The annual Tyrone Hospital Corporation board meeting was held Monday amid a challenging time for the facility.
Tyrone Hospital is facing financial issues including dealing with operating losses of $2.2 million and total losses of $3.9 for the fiscal year that ended in June. It is also dealing with the ramifications of a $4 million plus jury award handed down earlier this year against the hospital and a doctor. The $3.9 million figure factors in the hospital’s costs associated with the jury award.
Amid that background, board president Judith Norris said the hospital has set a number of goals. She said the goals include maintaining an acute care facility with an emergency room, bringing in additional staff, maintaining a commitment to quality patient care, continuing its commitment to its employees and continuing its charitable mission.
“That hopefully is the goal of this board to do that, so we have to look at all options,” said Norris.
According to a hospital press release, Norris noted the hospital achieved some significant goals but also continued to wrestle with some challenges that have contributed to a financial slide in recent years. Norris said hospital leaders are implementing a very structured plan to help the hospital regain its footing.
“The board, administration, physicians, and key personnel have worked together with consultants to develop a strategic plan,” said Norris. “We have also conducted community surveys, interviews, and gathered information from patient questionnaires.”
Among those options the hospital is looking at the possibility of a merger or a reorganizational Chapter 11 bankruptcy.
Last night, Tyrone Hospital officials met with representatives of Altoona Regional Medical Center. Norris said it was a first session where representatives from both hospitals met for “a general discussion” to see if there was “anything we could do collaboratively.” She said nothing substantial came out of the meeting and no additional meeting had been set as of now.
“Since Altoona has a strong presence in Tyrone’s market area it is quite logical for us to make that contact,” said Norris in the hospital’s press release.
Tyrone hospital officials indicated they were also open to discussions with other interested parties.
“We have a fine group of people working to keep this hospital in our community, employees, physicians, volunteers, development council, and hospital auxiliary members,” said Norris. “However, sometimes it takes more.”
As far as the bankruptcy option, the hospital’s CEO Walter Van Dyke had mentioned the possibility of Chapter 11 bankruptcy in early March as an option if the facility can’t find relief from the jury award in the legal system. Hosptial spokesperson Theresa Yanchetz said yesterday that no decision on bankruptcy has been made yet. Under a Chapter 11 bankruptcy, the hospital could repay its debts over time and continue to operate.
In the hospital’s press release, Van Dyke was quoted as saying, “We are working with an attorney to see if this would be in our best interest at this juncture. We will make a decision in the near future.”
In an overview of the hospital’s performance George Berger, Chief Financial Officer reported that the hospital has been operating at a loss for a few years but has been able to cut its losses significantly through accomplishments that were outlined by Van Dyke at the board meeting.
“We have made progress but there are still some things pressuring us and holding us back” said Mr. Berger.
The hospital’s press release said patient admissions, surgeries and emergency room visits have all declined, while the portion of the hospital’s patients that are covered by Medicaid, an insurance program that pays very little, has increased.
“Our costs are low compared to other critical access hospitals in Pennsylvania, said Berger. “But we lack the volume of patients that would be needed to pull us out of our financial slide.”
Van Dyke said the hospital is also faced with paying $3.5 million of the $4.5 jury award in a case involving the birth of a boy at the hospital in the mid 1990s.
Van Dyke noted the hospital has been drawing on its reserves to fund the losses it has experienced in recent years.
“We can no longer squeeze our reserves,” said Van Dyke. “We have to look at other actions to reverse this trend. There are a number of things we need to do strategically.”
He noted a need for additional physicians to help build the hospital’s volume.
“We also need to develop a relationship with another health provider,” said Van Dyke. “A relationship with another health provider will position Tyrone Hospital to better meet community needs both now and in the future and will support our financial turnaround efforts.”
In his report to the hospital’s coporation board, Van Dyke said recent accomplishments noted:
• recruitment of a surgeon and an emergency room physician;
• ongoing aggressive cost containment;
• converted to a critical access hospital which provides more favorable reimbursement for care provided to Medicare patient developed a swing bed program which allows patients who no longer need acute care, who meet certain criteria, to remain at the hospital for short term rehabilitation;
• developed a relationship with ProCare to upgrade its rehabilitation services;
• discontinued a contract with Quorum Health Resources for management services;
• closed its obstetrics services;
• renegotiation of a blue cross contract;
• reduced accounts receivable days to 55 and
• developed the Keystone Headache and Pain Management Center.
