs. He says the federal aid would help his critical access hospital maintain its reserves and continue operations.

"We definitely don’t want to dip into though, obviously, but it is something we’re definitely starting to monitor and watch. We can certainly weather the storm if it lasts up until May without making some major, major decisions, but if it continues past that, there’s potentially some hard decisions we’ll have to make."

NO: Is there other legislation that could provide relief, specifically to rural hospitals?

RC: Yes, there's the Immediate Relief for Rural Facilities and Providers Act, which is supported by Montana Senators Jon Tester and Steve Daines, and this would provide critical access hospitals and rural providers a thousand dollars per patient every day for three months. It would also help them make payroll, continue serving patients, especially those with cancer and other chronic diseases, and incentivize the transfer of patients in overwhelmed urban hospitals to open beds in rural hospitals.

NO: Why is there so much attention on rural hospitals? You'd think with a smaller population, there's a smaller need, right?

RC: Well, a study earlier this year from the Chartis Center for Rural Health found one in four hospitals in the U.S. is at risk of closing. Healthcare access is already a big burden for people who live in more remote areas so losing one of these facilities means people may have to drive hours and hours to get care, which is really problematic in a life-threatening situation. Again, here’s Rob Brandt with Mountain View Medical Center in White Sulphur Springs.

"We definitely have our place and we save lives every -- not every day because we don’t have the patient volume, but we certainly save lives often. And we’re very important to the communities that we operate in."

RC: He says rural hospitals are often a cornerstone in the communities where they’re based.

"We’re generally the largest employers, and we produce a lot of skilled positions, and so we’re extremely important to the vitality of each community that we reside in and operate business in."

RC: The study from Chartis Center for Rural Health found the biggest risk factor in the closure of rural hospitals in the U.S. is being in a state without Medicaid expansion. Montana has it. Wyoming doesn't.

The Montana Hospital Association Thursday afternoon announced all of the state's hospitals are endorsing the cancellation of elective procedures.