Oregon hospitals need transfusion of cash, stat

Coronavirus

Oregon's 62 hospitals got $425 million in federal aid

PORTLAND, Ore. (KOIN) — Dennis Burke is the CEO of the Good Shepherd Health Care System, which runs “the only hospital in Hermiston.” Like every other rural hospital in the Pacific Northwest, they’re facing financial turmoil after non-emergency medical procedures were limited in the pandemic.

His hospital is better off than others but he said there “are many hospitals, I can’t name them, but there are many rural hospitals wondering where the dollars are coming from to meet payroll.”

Oregon’s 62 hospitals split $425 million in emergency funding from the federal government. While that may sound like a lot, it really isn’t.

“We did not get as much money as we expected and it is not enough to tide us over,” said Becky Hultberg, the President/CEO of the Oregon Association of Hospitals and Health Systems.

She said Oregon got the 49th-most amount of CARES Act money per capita even though the state has the 27th highest population.

“We’re not exactly sure why,” she told KOIN 6 News. “That had to do with the federal government allocation method.”

Hultberg thinks the federal government may have given a funding advantage to larger, commercial hospitals in other states and Oregon was penalized for having a higher percentage of Medicare and Medicaid beneficiaries.

Washington hospitals are in a similar situation. Washington ranked just ahead of Oregon at 48th in CARES Act money per capita, while having the 13th highest population.

“Generally, Washington does poorly in these kinds of formulas, which favor states with higher Medicare expenses,” said Beth Zborowski of the Washington State Hospital Association. “It’s a bit of a penalty for efficiency, which is unfortunate when we were the first state hit and have been operating with the increased expenses and constrained revenues for longer than state’s who have received a larger share of the dollars.”

Weeks ago, Oregon hospitals went to the state asking for a $200 million lifeline. But in April, the Oregon legislature discussed a much lower amount.

“The money that is being authorized here is the single largest authorization we would make today at $50 million,” Speaker of the House Tina Kotek said during that session.

Lawmakers debated whether the money from the federal government should be passed down to hospitals as grants or as loans. But some lawmakers told others the struggling hospitals couldn’t afford to pay back loans.

“I fully support the program only as a grant,” Sen. Lynn Findley (R-Vale) said. “We’re converting a grant given to the state of Oregon to a loan program. I think that seems highly suspicious.”

Kotek said she believes hospitals are having financial difficulty but that’s not enough.

“No one has audited their books, no one has looked at their books, no one has a sense of their reserves, no one has a sense of when their cash flow will return based on elective surgeries. So we would be saying, ‘trust us’ give us a lot more money because we say we’re in distress. Well, frankly, everyone is in distress right now.”

In the end, lawmakers tabled the motion. Both Democrats and Republicans voted to delay the issue and hope that federal dollars would be enough, combined with income hospitals will receive after being allowed to do more non-emergencies procedures.

Good Shepherd Health Care System in Hermiston, as seen on their website May 27, 2020

Burke, the CEO of the Good Shepherd Health Care System, said he didn’t know the lawmakers don’t have the issue scheduled to even talk about. “That would be somewhat frustrating.”

Hultberg said it’s “important that people understand the magnitude of losses at hospitals, because of the assumption that hospitals are always able to be there. This is a different type of recession than we’ve had in the past and hospitals are not immune from severe financial distress.”

Hultberg said Oregon hospitals lost $13 million per day in April. Her organization projects Oregon hospitals will lose $645 million in May, June and August.

And she added, “In a pandemic is not the time to have your hospitals under financial stress.”

In a statement to KOIN 6 News, Kotek’s office said: “Back in April, the Emergency Board was prepared to dedicate $50 million in federal dollars to a loan program for stabilizing the operations of small, rural hospitals, but the motion was tabled after hospitals objected to the terms of a zero-interest or low-interest state loan program. This program would have been in addition to the hundreds of millions of dollars paid out to hospitals by the federal government directly since the pandemic started. The Speaker’s first priority for using flexible federal relief dollars is to ensure families and small businesses are supported and Oregon can safely reopen.”

Requests for comment from Gov. Kate Brown’s office went unanswered and Senate President Peter Courtney declined to talk.

Continuing Coverage: Coronavirus

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