The Times - Serving Waitsburg, Dayton and the Touchet Valley

DAYTON—At their regular meeting in April the CCHS board of commissioners heard from Tom Dingus, an independent auditor who talked about the financial health of the Columbia County Health System based on his report of April 16, 2016.

Dingus, a certified public accountant with the firm Dingus/Zarecore and Associates, PLLC in Spokane Valley, told the commissioners the financial goal for the 2016 end of year cost report is to break even, and he went on to outline some of the liabilities and goals for the hospital district.

“There are 60 rural critical access hospitals in the state,” he told the commissioners. “The bigger ones do better. The smaller ones are struggling. You are more towards the struggling end,” said Dingus who responded to an inquiry from Commission Chairman Bob Hutchens, about how CCHS fares compared with the others.

Dingus pointed to several problematic areas.

Long term debt from leveraging $11 million through limited tax general obligation and refunding bonds for the years 2003 through 2015 is problematic, he said.

“There was a $1 million operating loss in 2015.” Dingus said. However, with tax revenue added in, the health system finished the year barely in the black.

“Lack of continuity in leadership is also a problem,” Dingus said. “In the last twelve years, not counting (interim CEO) John Smiley, Shane (newly hired CEO Shane McGuire) is the sixth person in his seat,” he said.

Other weaknesses include an unstable revenue cycle due to the switchover from computer vendor CSPI, to Meditech, and issues with staffing, including staff turnover.

Dingus also said the best industry practice for a day’s cash on hand is enough money for 90 days of operating costs, and that CCHS has $2 million in cash on hand, enough to operate for only 48 days.

On the plus side, improved billing and collection efforts have had a positive effect on bad debt write off, as has the Affordable Care Act, which has moved 4-5% of the Medicaid population off, he said.

Revenue is up 10%, and there is a 10% increase in private payer amounts, as well, said Dingus.

The operating loss of $1,030,024 and a net total for non-operating revenues of $ 1,024,668 yields a change in net position of $5,356, close to that break-even scenario that is ideal, Dingus said.

The non-operating revenues of just over $1 million consist primarily of property tax revenue from taxpayers in the district, less interest expense. In a separate interview with The Times, McGuire pointed out that residents in the district have shown they are willing to support, with taxes, some health services that operate at a loss. One example is Booker Rest Home, which runs a deficit each year of approximately half a million dollars.

At the end of the report McGuire told the commissioners that their job is to navigate a shaky bridge.

Chairman Hutchens said the commissioners are developing a strategic plan to address the challenges.