When Kevin Flanigan, MD, began his new role as CEO of Lone Pine, Calif.-based Southern Inyo Healthcare District on Aug. 18, the hospital had just eight days of cash on hand. As of Sept. 25, cash on hand for the hospital had increased to 12 days.
“On any given day, it can drop down to two or three days of cash on hand,” Dr, Flanigan told Becker’s. “Payroll is going out, and it will be back down as soon as that goes out the door.”
Dr. Flanigan said it takes just over nine days of cash on hand to make payroll. While the 37-bed critical access hospital brings in enough revenue to cover payroll, that must expand to total labor cost, which includes salary and hourly staff, contracted providers, and vendors like food and medical supplies.
“Staff have been paid,” Dr. Flanigan said. “I will acknowledge that I was a couple of days late getting the payroll taxes out. We’ve already paid for this most recently closed pay cycle, but I can’t project out to the first pay cycle in October.”
Dr. Flanigan said hospital employees have voluntarily furloughed their hours, which he estimates will save $75,000 to $100,000 in payroll costs.
“[Employees] come to work and they have a great attitude,” he said. “How do you not use that as motivation to figure it out? I have to. I have to do this for these people. I’ve worked in a lot of great places, but I can’t think of a single place that I have worked where this would have been the employee’s response.”
Dr. Flanigan said saving the hospital came down to two things: time and money. Local leaders have requested $3 million from the state to help support the hospital, but the county it serves has also offered $700,000 to $800,000 to the facility, contingent upon the state making up the difference between the funds and the $3 million needed.
The hospital’s other option is to temporarily suspend its emergency department and acute care services, allowing for its skilled nursing facility and rural health clinic to maintain operations. In January, the hospital will receive a $2 million supplemental payment, which Dr. Flanigan said he can use to reoperationalize any paused services.
Dr. Flanigan also welcomed the possibility to tap into the $50 billion Rural Health Transformation Program, part of the One Big Beautiful Bill Act. However, the funding goes through the states, not hospitals, and will not be ready in time.
Should neither case nor time be provided to Southern Inyo, Dr. Flanigan fears the worst.
“In absence of either one, I’m going to have to give a 30-day notice to my long-term care patients by mid-October,” he said.
Dr. Flanigan added that Southern Inyo is not alone in its struggle. On a national level, Becker’s has reported on 22 hospital closures in 2025.
In California, Willows-based Glenn Medical Center has fast-tracked the planned closure of its emergency department to Sept. 30 due to staffing shortages. The 25-bed hospital is also set to close Oct. 21.
Blythe, Calif.-based Palo Verde Hospital is also struggling financially. In mid-July, the hospital was granted the authority to file a Chapter 9 bankruptcy petition should it become necessary. On Sept. 25, the Riverside Local Agency Formation Commission held a meeting to discuss the future of the hospital and voted to begin dissolving the Palo Verde Healthcare District and seek state support to restore services at the hospital.
“Across the nation, we’re not unique,” Dr. Flanigan said. “There are critical access hospitals across the country that are in the same physical problem we are, and they don’t serve such tourist attraction areas. You can’t hit maximum efficiency on the volumes that we serve.”
Looking ahead, Dr. Flanigan said that relief could be in sight if the hospital can survive the next two years.
“If I can get to 2026, I’m good. By 2027, those supplemental payments will increase to the point that I’m actually looking at the potential for a positive operating margin,” he said.. “The light at the end of the tunnel is an opening at the end of the tunnel, and not a train. I just need the locomotive to get me there.”
