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After Rushing To COVID Prep, State's Rural Hospitals Face Looming Financial Concerns

Photo of three people wearing face masks and standing in front of a tent
Moab Regional Hospital
Moab Regional Hospital is running about 10 COVID-19 tests per day, but as it prepares for a potential surge in cases, overall hospital revenue is down 25%, according to CEO Jennifer Sadoff.

Despite the growing need for health care in response to the coronavirus pandemic, hospitals, along with almost every industry in the country, have been hit economically. As they’ve geared up for a potential surge in coronavirus patients, major revenue sources have started drying up. 

The cuts affect most hospitals In Utah, but hit the state’s small, community hospitals hardest, said Greg Rosenvall, rural hospital development director for the Utah Hospital Association. For them, elective surgeries and outpatient services aren’t just profit centers but financial bottom lines. Both have been halted as more patients stay home on top of a statewide order to suspend non-urgent procedures.

Thankfully, he said, the anticipated spike has not yet come. Most of the state’s cases so far have concentrated in more urban areas, such as Salt Lake and heavily trafficked parts of Summit County. But it still leaves those rural hospitals in limbo as they wait and see what’s ahead. 

“To this point it's just been all about [coronavirus] response,” Rosenvall said. “So the finances will start to sink in pretty rapidly if this prolongs a while.”

Rosenvall said there are 21 rural hospitals within UHA alone, though most belong to larger companies, including nine owned by the state’s largest health care provider, Intermountain Healthcare. But nine others are independently-run and those are the ones to worry about, he said.

Moab Regional Hospital is one of them, and at this time of year it’s normally flooded with tourists.

“Usually we're collecting pins on the map in our E.R. — we call it our biff board,” said CEO Jennifer Sadoff. “So if somebody wrecks while they're mountain biking, they come into our E.R., we put a pin on the board. And this is a prime time for us gathering a lot of pins.”

It's also primetime for generating revenue. Sadoff said she anticipates the hospital taking at least a 25% hit because of the forced slowdown. That may not be crippling to a big hospital, but for Moab Regional it’s a big deal.

“It puts us very, very much in the red,” she said. 

In central Utah, Gunnison Valley Hospital is also feeling the squeeze. Inpatient registrations have dropped 87% compared to this time last year and total charges are down 60%, CEO Mark Dalley said. 

None of the hospital’s 200 employees will be laid off, he said, but they are facing fewer hours and being offered expanded leave options. 

Dalley said his hospital has built up strong cash reserves over the last decade though, in part through its focus on a limited amount of services, so it can sustain itself through the next few months. 

“We've just been fortunate to be relatively busy for a small hospital and we are not the least bit extravagant in what we do,“ he said. 

Sadoff said Moab Regional also has cash on hand thanks to the area’s usual influx of tourists. She does not expect to lay off or furlough any employees, but is trying to cut costs wherever possible. The hospital is also looking into paycheck protection loans offered to small businesses as part of the $2 trillion Federal CARES Act. The loans can be forgiven if employees are kept on payroll. 

But many questions remain with the federal program, such as when money will come and how much is up for grabs. Rosenvall said he hopes to know what Utah’s rural hospitals qualify for within the month, but there are no guarantees. There are also additional concerns over fine print in the legislation that might make some small hospitals ineligible for funds.

For now, all they can do is stay prepared. 

“I think if it gets under control in three or four months, we'll be okay,” Dalley said. “If this goes on for six or eight months, I honestly don't know.”

Jon Reed is a reporter for KUER. Follow him on Twitter @reedathonjon

Jon reports on quality of life issues, education and the economy
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