WCHS struggles with finances

Alexis Barker
NLJ News Editor
 
Weston County Health Services has begun looking at ways to cut spending after increases in operating expenses coupled with decrease in cash flow have put the facility into financial strain, according to CEO Maureen Cadwell. 
“This is something we have been watching very closely for a while. It is something we need to step in and make sure we are doing the right thing to make sure the facility is viable going into the future,” Cadwell said. “My main goal is to cut money but not quality.” 
During the Oct. 17 board of trustees’ meeting, trustees had a
long discussion about cash flow, Cadwell said. 
“When you look at the actual cash we get, it doesn’t look that bad on the income statement, but when you pull out the cash and what we spend, it is a different story,” she said. 
To provide the board with a better look at the facility’s financial status, Cadwell created a cash flow plan that breaks down cash received, payroll and benefit costs, other expenses and nonexpense payments for the past year, providing a clear picture of total cash consumption compared with revenue each month.
Cadwell said she also included outstanding accounts payable (what they owe to other companies for services), net receivables (the total money owed to Weston County Health Services for services), the biggest operating expense increases, areas of cash decrease, potential items to cut and needs of the facility. 
Aiding in the financial strain, according to Cadwell, are expenses related to bringing in temporary staff, an increase in retail pharmacy drug purchases and the transition to EPIC, the electronic records system. The facility has also seen Medicare rates reduced, a significant payback to Medicare, more self-pay patients and a slower return of funds due to the switch in records systems. 
“We have been seeing an increase each year in self-pay, and it has reached a new higher level,” Cadwell said. 
Money owed for services totals $4,964,537.25, with nearly half of that categorized as self-pay, she said.
“We are seeing a huge increase in self-pay patients and that is really greatly affecting what we can do,” Cadwell said
Of the total owed to WCHS, $2,447,127.56 is owed by self-pay patients. 
With the hopes of getting those bills paid, Cadwell said, the facility will begin working with First Pay Solutions, of Greeley, Colorado. The company will charge WCHS 6% of all funds collected. 
“We have also seen a loss of $1.5 to $2 million from Medicare alone through our payback to them and a
decrease in reimbursement,” Cadwell said. 
The payback, Cadwell explained, is similar to a tax return. She said that the facility pays in so much to Medicare throughout the year and “hopes they are paying enough.” At the end of the year, an annual report reveals any imbalance. This year, the report showed that the facility had to return $930,558 to Medicare. 
According to Cadwell, this statement also changes the reimbursement rate moving forward. 
“Then our reimbursement was lowered, and we can’t know the impact of that until the cost report is done because there are so many things that are a part of that report,” Cadwell said. 
Overall, from July of 2018 to September of 2019, the facility brought in $26,732,895.23 in cash, paid out $13,544,859 in payroll and benefits, paid out $9,769,040 in other expenses and had $2,450,333.57 in nonexpense payments to be made. Total cash consumption for the facility over the past year was $25,764,232.57, leaving $968,662.66 coming into the facility. Cadwell said that the facility did access $900,000 in credit, from their bank, during the same time period.
Currently, WCHS owes other companies or businesses $1,706,426, according to Cadwell. If you take
away the $900,000 in credit that the facility used, Cadwell said, WCHS still owes $806,426, or roughly 2.5 months of operation. 
But what can be done?
According to Cadwell, the board and facility are looking at items that can be cut and ways to shrink back spending in departments. She said that the board discussed cuts and determined that at this time nothing should be taken away from the employees (bonuses, 12 days of giving, recognition banquet, etc.) but that those organizing the activities or events should look at cutting spending wherever possible. 
Others areas the facility is considering cutting or have already cut are overtime, travel, tuition, marketing and the newsletter and calendar the facility produced. 
“We are monitoring orders big and large. Basically, we will not be purchasing anything at this point on the capital asset list,” Cadwell said, noting that WCHS has needs that must be met, including computer replacements, email server replacement, a mammogram service agreement and physician recruitment. 
Cadwell said she has developed a plan to reduce spending and increase revenues. 
First, attempts will be made to collect outstanding self-pay accounts. Plans also include reducing temporary staff and the use of legacy systems or the old electronic records systems the facility is still paying for. 
Temporary staff, Cadwell said, has been a struggle with unemployment rates and employability of the area affecting the health care system. 
“Especially in the nursing home, it is something we will struggle with for a long time. I wish we could come up with a magic potion,” Cadwell said. “I don’t think we will ever get certified nursing assistants
that will be here forever, although there is a small group and we are very thankful that they have stayed.”