Hospital CEO: Federal support has been crucial

Fresh off being awarded a Quest for Excellence Quality Award, Holy Cross Medical Center in Taos continues to roll with the punches thrown by the still-rampant pandemic, with some of the hardest relating to its bottom line.

Chief Executive Officer Bill Patten spoke for an Oct. 21 Taos News story saying, “In the financial front, we took full advantage of all of the federal programs that were available related to the pandemic. That has helped stabilize some of our finances. Had it not been for the federal money, I

think we would have had to file bankruptcy.”

He went on to say, “There’s no way we could have absorbed the

kind of losses, there were once where we were spending $400,000

to $600,000 extra on pandemicrelated expenses,” which he later explained were primarily for PPE (Personal Protective Equipment) and additional staffing.

“As a result of taking full advantage of the federal programs we

have better cash than we have in a long time,” he said. “It’s one of those things where you feel sort of

funny about saying but, as busy as we have been with critically ill patients, that has translated into a positive bottom line over the last couple of months.”

This year is going to be an anomaly, he said, because of

some of that federal money the hospital is “in a better position financially. Long term, I don’t things have changed. We still have an issue of our fixed costs being a very high percentage of our revenue and revenue I’m anticipating is going to to be restricted. Both Medicare and Medicaid, those programs are challenged, and so

long term I think we need to be vigilant as it relates to our financial position. That ties directly

back to staffing. If we can stabilize our staffing and not be as reliant on traveling staff, that will have a positive impact on our bottom

line.”

Holy Cross, like other hospitals throughout the country, have

struggled to find sufficient staff to meet the influx of patients during the pandemic. Even before COVID-19, Holy Cross was looking to shift away from locums, or traveling nurses, who often are

far more costly than permanent nursing staff.

Contacted Nov. 3, Patten added, “Expenditures at those

levels are not something that we would’ve been able to sustain, without external support.”

Asked what the hospital had to do to become eligible to receive

those federal benefits, Patten said, “There were three different programs: The Medicare Accelerated Payment Program (is one) for which we had to make an application, and as it turned out, we didn’t use any of that money and we’re in the process of repaying it. The

second pot of money was the Provider Relief Funds. Those we got

paid just because we’re a Critical Access Hospital, and they

looked at our overall volumes to determine

how much money we would get. So, we technically didn’t have to apply for that. The third pot of money was the Paycheck Protection

money. And, that we did have to apply for. We worked with Centinel Bank (of Taos) to make the application to the small business association. Each of the three

buckets of money, if you will, had different rules.”

Patten was asked if federal support was based on the number of COVID patients the hospital treated, to which he answered, “No, it wasn’t tied to COVID

patients. There was a period of time where the state of New Mexico increased our Medicaid

reimbursement for (intensive care unit) level care. So, that was directly tied. If we had a COVID

patient in the ICU (Intensive Care Unit) then we would get paid a little bit more. I think it was

something in the neighborhood of a 3 1/2 percent increase. But,

for the other three buckets that I described, if they were related

to volume at all, it was previous volume. “

Given the extra federal funds that were available to help hospitals that had high COVID patient counts some have wondered if that gave them incentive to inflate their numbers. While that could have happened at other

hospitals, Patten said, “There were so many checks and balances as far as all the different reporting that we were required to do. While that might have been

possible, I would describe it as being unlikely [here in Taos]. So,

for Holy Cross, we were so busy trying to keep our heads above water that the idea of trying to

mess with the numbers never even crossed our mind.”

In 2020, Taos County voters approved a $1.3 million annual

mill levy for the hospital, but because it was approved right before the pandemic hit in March, “it didn’t kick-in,” Patten said. “So, there’s a delay [before] that tax goes into effect … People actually

pay the tax and then the county collects it and we’re able to use

it. So, there was a six to 12 month delay from when it went into effect before we actually saw any of that money.”

Looping back to what Patten said about Holy Cross’ use of federal program funds to prevent the

hospital from having to fall into bankruptcy, he said some of the

strategies involved used some of “that paycheck protection money. We got about $4.8 million under that program ... all of that was turned into a grant.

“So, we didn’t have to repay any of that money, but we had

held onto it not knowing if we would have

to repay it. So, until it was actually turned into a grant we viewed it as a loan. And, as a result, having paid all of the bills from that period of time we now

have that $4.8 million of the lion’s share of it that we’re recognizing this fiscal year. So, we

had the expenses, if you will, last fiscal year, but we’re recognizing

the payment for those expenses this fiscal year.”

Asked about what lessons the hospital has learned from this health crisis, Patten

said, “One of the things we have learned is that we cannot

rely on external forces to address our staffing concerns. I don’t believe that staffing is going to return to normal. Where we were two years ago, I don’t think we’re going to see that again. I think the

pandemic has accelerated retirements. I think it has also raised expectations as far as what the compensation and benefits package should be. So, we are actually taking steps to identify a longterm strategy for what I will call ‘growing our own.’ We’re planning to reach out to the high school to begin grooming students for

health care careers. We want to work more closely with (University of New Mexico-Taos) as

it relates to career development. So, we’re going to have to be far more creative and far more long term in our thinking as it relates to staffing.

“Lesson number two is that we have to think outside the box

more quickly than health care traditionally has done,” he said. “Part of it is we have to understand that when there’s a pandemic that the

state or federal government are often not going to be in a position to help us. So, expecting them to reach out with additional employees — that’s just not realistic.

“We’re going to have to think of new and creative ways to provide care when the rules have changed. That’s something I’m

proud to say our medical staff, our front line employees, our

nurses, our techs, they have done a marvelous job this past year of

responding to new and different situations. I think if we can

hardwire that into our culture so we don’t have to wait for another

pandemic, I think the community will be well served.”

‘Lesson number two is that we have to think outside the box more quickly than health care traditionally has done.’

BILL PATTEN

Holy Cross Medical Center Chief Executive Officer