Three Rivers Hospital faces aging infrastructure, low reimbursements, and dwindling cash reserves

BREWSTER—The Three Rivers Hospital (TRH) Board of Commissioners continues to consider the hospital’s future options as it addresses the challenges of an aging infrastructure, insufficient Medicare reimbursements, and low revenue reserves.

At its regular monthly board meeting on Wednesday, March 27, the board discussed bringing in a consulting firm, taking a second look at a new hospital design, meeting with hospital opponents, and meeting with the CEOs of the county’s three hospital districts.

In his report to the board, TRH CEO Scott Graham stressed the need for continued vigilance of both operations and finances as the hospital emerges from its low revenue months.

“Our cash on hand has taken a hit,” said Graham. “Partly due to low volumes, partly due to Medicare and the shenanigans they pull.”

He predicts that the revenue challenges will continue until Congress or Medicare enacts some changes.

One measure of hospital stability is its cash reserves, with a benchmark of 120 days’ worth as a margin of comfort. As of the board meeting, TRH has 13 days’ worth.

“We have to be willing to work harder, work smarter, be willing to do more with less,” Graham said. “We’ve got to build our cash reserves in order to have stability.”

Graham said TRH is not alone among rural hospitals struggling, citing figures from Becker’s Hospital Review.

“Right now, they are reporting 400 hospitals in rural America that are at risk of closure,” said Graham. “All hospitals need public support because the reimbursement for the hospitals has not been there.” 

TRH just inked a contract with Wipfli, a consulting firm, to review the clinic’s overall efficiency, productivity, and operations.

Two parallel initiatives - a resized building proposal and public engagement - are underway as proactive measures to improve the outlook in the months ahead.

One is to revisit the architectural plan to come up with a new resized proposal that will reduce the original $72 million cost to rebuild the existing facility. David Franklund of KDF Architecture will redesign a single-story structure on the existing site to pare about $10 million off the projected costs. Franklund will also look for a new site closer to the city that would meet the requirements for a new hospital.

The second was to engage with those in the community who have questions about or oppose a new building. Board Chair Mike Pruett arranged a meeting at the Winthrop Library between TRH representatives and hospital opponents to respond to their concerns. 

“One of the things we have talked about to the community is that our financial situation is not a result of bad management,” said Graham. “it’s the result of infrastructure and low payments.”

Graham also met with the Mid-Valley and North Valley CEOs to explore future collaboration and its potential.

“We have pretty well ruled out consolidating the districts as well as consolidating the hospitals,” said Graham, but that does not close the door to continued cooperation. “Collaborating is not the same as consolidation.”

Mike Maltais: 360-333-8483 or michael@ward.media