By Ann McCreary
Mid-Valley Hospital in Omak was found to be at risk of not being able to meet its financial obligations and maintain current service levels during a recent audit of district finances and business activities by the Washington State Auditor’s Office.
The financial condition of the hospital, officially called Okanogan County Public Hospital District No. 3, “has continued to decline” and the hospital has been relying on registered warrants from the Okanogan County Treasurer’s Office to pay daily operating costs, according to an audit finding from the state auditor.
Registered warrants are short-term funding available through the treasurer’s office to pay operating expenses and long-term debt obligation when a local government has a cash shortfall.
Mid-Valley Hospital began occasionally using the warrants for short-term financing in 2007, the auditor’s finding stated. The hospital began relying on the warrants in 2013 without paying them off.
The balance on the warrants grew to $1.75 million as of Dec. 31, 2103, and to $1.93 million as of Oct. 31, 2014. The treasurer’s office has limited the district to $2 million, the auditor said.
The district’s financial condition is a result of decreased revenues due in part to funding cuts at the state and federal levels, and reduced patient levels, the auditor said.
In addition, over the past four years, the hospital district has made operating advances to an orthopedic services joint venture with four other regional public hospital districts, for which Mid-Valley is the majority interest member, the auditor said.
The operating advances to the joint venture grew from $383,827 in 2012 to more than $1 million in October 2014, according to the auditor.
In its response to the audit, hospital officials said the increase in cash contributions to Caribou Trail Professional Medical Services Group is due to bringing another orthopedist into the practice, a decline in business, and a decline in payments. The hospital said a study is being conducted to provide “actionable remedies” to the situation.
The hospital also said it is working toward “meaningful reductions in hospitalists, anesthesia and family medicine.” The hospital said it is also scrutinizing staffing levels for all staff as well as the hospital’s ability to fund a profit-sharing plan for employees.