Future of RDH at risk

RANGELY | Last Thursday the Rangely District Hospital Board encouraged public attendance at their monthly meeting in order to discuss their financial situation with the community. Prior to the meeting the board had contracted with an accounting firm to review the hospital’s financials.
CPA Report and Hospital Status
Rick Wagner, CPA of Eide Bailly LLP, discussed the report he created for the hospital district which was available in full at the meeting. Wagner called the Rangely hospital system, “unique,” referring to it as a micro health system with a variety of services including long term care and dentistry. He discussed the decline of rural healthcare across the nation saying rural markets don’t have a replacement for patients that no longer seek hospital services because they are able to use outpatient services, which contribute less money to the system. Wagner also said that the services the hospital provides are, “too interdependent to get rid of any of them.” He claimed that if the hospital were to fail the entire Rangely community would fall behind it.
The report provides a grim view of the future of the hospital if current expenses and income levels continue. Debt from the new hospital building and equipment will be paid off in 2026. Current district tax revenue for the building and equipment is $3.8 million and operations receives $1.5 million. Wagner said that by mid 2021 the hospital would, “run out of cash if nothing is done”.
The financial report cost around $30,000. Hospital Board President John Payne said the report was “worth every dime,” adding that they need the public to understand what the hospital has been trying to do for years. “We’re at least trying to not be on our last leg,” he said.
According to hospital CEO Nick Goshe they have cut $2 million and around 15 jobs since 2015.
Goshe was unable to pinpoint the exact number of employees currently working for the district but it was estimated around 115 full time. The report projects more than $1.5 million in salary increases over the next five years, which Goshe said were inflation rates. He added that there have not been any raises in four years.
County Commissioner Jeff Rector praised the hospital service but said the fees were substantially higher than other options available which he described as the “elephant in the room.”
“Until we fix that we’re going to keep chasing that rabbit down the trail,” he said.
Goshe responded that they can’t charge any less and cover the hospital’s costs of operation.
County Public Health Director Julie Drake asked about finding niche markets such as substance abuse and mental health services as well as possibly aligning with larger hospitals. Wagner responded that niche markets required staff that would be hard to maintain and that, in his experience, larger facilities are not willing to work with rural areas.
Wagner was asked about studying the percentage of hospital district citizens that use the local facilities, which was not something they had looked into. However, Goshe said that the facility receives around 6,000 clinic visits per year and 1,200 emergency room visits. Wagner was asked about leakage to other communities but wasn’t able to provide a solid answer.
Several attendees brought up concerns that the new hospital had been built in a way that was hard for the community to maintain, to which Goshe responded, “If I had a crystal ball and you told me the town was going to die, should we have built this? Probably not.”
next steps
The next bond option will be presented to voters in November 2019 when the hospital will seek additional funding, although the exact amount has not been determined. The maximum they can ask for is around $3 million, or up to 15 mils per year. The increase would equate to about an additional $100 per year for a residential property valued at $100,000. Commercial and business entities are taxed at a higher rate, with 85-90 percent of the bill picked up by the oil and gas industry.
In the 2017 tax year the district received $4.99 million in local tax funding. The Eastern Rio Blanco County Health District serving the Meeker area received $4.26 million.
When asked what would happen if the mil levy increase doesn’t pass, Goshe said that services will be cut and “everything will start going away.”
“There are no options for cutting expenses,” Goshe added.

By JEN HILL | jen@ht1885.com