Curry Health Network Community Update - Finances

Ginny Razo, CEO

GOLD BEACH, OR (May 25, 2016) - Every single person served by Curry Health Network matters and contributes to its financial health.

No matter where you live on the southern coast of Oregon, Curry Health Network (CHN) exists to support the health of the communities it serves. This is the highest priority of our board of directors, physicians, and employees.

CHN is a Network comprised of a not-for-profit Critical Access (CAH) Hospital, clinics, ambulatory surgery center and assisted living facility whose service area reaches more than 22,000 people. Many more are served whom live outside the official District boundaries. Our most important value is offering accessible quality health care for you and your family when you need it.

While property tax dollars generated from assessed home values within the District's geographical boundaries support CHN and its facilities, our daily operating expenses far exceed the 3% of total revenue from these annual collections.

State-of-the-art healthcare is expensive and always evolving. Unlike large health systems that have the financial capacity to take on debt for new equipment and services, CHN must work harder to improve its overall financial health in order to reinvest in needed services and technology.

Here's a snapshot of Curry Health Networkʼs financial indicators, based on services rendered in or outside the District for the fiscal year ended 6/30/15:

●Annual operating budget: $35 Million
●Amount of community tax contribution, District-only: $1.3 Million
●Amount of revenue from services rendered outside District boundary: 47%
●89% of all services rendered were out-patient
●11% of business was in-patient
●% of volume by communities of Brookings (54%), Port Orford (3%) and Gold Beach (28%)

Sustaining Health Care in our Communities

As we move forward in this new era of health care reform, CHN needs strong financial strategies in order to be viable.

Why? To ensure that basic services and technology are available to everyone who lives, works and plays in southern Oregon for many years to come.

We face the very same challenges as any other hospital in the nation, no matter the size. These challenges include recruiting and retaining physicians, medical providers and qualified hospital staff, purchasing and replacing equipment and technology, offering new programs and services and much more.

Access to good healthcare is important. We recognize the need for emergency care in communities such as Brookings. The reason it doesn't exist today is pure economics. The simple truth is CHN didn't have the needed dollars to open an emergency room in that location, with or without a tax measure.

We've made enormous strides in our financial position since then, now with 18 days of cash on hand. This is important because it represents the total funds that are immediately available to us that can be spent as needed without going into debt or arranging other financing.

Our most pressing financial goal is to achieve 30 days cash on hand. The average and optimal days of cash for hospitals similar to CHN and located in Oregon is 69. In order to achieve 30 days cash on hand, CHN will need to continue to build reserves and control expenses, sufficient to earn a margin.

There are other potential threats, too, such as federal mandates of the Affordable Care Act, shifting and lower payments from Medicare and commercial insurance providers, higher overall operating costs, more publicly scrutiny about quality of care and rapidly changing technology.

The landscape of health care is shifting, and Curry Health Network must shift with it.

At CHN, we're not insulated from the impacts of challenging external forces, and we have an opportunity to thrive for many years in the future by proactively addressing the "big picture" health needs of our communities now.

We must strive for the strongest financial position possible, in order to provide life-saving 24/7 services, and have a healthy bottom line.

This will require conservative and disciplined financial management, greater levels of teamwork, a proactive attitude at every level of the organization, and meaningful partnerships. We are working hard every day to manage costs and be more efficient.

I am particularly humbled by the employees of Curry Health Network. They've picked up extra shifts, reduced overtime and supply costs, and work as a close-knit team. Our employees are CHN's most valued asset.

As a result of the cash crisis in November 2015, CHN immediately placed the hospital-funded retirement match dollars, as well as cost-of-living increases, on hold until the organization reaches its goal of 30 days cash on hand. Even with these challenging restrictions, our employees have kept their heads down, and are working tirelessly and with heart-felt dedication.

I am so proud to work with each of them. They want to do right, simply because it benefits all of us.

We've got a long way to go, but things are looking up.

CHN can be financially solid and positioned well for the future with the strong actions we take now. We're developing budgets based on current market trends, with a concentrated effort to put solid systems, policies and procedures in place to effectively manage our finances.

Our financial focus is simple: Build cash reserves. Reduce debt. Generate a margin. Reinvest in services and programs for the communities we serve.

Curry Health Network can absolutely be one of the highest performing health care Networks in the nation for the type of services we offer.

With everyone's commitment and support, we'll reach that goal together.