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County hospital makes strides

Five months after voters overwhelmingly approved a half-cent sales tax in the April election, the Iron County Hospital CEO is feeling confident that the financially-troubled hospital has a fighting chance to achieve financial stability after more than a decade of uncertainty.

Passage of the sales tax was crucial for the hospital’s survival because directors had filed for Chapter 9 bankruptcy on Feb. 21 hoping to slow the financial bleeding the rural hospital has experienced since opening its doors in December 2006.

Through Chapter 9, cities, towns, counties and other public districts get protection from creditors while they pay back debt through a confirmed payment plan. The half-cent sales tax, which won in a vote of 955 to 578, is expected to bring in approximately $400,000 in additional annual revenue which will be added to a half-cent tax already in effect that together will begin tackling the hospital’s years of unpaid bills.

“We’re super excited by the turnout on the sales tax,” CEO Joshua Gilmore said. “What an overwhelming show of support from the community. It was just absolutely huge. I believe they will begin collecting that tax on Oct. 1 and then we should start seeing payments from it sometime around January. That will be a big step in the right direction for the hospital.”

The hospital has also completed its commercial insurance negotiations and they are now in place.

“I think we had finished Blue Cross before we went out for the sales tax,” Gilmore said. “That was already done and then we were still working with United Healthcare and we got that resolved as well. Both of those are in effect now, so we’re just starting to see the increase in payments from those — which is obviously beneficial.

“We are very excited that the commercial payers stepped up and partnered with us in collaboration to help us make ends meet. We’ve had some very good collaboration from the state and Medicaid. They’re doing everything they can to help us out, which we can’t say enough good stuff about them.

“We just really appreciate all of our state and federal partners. We’re working with Medicare and the USDA as well. I can tell you that literally everybody we’re working with is doing everything they can to try and get us through this and it makes all the difference in the world. What is going to end up happening as far as all the finite details through the bankruptcy process I don’t know yet.”

Gilmore noted there are several interesting components to the Chapter 9 bankruptcy that he believes are untested as yet within the law.

“It doesn’t appear that there’s been a lot of people, if any, that have done what we’re doing as a special hospital district with Chapter 9,” he said. “So, there’s not a lot of precedent. The cases that we’ve seen have largely been — if it’s another facility like ours — they were either shutting down, and we’re not, or they ended up being bought out somewhere in the middle of the Chapter 9 bankruptcy process. There are some very interesting and intriguing conversations that go on between attorneys as far as what it means when we look at different pieces of the law. It’s a fascinating process.”

All-in-all, the hospital appears to be in much better shape than it was just seven months ago.

“My unaudited fiscal year-end numbers as of June 30 show that we lost a little over half-a-million dollars for 2018,” Gilmore said. “I’m not excited to still be losing money, but compared to the prior year — and we just closed that audit — we had lost a little over $2 million.

“We’re making progress and moving in the right direction. In working with our accountant, we’re looking at some modeling that indicates we should end this current year, FY19, in the black. Not a lot, but in the black — which is huge.”

Gilmore admitted that his experience as CEO of Iron County Hospital has been both fascinating and challenging.

“Nothing that I have done in my career has exposed me to bankruptcy and what that looked like and what the process was,” he said. “It’s all new and it has been consistently in our favor as we work to turn things around. Having the bankruptcy protection has been the right thing at the right time for this organization.

“We are still looking ahead at when we’ll file our plan. Right now, loosely, that’s looking like somewhere around February. Once we file the plan — it’s going to be a five-year plan — so, we will emerge from bankruptcy around five years after the filing.

“We have continued to work very well with all of our different partners. Our vendors are continuing to work with us. Even the local bank is doing everything they can do to support us. I can’t say enough about the very positive communication and the positive outreach that we’re getting from all our different partners through this. I really appreciate how everybody wants to see us succeed.”

Once the bankruptcy process is completed after five years, Gilmore is confident that the hospital will be based on a strong financial foundation for the first time in its history.

“The long-term outlook is very positive,” he said. “We are slowly but surely getting better and the challenge is that we’re having all these great things coming into play, but you just wish that you were a year down the road when you had already been able to realize the increase in tax and all this stuff for a while where it starts to build things up on the bottom line.

“There is no fast-forward button and it is just one day at a time and one foot in front of the other as we move towards sustainability.”

“I believe they will begin collecting that tax on Oct. 1 and then we should start seeing payments from it sometime around January.” — CEO Joshua Gilmore, Iron County Hospital

After years of financial instability, Iron County Hospital will soon submit a plan to emerge from Chapter 9 bankruptcy in five years. The hospital will also soon receive income from a sales tax that voters approved last April that is expected to bring in around $400,000 a year.

After years of financial instability, Iron County Hospital will soon submit a plan to emerge from Chapter 9 bankruptcy in five years. The hospital will also soon receive income from a sales tax that voters approved last April that is expected to bring in around $400,000 a year.

Gilmore

Gilmore

Kevin Jenkins is a reporter for the Daily Journal and can be reached at 573-518-3614 or kjenkins@dailyjournalonline.com

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