Southwest Healthcare asks county for $1 million amid financial woes

Southwest Healthcare Interim CEO John Osse, along with CFO Sasha Ruggles and five board members, requested $1 million from the county at the July 18 Bowman County Commission meeting. An estimate done by the accounting firm Eide Bailey of what it would take to get the facility “over the hump” amounted to $993,000. Osse said that that number is less than the anticipated loss for this year.

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The request comes less than a week after Bowman City Hall was filled with community members during an invite-only meeting with the board and Osse. The meeting was intended to update various city leaders and business owners about the current financial situation the medical facility is facing.

Prior to the commission meeting, the commissioners were each sent a letter from Southwest Healthcare, though the Pioneer was not privy to the contents of the letter.

Osse began the request by presenting the commission with the actions he and the board have already taken to cut costs. One of the measures Osse and the board have taken is cutting staff, something Osse said is the toughest part of his job.

“In the last four weeks, we have made some significant staff reductions, and that’s the toughest part of the job,” he said.

Overall, the facility has relieved 10 people of their duties, and cut an additional 732 hours, which according to Osse, is equivalent to 18 staff members. He told the commission that these cuts amount to $424,000 when prorated out for the remainder of the year.

Osse said he and the board have also installed a new purchasing system, which Osse enforces. The new system includes utilizing certain vendors to take advantage of rebates for repeat business.

A third thing the board and Osse has been able to accomplish is the recruitment of two physicians, which will allow the hospital to end the contract that has supplied the facility with traveling doctors.

“This is major,” Osse said.

Dr. Matthew Feller, who had been at Southwest Healthcare as a traveling doctor, signed a contract on Friday, July 7, and will be serving patients three weeks out of every month.

A familiar face is also returning to the area.

Dr. Forrest Lanchbury has agreed to come back and fill in for one week a month, when Feller is not on the schedule.

Dr. Paul Swisher, who has also spent time in Bowman, has agreed to fill in coverage gaps as needed.

Southwest Healthcare had been using contract doctors since late 2015, early 2016, when all three of the permanent physicians left in the span of a few months, including Lanchbury.

Osse said that that contract is very expensive; telling the commissioners that they spent $1.3 million last year, a figure he said is not unusual in this type of agreement.

They will still continue to recruit another physician, having signed a contract with the recruiting company Jackson & Coker, but Osse classified it as a backup option because it is going to take time, he said.

“We’ll see how that goes,” he said to the commission.

The clinic will also start a marketing campaign, with the hope of attracting more local patients.

“We will bring in the physicians, we have a well trained staff, and hopefully people will come home,” Osse said. “We’re not going to take that for granted.”

He also informed the commission that he has a meeting scheduled with West River Health Services CEO Matthew Shahan to see if there is an opportunity for a partnership.

As Osse pled the hospital’s case to the county commission, he had a sense of optimism as he talked about what 2018 might look like. With the changes made to staffing, and the recruitment of the physicians and the revenue they are projected to generate, Eide Bailey estimated that Southwest Healthcare would be in the black to the tune of more than $1 million.

“I’m not going to stand here and tell you we’re going to make $1 million next year, I don’t know,” he said to the commission. “At the minimum if it’s half that, if it’s a quarter of that, that would be wonderful, that would be absolutely wonderful.”

He added that if the facility broke even, Southwest Healthcare would be in the 90th percentile of rural hospitals. Osse felt confident in the plan that’s been put in place, and said that he wouldn’t have come before the commission had he not believed it could succeed, and many board members said they wouldn’t have wanted to ask for financial help, had they too not believed in the plan.

“Without an action plan for financial recovery, we know it would have been a futile effort to even come here today to to talk to you guys,” board president Gary Brennan said. “If we couldn’t look you square in the face and tell you we have a plan in place to fix this thing, we never would have come and ask for the money.”

“So that’s a lot of money,” Osse said. “But I don’t have to tell you what the impact of this hospital has in the community.”

Commissioner Lynn Brackel seemed to be supportive of the request, saying that if it came down to it, the commission may be able to find money for the hospital. But he did voice his concern that they might come back for more requests down the road.

Osse and some board members acknowledged that concern, but tried to ease the situation by again citing the changes they’ve already made and that they are confident in the plan.

Commissioner Jerry Jeffers said it’s kind of a catch-22 situation.

“We’re going to put a burden on our taxpayers, obviously somewhere along the lines,” Jeffers said. “But if we don’t have [the hospital] and we take 175 jobs away we’re putting the burden on the taxpayers to, see it’s a catch-22.”

Osse pointed out, too, that it’s not just the hospital that’s in a financial strain, and said that if it closed he couldn’t say whether or not the nursing home would close with it, saying that the two are “intertwined.”

“We’re not just talking about the hospital…we’re talking about the system,” he said.

The commission didn’t give the hospital an answer. Commissioner Ken Steiner told the Pioneer that they didn’t adjourn the meeting but went into recess until Tuesday, at 8 a.m. when they will meet again. Steiner said it wasn’t unusual to hold smaller meetings during this time of the year when they are trying to work out budget issues.

When asked if it would be a loan, or just funding, Steiner thought the request was asked as a matter of funding.

“I suspect they thought it would be just funding, and we don’t know how we’re looking at it yet,” he said.

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