By Mary Alice Murphy

Silver City-Grant County Chamber of Commerce director Romeo Cruz welcomed everyone to the Zoom call on Nov. 4, 2021. It replaced the planned luncheon, due to an uptick in Covid-19 cases.

Scott Manis, Gila Regional Medical Center interim chief executive officer, said he wanted the presentation to be as interactive as possible. "Jump in and ask questions when you want to. I do have a hard stop at 1 p.m., as I will be holding a townhall with staff. I would love to have been in person, but we're all challenged a little bit these days."

He said his objective for the presentation was to show "where we've been, where we're going, things we've improved and the challenges we continue to have."

"I'll start with the challenges," Manis said. "Some are repeats, some are new." He noted that 136 rural hospitals have closed in the past 10 years. "GRMC would have been on the list of those in danger of closing. Forty-seven hospitals in the U.S. closed. in 2020, when the country set a high in the number of closures. Financial issues were the leading cause. When you drill down into Gila Regional, there was a lot of red on the balance sheet from 2013-2020, when a total of $47 million was lost. How could it stay open? It depleted all its cash reserves, and it was not refilling those reserves. We weren't reinvesting in the hospital or its equipment, while depleting the cash reserves. The Grant County Commission said, because the county owns the hospital, they had to make changes. They brought in HealthTechS3 in 2020 to begin the recovery. In March 2020, the hospital had nine days of cash on hand. I arrived in May 2020. The hospital was in dire condition. We made changes across the hospital."

Manis said the hospital is part of the community. "We are the lion's share of the county's revenue. Our portion is about $70 million annually. We were threatening to drag down the county bond rating. In May of last year, we identified $12 million of estimated, targeted improvements. We presented the facts. Through the year-to-date, we made up $20 million. We lost $19 million last fiscal year. By the end of this fiscal year on June 30, 2021, we were $5 million in the black. We have been very disciplined about labor management. We did, unfortunately, do lay-offs and closed the revenue losing behavioral health unit. Achieving the critical access hospital designation was crucial to our recovery. With the designation, the hospital receives higher reimbursements from Medicare. As a PPS (prospective payment system, in which Medicare pays fixed amounts, the hospital was licensed as a 62-bed facility, although it never had more than about 25 beds filled. The hospital had talked about going critical access for years but had never executed it. The designation alone probably represents more than 50 percent and maybe as much as 70 percent of the financial improvement. The control of expense variation has also been a part of the improvement."

Manis noted the hospital-owned clinic had also received the rural health clinic designation, which also increased the reimbursement rates. "In addition, when Covid-19 hit, we applied for a federal $6 million PPP (paycheck protection program) loan, which because we used it to keep our staff paid, was forgiven. We also got a Medicare $6.2 million advance, as well as other Medicare advances, which we continue to pay back and should complete payments by late next April or early May. If we had not received the $19.2 million total infusion, the hospital would not have survived. It gave us a great runway toward the financial turnaround."

On the expense variation, he showed a graph that showed how variable revenues and expenses were, with one standard deviation accounting for about $600,000 month to month. "We brought the expense variation down by 50 percent, which makes it more reliable and sustainable."

Bruce Ashburn, chamber board member, asked what the hospital's experience has been with mono-clonal antibodies, for instance. "Are you waiting for reimbursements?"

Manis said some hospitals could face challenges on that front, but "because we are critical access, the reimbursement is tied to our cost report, so we are not seeing dips as much as larger hospitals might see. We get paid by Medicare for 102 percent of our costs."

He noted that the fiscal year 2021 results, although not yet audited, show a net surplus of $5.652 million at the end of the fiscal year, which ended June 30, 2021. "In 2020, for every dollar we earned, we spent $1.31. In 2021, for every dollar we spent, we had 8 cents left over. We are ahead of our budget projections. For our current year-to-date, we had had a surplus in July and August, but we had a $400,000 loss in September. We will have our ups and downs. Our cash position right now is 95 days of cash on hand, for about $17 million. We need to get to six months-worth of cash on hand. Our accounts payable average $1.75 million. In May 2020, we owed $9 million. People were calling a lot wondering when they would get paid. Now we're keeping up with our accounts payable."

Ashburn said: "In my opinion, this hospital is so important to us, for economic development, as well as quality of life. However, I question whether an equipment heavy facility can rely on the 8 cents left over. What is the long-term prognosis and being able to offer services at the same time?"

