A $22.5 million infusion of federal coronavirus relief money should more than wipe out Greenwood Leflore Hospital’s losses this fiscal year.
Even though a multimillion-dollar surplus is a welcome change from the multimillion-dollar losses the publicly owned hospital has endured for the last few years, hospital officials caution that they will need the cushion to weather what they are anticipating to be several more months of financial challenges created by the COVID-19 pandemic.
On Tuesday, the administration released its monthly financial update during the meeting of the hospital board. It showed the hospital making a $4 million profit in May, thanks to $5.5 million from a second round of grants it received from the relief packages passed by Congress to help hospitals cope with the expense of treating COVID-19 patients and the revenue losses they suffered from going weeks without elective surgeries and other procedures.
June is expected to look even better, with the receipt last week of $14 million in relief funding targeted for “safety net hospitals” — that is, hospitals with a large share of Medicare and Medicaid patients and low profitability.
Combined with the $2.8 million of Coronavirus Aid, Relief, and Economic Security (CARES) Act funding received in April and a separate grant in May of $247,000 for coronavirus testing, total federal assistance related to the pandemic now exceeds $22.5 million for the Greenwood hospital.
The result is that the hospital’s deficit for the budget year that began Oct. 1 was halved in May, from $8 million to just under $4 million, and it should be completely erased this month.
That’s not the only good news coming from the latest financial report.
Though still well behind normal operations, the hospital saw a significant uptick in patient revenues in May, netting out at $7 million. That followed a dismal April, during which all but emergency care was postponed in order to preserve personal protection equipment and capacity for treating patients with the respiratory disease that has killed about 120,000 in the United States. Net patient revenues plunged to $3.6 million that month, down almost 60% from the year before.
Even though state restrictions on elective procedures have been lifted in phases since then, the Greenwood hospital is only able to operate at about 70% to 80% of its surgical capacity due to federal and state guidelines that require patients be separated so as to reduce the risk of transmitting the virus.
“You have to treat every surgical patient as if they’re COVID positive, even though they’re not,” said Gary Marchand, the interim CEO.
“The restraints are all safety guidelines. They’re for the benefit of not only the patient but our staff as well.”
When the pandemic reached Mississippi in March, Greenwood Leflore Hospital created a dedicated COVID-19 unit by transforming the hospital’s existing 16-bed intensive care unit, and moving the regular ICU to another part of the hospital.
The arrangement has since been flipped, and there’s now a permanent 14-bed COVID-19 unit outfitted on the hospital’s second floor that is sealed off from the regular ICU.
“We will not comingle COVID-19 patients with any of the other patient population,” Marchand said. “We are now structurally and operationally set to do exactly that.”
He said he believes the permanent unit, plus the ventilators and other equipment the hospital has acquired for treating COVID-19 patients, should position the facility well if a second surge in cases comes in the fall, as infectious disease experts are predicting. As of Tuesday morning, the unit was treating seven patients with COVID-19, including two who were on ventilators to help them breathe.
Marchand also said that the highly contagious virus, for which an effective vaccine is expected to be at least six months away, is causing the hospital to look at permanent changes in its visitation policy.
In March, the hospital imposed sweeping restrictions that barred most visitors and required those entering the hospital to be screened, including a check of their temperature. Although some of those restrictions could be relaxed in the future, Marchand said the community should not expect visitor access to return to its pre-pandemic level.
“Even as we ease the visitor restrictions, they are going to be tighter than what the community has historically been used to,” Marchand said.
“And you’re going to find that everywhere,” added Dawne Holmes, the hospital’s chief financial officer, suggesting reduced visitor access will be the trend in health-care facilities nationwide.
The hospital board on Tuesday also received the latest annual audit of its defined benefit pension plan.
The audit, which was performed by Harper, Rains, Knight & Company of Ridgeland, covered the year ending Sept. 30, 2019. It showed the fund continuing to make progress in reducing its unfunded liability — the amount, according to current projections, the fund is short of being able to meet all of its future obligations to retirees.
Once as high as $17.2 million, that figure has been reduced to $14.4 million, according to the audit, or 70% toward being fully funded.
“If you’re around 70% funding, that’s pretty strong,” Marchand said. “At 70% funding, if I was a pensioner in this plan, I would feel secure.”
Because of concerns over the rising cost of the defined benefit plan, the hospital froze it in 2012, allowing no new enrollments or contributions, and instead adopted a less generous and less expensive defined contribution plan.
• Contact Tim Kalich at 581-7243 or tkalich@gwcommonwealth.com.
