news-hospital-pFile photo by Sue Misao



A recent state audit has found that Three Rivers Hospital in Brewster has “insufficient funds to cover operating expenses,” a conclusion that comes as no surprise to hospital officials.

“We don’t disagree with the … finding. That’s not rocket science,” said Bud Hufnagel, the hospital’s chief executive officer.

In an effort to stop the financial hemorrhage, the hospital has launched an effort to recruit more primary care physicians to the area, Hufnagel said. The financial stability of the hospital relies on having enough local doctors to refer patients to the facility, he said.

Hufnagel was hired almost two years ago by Okanogan Douglas District Hospital – renamed Three Rivers Hospital in 2011 – to perform a financial “turnaround” for the troubled institution. Hufnagel has more than 35 years of experience in the health care industry, particularly in helping hospitals that are in financial distress.

State auditors said Three Rivers Hospital has lost revenues over the past two years “due to continued losses of medical staff in the community, particularly over the last 24 months, and the inability of the local providers to recruit new physicians.”

In an interview Monday (July 1), Hufnagel concurred that a shortage of referring physicians is at the heart of the hospital’s financial problems.

“The key is … you need primary care physicians, family medicine doctors, internists and pediatricians,” Hufnagel said. “Since 2010 we have lost nine providers in our district. When they left, that creates a gap in the number of physicians in the community. There have to be physicians to put people in the building. Whoever the remaining physicians are in the community, they’re going to pick up some of these patients, but they wont pick up all of them.”


Looking for doctors

To address the doctor shortage problem, Three Rivers entered into a joint recruiting program with Wenatchee Valley Medical Center three months ago. The two health care organizations have hired a national physician recruiting firm, Dallas-based Merritt Hawkins, to try to attract primary care physicians to North Central Washington.

“There is an acute shortage across the country of family medicine physicians,” Hufnagel said. The situation is not expected to improve in the near future, he added.

“You’ve got a little place like the Okanogan Valley trying to compete with Seattle, Portland, Vancouver, B.C.,” Hufnagel said. “It doesn’t take long to figure out that you’ve got to find a very particular kind of person” to recruit to this area.

A 2009 policy brief by the University of Washington School of Medicine describes a “crisis” in primary care in rural areas like Okanogan County. Of 2,050 rural counties in the United States, 77 percent don’t have enough primary care doctors, and 165 counties have no primary care doctor at all.

In 2005 there were 55 primary care physicians per 100,000 residents in rural areas, compared to 72 per 100,000 in urban areas.

“The number of students choosing primary care careers has declined precipitously. Low compensation, rising malpractice premiums, professional isolation, limited time off, and scarcity of jobs for spouses discourage the recruitment and retention of primary care providers,” the UW report said.

Hufnagel said he hopes to have three additional physicians practicing in the hospital district – which stretches from Mazama to Mansfield to Monse – by next year. “It would be perfect to have them in the southern end of the district. There is less coverage … and it’s where most of the people are.”

In their review covering the period between Jan. 1, 2011, through Dec. 31, 2012, state auditors noted that Three Rivers has taken steps to improve its financial condition, including passing a permanent tax levy in 2011 that increased tax revenues by $700,000 in 2012; closing a satellite clinic in Mansfield; selling a sleep clinic; and renegotiating a contract with the nurses union. The hospital reduced operating expenditures by about $730,000 in 2011 and $900,000 last year, according to the audit report.

Auditors recommended cutting services and departments that aren’t necessary to comply with the hospital’s designation as a Critical Access Hospital. As a Critical Access Hospital, Three Rivers Hospital is required to maintain minimum staffing levels in its emergency room and other departments and to treat all patients regardless of ability to pay.

As it has for many years, Three Rivers Hospital borrows money from Okanogan County to pay for operations. Interest is charged on the funds, resulting in additional expense to the hospital district. The amount of borrowing has increased from $1.5 million in 2009 to about 2.9 million in 2012, according to the audit report.