Rural hospitals struggle under weight of COVID-19
‘Times are tight right now’, says hospital board member
By Robert Stevens
GUNNISON—Gunnison Valley Hospital finances have been a key topic at the recent Gunnison City Council meetings with a local physician saying the hospital is rolling in cash but a hospital board member saying that because of the impact of COVID-19, times are exceptionally tight.
Some of the discussion of finances has revolved around the publicly owned hospital’s affiliation not just with Mission at Community Living, the skilled nursing facility in Centerfield, but with nine other nursing homes around the state. The other facilities are in Brigham City, Bountiful, Salt Lake City, West Jordan, Pleasant Grove and Nephi.
Affiliation with a hospital enables the nursing homes to participate in a federal program known as the Upper Payment Limit (UPL) program. The program is designed to help fill in the gap between what Medicaid pays for indigent patients and the costs of caring for the patients.
The program helps the sponsoring hospitals, too. They receive 21 percent of the money going to their affiliated nursing homes.
As under Medicaid, the UPL money is funneled through the state. A state report shows that in 2019, Gunnison Valley’s partner nursing homes were allotted $12.7 million from the UPL program. At 21 percent, Gunnison Valley Hospital’s share would have been about $2.7 million. And the hospital has been involved with the program for several years.
At a council meeting May 8, Dr. Kimberly Beck, who practiced at Gunnison Valley Hospital for more than 20 years but parted ways with the hospital in 2016 on unhappy terms, told the council “there is a lot of money coming in, millions and millions,” primarily because of “contracts the hospital has signed with other entities where there are large volumes of cash flow.”
Some of the money goes to cover capital and operating expenses at the contract facilities, Beck told the council. “But there are millions rolling in above those expenses, and none of it comes to the communities that own the hospital.”
Gunnison Valley Hospital is owned by a special taxing district whose boundaries are contiguous with the valley itself. Each city council in the Valley appoints a representative to the hospital governing board. While legally the special taxing district could levy property tax, it never has. At the same time, because the hospital is publicly owned, it doesn’t pay property tax on its land and facilities.
Beck told the council Gunnison Valley Hospital is “a huge resource, and the cities get virtually nothing from it. I’m not minimizing the wages and benefits that come in form the jobs (at the hospital and Mission at Community Living Center), but as far as adding to the tax base, there is one of that because it’s a special service district that was formed decades ago.
“I would suggest to you that perhaps this is an antiquated form of governance…,” she said, “and maybe you should think about restructuring it so the communities actually get some benefit from the largest income-producing business that resides in our community. Right now, we get nothing.”
But at a council meeting last Wednesday, June 3, Casey Dyreng, who represents Gunnison City on the hospital board, dismissed the idea that the hospital has brought in millions in surplus cash. And right now, he said, times are tight.
“The hospital does not net millions of dollars, as some have suggested,” Dyreng said. “It may not net anything this year. The trends are concerning but the hospital has always been financially responsible.”
Dyreng said the hospital has never needed to rely on the support of local taxes, and he doesn’t anticipate needing to moving forward, thanks to the hospital’s rainy day funds set aside for difficult times like these.