Lessons from a rural hospital's victory over financial hardship: 2 execs weigh in

Leadville, Colo,-based St. Vincent Health was on the brink of bankruptcy and closure seven years ago. But in September, it opened a brand-new facility.

Leadville has the highest altitude in the U.S., snows nine months out of the year and has mountain driving on all roads leading to the city. Becker's spoke with Chief Branding Officer Karen Onderdonk and CEO Brett Antczak about the methods the rural hospital used to achieve this recovery and advice they have for others in similar communities.

Editor's note: Responses were lightly edited for style and clarity.

Question: What was the extent of St. Vincent's financial struggle seven years ago?

Karen Onderdonk: Our paramount struggles were with an aging facility (built in 1958) and tax support that had not seen an increase in mills since the hospital district was formed in the late 1980s. The hospital was no longer meeting the modern physical requirements for life-safety code, and part of the building was without heat.

The St. Vincent General Hospital District put a mill-levy increase on the Lake County ballot in 2014. The 2014 ballot initiative failed — and the SVGHD board announced the hospital would close — and then hired Centura to manage St. Vincent Hospital. We closed many services including home health, [extra care units] and physical therapy during this time and became very fiscally conservative.

In 2015, SVGHD went back to the voters with very clear messaging that the hospital would close if the district's mill levy (5a) did not pass. 

Ultimately, just under 60 percent of voters approved the increased mill levy on Nov. 3, 2015. This gave the district a stronger foundation to operate on and begin a financial turnaround while planning for a new hospital building.

Q: What strategies did the hospital implement to prevent bankruptcy and closure and bring it to where it is today?

KO: SVGHD contracted with Centura in 2015 to manage St. Vincent Hospital. They, and their appointed CEO, Gary Campbell, were instrumental in the turnaround that took place by concentrating on services that the community needed and were also revenue-producers — such as increasing inpatient nights, swing beds and reopening physical therapy services.

In the later part of 2017, the SVGHD board and Centura mutually decided to return to a less formal affiliate relationship. Mr. Campbell was hired by SVGHD, and the district has been independently managed since then. The hospital is now under the leadership of a new CEO, Brett Antczak, since November 2020.

Q: How were you financially able to build this new facility?

KO: The new hospital cost roughly $26 million. The majority of its financing came from a very favorable USDA loan with an interest rate of 2.35 percent. The principal and interest on the financing during the loan repayment period is estimated to be $1.6 million to $1.7 million annually. The loan term is 35 years. The remainder of the financing, approximately 20 percent, is from private funding sources.

There were two historic events that led to the hospital's 2019 groundbreaking:

  • Taxpayers voted to increase their support of both the hospital and ambulance service in 2015, and that investment has been foundational to the work and planning that has led to the new hospital's construction today.
  • Since 2016, the board of directors and leadership team have focused on increasing services and capacity for inpatient stays at St. Vincent Hospital, always endeavoring to improve local healthcare services for Lake County.

Q: What challenges did COVID-19 put on the hospital financially as you were trying to bounce back and build this facility?

KO: Our small hospital did not experience any service closures due to COVID-19. Our main challenges were the delays caused by COVID while constructing the new facility. These were both supply chain delays and manpower shortages among our construction vendors. A very real and challenging result of COVID is nursing shortages that have resulted from COVID exhaustion and lucrative traveling jobs available.

Q: What advice do you have for other hospital CEOs in rural communities experiencing financial stress?

Brett Antczak: My focus is always on removing barriers to healthcare. As a healthcare leader in a rural community I study out-migration data. We survey the community and stakeholders and act on closing the healthcare gaps we discover. The journey is to become the best healthcare partner possible for the community we serve.

I feel small hospitals must concentrate on the unique needs of their communities, the niche markets they can excel at and focus on adding "healthcare hospitality" to everything they do.

For instance, St. Vincent's inpatient rooms are private and inspired by resort amenities such as high-end linens, 55-inch TVs, large picture windows with mountain views and en suite-style bathrooms. This creates a healing environment that is comfortable. Patients judge you on what they understand, such as a beautiful room to recover and recuperate in.

We recently added many visiting specialists including general surgery — now people in our rural community can get their colonoscopies and other general procedures done without the hardship of driving out of town over our high mountain roads.

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