Borough Assembly and Petersburg Medical Center hospital board members discussed the financial state of the hospital and funding assistance for capital projects from the borough last Thursday morning. The discussion was also directed at how the public will perceive a potential tax levy to help fund a hospital that has remained financially independent of the city, now the borough, throughout its existence.
“The public has a healthy skepticism on the borough’s spending habits,” assembly member John Hoag said.
Hoag referenced high cost projects like the fire station and library as reasons why Petersburg residents might be weary of another spending spree.
But Hospital Board President Tom Abbott said any assistance from the borough wouldn’t be used to sustain operations, as some assembly members are concerned, but rather one-time facility or equipment improvements.
“No one wants to invest in a sinking ship,” Abbott said. “I think people would rally behind improving their hospital facility but not necessarily wanting to get into a tax situation or something like that to pay for operations.”
There are two ways to raise revenue; increase sales tax or raise the mill rate—both would require voter approval.
Hoag questioned the yearly increase of wages, salaries and benefits projected in the hospital’s budget. And he said if the public is to get behind any funding assistance it will need reassurance those expenditures are sustainable.
PMC Employee benefits rose 14.8 percent this July compared to July of last year. Salaries and wages are up 3.5 percent.
Abbott and PMC CEO Elizabeth Woodyard maintain the operations budget, specifically wages, salaries and benefits, is sustainable and in line with other hospitals around Southeast Alaska.
“You don’t just compete with Southeast,” Woodyard said. “We’re competing with the nation.”
She added that means PMC must pay their employees competitive salaries and wages as well as make up for the high cost of living associated with living in Alaska.
The situation wasn’t as secure as noted in a business plan PMC presented to the assembly earlier this year. In the financial status section dated June 23, 2013 the report states, “On May 31, 2013 there was one week’s operating cash on hand…Currently every payday is a day of potential crisis to be sure cash is available to cover payroll.”
Woodyard said the hospital was coming out of a typical slow winter, receiving less revenue, but as the population in Petersburg increased in the spring and summer, more money came in.
The document also states the hospital had $3.7 million in net accounts receivable. Woodyard said there’s been a more concerted effort by staff to bring in that outstanding balance.
Assembly member John Havrilek wasn’t alone in the opinion that the hospital board needed to present a concrete plan to the public detailing how and why it plans on funding necessary projects.
Steve Giesbrecht, Borough Manager, agreed but added that sometimes a plan isn’t enough.
“One of the problems with strategic planning in communities is it doesn’t matter if it makes sense,” Giesbrecht said. “It’s what do the people in the community want and what are they willing to pay for. Right now, the sense is, the public’s not really willing to spend more. And that’s the challenge.”
Woodyard said, for now, no specific amount of money is being requested. only that PMC will likely need assistance in the future because of tighter healthcare costs and Medicare and Medicaid reimbursement losses. The business plan also cites a lack of grant funding from various sources the hospital has historically relied on and high Public Employees Retirement System, or PERS, costs.
The hospital board also argued that since the facility is owned by the borough, the borough should have a hand in its upkeep. The business plan outlines several hospitals around the state whose municipality provides funding assistance including Sitka Community Hospital, Bartlett Regional Hospital in Juneau, Providence Valdez Hospital among others. Wrangell Medical Center does not receive financial assistance from its borough.
At a hospital board meeting later that day, members further discussed capital project priorities and the challenge of receiving state and borough funding. PMC’s projects include renovation of its long-term care facility along with transitioning to electronic medical records, new hospital beds, a new operating bed and an X-Ray machine.
PMC is also working on its public image. Posters highlighting staff with the tagline ‘I’m Petersburg Medical Center’ will hang in hospital hallways.
“We want the community to start associating Petersburg Medical Center with people,” Deena Bottom, RN and Community Education Manger, said.“Not just a building, not just someone who is sending out a bill.”
The board will meet with the assembly again December 5 to further discuss funding assistance and Borough Code as it pertains the hospital board.