Arkansas Hospital Cites Decline in Patients, Reimbursements
Crittenden Regional Hospital has filed bankruptcy after a recent struggle with a declining patient load and a drop in government and insurance reimbursements. The final blow to the West Memphis, Arkansas hospital came when fire temporarily closed the hospital for six weeks.
According to The Arkansas News, County Judge Woody Wheeless said that the amount of time that Crittenden Regional Hospital went without revenue due to the fire was “the last nail in the coffin.” He continued, “It’s a major blow to this community.”
In June, 2014, Crittenden County voters approved a one-cent sales tax to help keep the hospital’s doors open. Judge Wheeless said that county sales tax was to take effect in the Fall, 2014; but the promise of that money wasn’t enough to prevent the closure and layoff of approximately 400 employees.
Fires Compound Growing Pressure on Hospital
Hospital officials reported that the economy and continued declines in patient volume and reimbursement over the last decade had placed mounting financial pressures on the rural hospital. Financial struggles were further compounded by a significant number of physician departures and two recent fires, the most significant of which shut down the facility for more than six weeks.
Over the last five years, the hospital Board launched a number of initiatives to preserve the acute care hospital, services and jobs. These initiatives included a nationwide search for a health system partner, attempts to secure new capital, recruitment of physicians, and implementation of service enhancements. Ultimately, these initiatives were not enough to overcome the hospital’s financial debt.
“We are deeply saddened to have to make this decision after all the attempts that have been made to preserve the hospital for our community,” said Gene Cashman, CEO of Crittenden Regional Hospital.
“With counsel from national healthcare consulting firms and the passage of a county-wide sales tax, we had identified a long-term strategic plan that had set our organization on a path to improvement. This summer’s fire, and the subsequent shutdown, derailed that plan’s success.”
Sales Tax Proved Community Support
Chairman of Board of Trustees David Rains said, “The sales tax campaign was a tremendous testament to the community’s support for Crittenden Regional and we are thankful for that. Unfortunately, the fire decimated our cash position. We are not able to finance our operations until December when the tax revenues would have been received.”
In addition to the hospital, CRH clinics and home health/hospice services will close, and current patients will be discharged or transferred to another nearby healthcare facility or agency. Hospital leaders are continuing to reach out to healthcare organizations for opportunities for displaced employees, including physicians in order to keep their services in the area. Crittenden Regional Hospital began its service to Eastern Arkansas in 1951.