Struggling Lone Pine, Calif.-based Southern Inyo Healthcare District has seen significant financial improvements since Becker’s connected with its CEO Kevin Flanigan, MD, in late September.
“It’s a focus on a philosophy that it’s the system that’s delivering the results,” he said. “If you fix the system and don’t look for a scapegoat, this is always fixable.”
Southern Inyo has seen its fair share of financial ups and downs, having gone from eight days of cash on hand when Dr. Flanigan assumed leadership of the hospital, to 12 in late September and now 20.
The improvements have come through a number of cost-cutting measures. Dr. Flanigan told Becker’s Oct. 16 that voluntary self-furloughs from facility employees resulted in an approximately 20% reduction in payroll costs. The hospital also laid off around 6% of its workforce, which has not affected any ongoing services.
“We’ve had six vendors who collectively had almost $600,000 of invoices that were in arrears, all agree to an interest-free, 10-month payoff,” Dr. Flanigan said. “That all but eliminated my risk of a demand for immediate payment or legal action.”
Dr. Flanigan said improved operations have increased daily receipts by around 10%, bringing in around $800,000 to $1 million in additional revenue. The government of Inyo County, Calif., where the hospital is located, also agreed to advance the hospital $380,000 in due tax revenue. In addition, a $680,000 supplemental payment from the state is also expected the week of Oct. 20. Lastly, an insurance company in California agreed to advance $210,000 to the hospital against future projected payments, with a 24-month payoff.
“I’m optimistic that we can finalize a partnership and collaboration with the county for a loan that will then get us through the end of December,” he said. “Right now, projections show that we are about two weeks short of getting through December into January.”
Hospital leaders will meet with Inyo County officials Oct. 21 and a separate county government division at the end of October to discuss the hospital’s future, but Dr. Flanigan remains optimistic. He also hopes to eventually bring back the laid-off employees.
“First, I’m going to have to finalize and ensure good financial health of the facility,” he said. “Then, begin to see if we can reverse some of the voluntary furloughs, and then [decide whether] we can get to a status where we have grown in volume enough that we can put back in place those positions that were eliminated.”
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