Manis said the hospital is a 38-year-old facility. "Our projections include funding of capital improvements. We have growth opportunities here, with our patient load being mostly outpatient, imaging, rebuilding the cancer program, and seeking grant funding for equipment replacements. On our own, we need to take one step forward at a time."

Ashburn said: "But we cannot afford to go above 25 beds."

Manis agreed and said: "But Gila Regional is in reality a larger hospital with 25 available beds. We have two orthopedists, three general surgeons, two OB/GYNs. This alone will keep us sustainable. A budget of $70 million puts us among the larger critical access hospitals. Some of them have tax districts supporting them. I am not advocating a tax district."

Ashburn thanked Manis for being transparent.

Manis said: "I've been pouring my life into this hospital for the past year and a half. I can't help but be cheering this hospital on. Yes, we closed the ICU (intensive care unit) because of staffing shortages. We got to the point where, with staffing challenges across the country, in nursing in particular, we didn't have enough nursing staff to provide the quality care we expect. We had to make the tough decision to close it, but our plan is to reopen it as soon as we can, contingent on staffing. Our hope is that within the next four weeks, we hope to have it open again. In the meantime, the patients we can take care of here, we keep, but unfortunately, we are having to transfer others to the most available and to the one with the next most capability to take care of the patient."

He moved on to patient experience. "Covid has impacted us financially and also in experience. I've seen positive and negative perceptions of care. A considerable number of the neutral and negative comments in 2020 were related to Covid and family visitation restrictions."

Manis said challenges for Gila Regional include the fact that the hospital is reliant on federal and state funding sources, which are not very reliable. "70 percent of our revenue is from Medicare/Medicaid. We are looking at the recovery of volumes post-Covid. Our growth is getting back to where we were a couple of years ago. We are here to serve the community. Another challenge is hardwiring our improvements, so they remain in place. The county commissioners don't intend to serve as governing board members forever, so we will have to transition to a new governing board. We will soon be transitioning to a new operating leadership with the new permanent CEO coming on board. We are also looking for a new CFO (chief financial officer). We want growth in high-margin outpatient services. We also want to improve the community perception of the hospital. We take your comments seriously. The workforce challenges are now challenging everything, so that everything is in the mix of every other hospital and clinic. We do have a handful of nurses graduating from Western New Mexico University in December who have committed to Gila Regional. It is a long process, though, for them to become fully active nurses."

Other timely matters include the Covid vaccine mandate. "We are almost there, with about 87 percent vaccinated. However, we have lost some good and committed staff members who have chosen not to be vaccinated."

"Our strategic planning will be in full force in January and February," Manis said. "The CEO transition will take some time, which I have committed to. We need to address community care avenues for behavioral health issues. We are working with the county and others on this issue. At this point, those with behavioral health needs are usually transferred to another facility. On our emergency department throughput, we ask for your patience. They are doing all they can to take care of community members. I ask you to support your local hospital. Our quality indicators are much better than the Las Cruces hospitals. Give grace to our staff, who are working night and day. Local citizens have been bringing snacks not only to the day staff, but the night shift folks. They are highly appreciated. More people are doing nice things. The signs that appeared in the hospital yard were great. We have been working on external communications."

Ashburn asked Manis to plant a seed to have a hospital representative on the chamber board.

"I've been remiss by not participating on the board," Manis agreed. "Yes, we need to participate."

Cruz thanked Manis for taking time to speak to the members. "The messaging you are putting out is wonderful. Please call on us for any way we can support you."

Cari Lemon, chamber member representing Western Bank, said she appreciated the transparency, which builds the trust factor with the community.

Manis said: "This is the community's hospital. Without the community, we wouldn't be here."

Cruz announced two new chamber members, the Lulu Hotel and Grant County Pest Control. Two ribbon cuttings have taken place for Buddy's Home Furniture and the opening of a new Edward Jones office by Vladimir Gnilozubov.

Cruz also pointed out that funds are available for coronavirus relief and expansion to businesses through www.sba.gov.

Steve Chavira, director of the Grant County Workforce and Economic Development Alliance said Alfred Ogas had asked him to mention the 80th anniversary of the Bataan Death March, which will be commemorated in a re-dedication of the Bataan Memorial at Bataan Park on April 9, 2022. Chavira also reminded people of the Dec. 2 hybrid version of the annual Prospectors Legislative Forum to allow local entities to promote their needs for capital outlay. He noted the capital outlay process has changed, with requests needing to be presented prior to the legislative session. He also noted that the Grant County Community Health Council is putting out new messaging.

Cruz said the chamber newsletter has a lot of information sent out regularly to members.