Three Rivers Hospital room. Photo by Sue Misao

Three Rivers Hospital room. Photo by Sue Misao

By Ann McCreary

Three Rivers Hospital in Brewster improved its financial standing last year, reducing annual operating losses from $1.1 million in 2011 to $115,000 in 2012, said General Manager Bud Hufnagel.

Results of a recently completed annual financial audit for 2012 represent “a turnaround in excess of $1 million in profitability,” said Hufnagel, a hospital consultant who was hired two years ago by Okanogan Douglas District Hospital – renamed Three Rivers Hospital – to help the financially troubled institution.

The improved financial outlook is due to “a commitment on the part of the board and staff of the hospital to do things needed to improve operations,” Hufnagel said. “We’ve essentially rebuilt this hospital from the inside out.”

Three Rivers has taken steps to cut costs and improve revenue, Hufnagel said. These include a voter-approved tax levy increase in 2011, closing a satellite clinic and a sleep clinic, and renegotiating contracts with employees and vendors. As a result of these and other steps, operating expenses decreased about $900,000 from 2011 to 2012.

Despite reducing expenses, Three Rivers Hospital continues to borrow money from Okanogan County to pay for operations, as it has for many years. These borrowed funds act as “a working capital line of credit” and are repaid as money is collected by the hospital, Hufnagel said. The hospital currently has a loan balance of about $2.9 million, he said.

“We are hoping to substantially reduce the need for those warrants,” he said.

Three Rivers Hospital has certain costs associated with its federal designation as a “Critical Access Hospital.” It is required to maintain minimum staffing levels in its emergency rooms and some other departments, and is required to treat all patients regardless of ability to pay.

The hospital recently launched a joint venture with Wenatchee Valley Medical Center to recruit new physicians to practice in the area, with the goal of increasing patient use of the facilities and bringing in more revenue, Hufnagel said.

Over the past two years, nine physicians have moved out of the area served by the district, which stretches from Mazama to Mansfield. The resulting shortage of doctors means fewer patients are being referred to Three Rivers Hospital for care. Hufnagel said interviews of prospective physicians should begin soon.

Hufnagel said Three Rivers Hospital recently received recognition from the Rural Healthcare Quality Network for improvements in obstetrical care – in particular reducing early elective deliveries, and for improvements in outpatient care.