Greenwood Leflore Hospital is now living on borrowed money.
The financially troubled hospital has exhausted all of its normal reserves, according to its latest financial report. It is now hoping there is enough left from a federal government loan to carry it until a larger hospital can be lined up to take over the 208-bed operation.
Gary Marchand, who on Tuesday became the hospital’s interim CEO for the second time since 2019, said he is confident the publicly owned hospital will keep its doors open until a lease can be finalized by the end of the year.
There is a possibility, though, that some additional services could be discontinued in the interim, he said.
In July, according to the financial statements released Tuesday at the hospital board’s monthly meeting, the hospital lost another $2.1 million. For the first 10 months of the current fiscal year, the losses have totaled $12.7 million, even after using $9.2 million in federal grants provided to help the hospital cope with the higher costs and reduced revenues attributed to the COVID-19 pandemic.
At the end of July, according to Dawne Holmes, the chief financial officer, the hospital had $3.2 million in reserves, not counting nearly $7 million in Medicare advance payments that have been socked away since 2020.
The $3.2 million, though, cannot presently be tapped. That’s because $2.7 million is reserved in a trust, as required by the state, for the hospital’s self-insured medical malpractice coverage. Another $740,000 is security against a bank loan for a capital improvement project that will be paid off in November.
That currently leaves just the balance of the Medicare advance payments for the hospital to draw on if costs exceed its operating revenues, which has been the case for several years.
Those Medicare advance payments, though, are a loan, which the hospital is presently having to pay back at the rate of about $1 million a month.
The payback schedule and the recurring losses would indicate that, without some dramatic changes, this last pot of money could be exhausted by October.
The worsening financial condition has prompted the hospital to advertise for bids on a long-term lease. The hospital is jointly owned by the city of Greenwood and Leflore County, and both the Greenwood City Council and the Leflore County Board of Supervisors unanimously supported the decision to seek an outside operator.
The deadline for bids to be submitted is Aug. 31.
Marchand said that at least one unnamed hospital system is actively working on a proposal. The University of Mississippi Medical Center has previously expressed interest in an affiliation and is believed to be currently interested as well.
Marchand, a veteran hospital administrator from the Gulf Coast, came out of retirement in 2019 to serve as interim CEO of the Greenwood hospital. He continued to work at the hospital on a part-time basis after Jason Studley was hired as CEO in 2020.
After Studley suddenly resigned last month, Marchand assumed many of Studley’s former duties but he wasn’t officially hired as interim CEO until Tuesday.
Marchand has been dealing this week with a major shutdown of the hospital caused by a clogged sewer line and its aftermath. Among the adjustments prompted by the situation, the hospital board held its monthly meeting Tuesday in a board room at The Alluvian hotel instead of at the hospital.
Marchand gave credit to others on the administrative team for capably handling the latest crisis.
“I really wish the community could have seen what they’re able to do,” he said. “It’s not my august, excellent leadership skills. I just did not get into anybody’s way.”
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
