At the first October regular meeting Tuesday night of the Hope City Board, Jamie Pafford-Gresham CEO of Pafford Medical Services, which currently manages Southwest Arkansas Regional Medical Center, said Hope’s only hospital will need help to make it through the next months. All of the board members, at the recommendation of City Manager J.R. Wilson agreed to provide some of that help.
The video of the meeting in its entirety can be seen below this article once it becomes available.
The board voted to invest $500,000 immediately to help the hospital meet payroll and other expenses in the near-term and will likely move to offer an additional $2.5 million which Wilson said could come from other unspecified agencies as well as from the city applying for a loan that would likely cost six percent interest.
Pafford-Gresham said during a presentation that included slides showing specific numbers, that while the hospital’s finances are projected to improve when it begins to receive 101 percent Medicare reimbursements (which its recently approved status as a critical access hospital allows the hospital to do), its present state has it losing money. “When we talk about the money that we've collected throughout the year, [we’re] realizing the dollars collected isn't what we wanted, and we're running at about a million and a half dollars a month [in] operating expenses,” she said. But per month, the hospital is taking in under a million dollars.
So far, with about $7 million in funds invested by the Pafford family itself as well as the company and $2 million in combined funds from the city of Hope and the county of Hempstead, the hospital has continued to make its payroll, which supports 120 full-time and 20 more part-time employees. But Pafford-Grisham said more outside help is needed right now.
“When we all started this discussion we knew that we needed about seven and a half million dollars from the state to get to where we needed to be to be functional. Well, we're right at that number of what we put in it, and knowing going forward, we have six hard months ahead of us, and at a loss of about a half a million dollars a month,” she said, adding that making budget cuts and seeing fewer patients would not solve the problem.
Concerning collections of bills, Pafford-Gresham said a vendor has been hired to improve the situation but the next few months will be crucial for tiding the hospital over until it can collect more revenue. Plans to apply with the IRS for nonprofit status, the speed of which depends entirely on the IRS, should allow for more revenue from entities that can make tax-deductible donations.
October, she said, poses an immediate difficulty. “I shared with J.R. that this is a three-payroll month for us. Now, everybody else might like to get that third check in the month, but when you have to pay that third check in a month, it really, really hurts.”
Pafford-Gresham sought to allay fears that the hospital, because of its revenue troubles, could fail. “If I thought we needed to pull the plug and say we're done, I'm a big enough girl to tell you … but I do not feel that way. I feel like we have a hospital that our community needs, … we have a staff that wants to take care of people, and … the expertise in house now that actually knows what we're doing with a true critical access hospital, and [knows] what's the best way to set us up for success moving forward.”
She did not specify an amount needed, but made clear the importance of a contribution from the city of Hope at the end of her talk. “I'm not good at asking for things, and I don't like having to ask for help. And so I'm very humbled and holding my hat and hand in front of you today, asking for you to seriously consider how the city can help us continue on with southwest Arkansas Regional Medical Center,” she said.
Director Trevor Coffee asked Pafford-Gresham what would occur if in six months, the hospital was still losing money. She responded that a new revenue stream could be stood up by then involving patients whose hospital stays would be longer.
“Our plan is to be very robust about the demographics and the patients that we want to come to the facility,” she explained. “We'll be opening a swing bed unit. You've got 48 beds in that hospital, and they've been using nine of them in one area and 10 of them in the other and that's it. But we have the opportunity to open a swing bed facility, very much like a skilled nursing facility, and get those patients back in there, because those are patients that will help us with our numbers. And they're out there. They're going elsewhere. Our patients here in this community are going elsewhere for that care. We can take care of them here.”
When asked about attempts to acquire state funds, Pafford-Gresham said that while these have not panned out so far, the efforts will continue. The fact that Hope’s hospital never applied for and never received funds from the state’s COVID relief budget, she said, had astonished the state task force with whom a party representing Hope and the hospital met last month: “That's pretty much what we've been saying for the last year, is you haven't given us any money, and we've been on our own two feet this whole time, and we're asking for help to make sure that we're not on our knees.”
Attending the meeting was resident Willie Walker who asked what dollar amount Pafford-Gresham was asking for. She said $3 million, the same amount requested at the meeting last month with members of Governor Huckabee Sanders staffers.
City Manager J.R. Wilson said the city could provide a half-million dollar surge for October immediately, but would be seeking other sources to cover future months. “We're talking with another agency now that next month, maybe could supply that other 500,000 next month. I think the third agency we're talking with, I think they're saying they don't have the money.”
He reported that talks had been going on among members of the hospital committee “We think we could then borrow $2 million over five years. That's the maximum we can borrow without going through a bond issue. We can make a short term loan for five years and say that's a six percent interest. We could infuse them with the amount of cash they need for the six months. That would cost us a payment of about $39,000 a month. If we could get three entities, the three entities to help pay for that, it would cost each of us about $13,000 a month, or $156,000 a year.” Wilson and ex-mayor and current Director Steve Montgomery said even if the city had to borrow the full amount, this would not affect its ability to provide residents with their accustomed services.
Wilson said the loss of the hospital would do great damage to Hope’s economy, with so many industries depending on near proximity to a hospital. “The only option we really have is to give it our best try, because if we don't do it, the evidence suggests our community is going to suffer in a difficult way. I'd much rather go to the voters and say, if they get mad at us [and say] ‘You spent a million dollars and you lost it all], I'd much rather take that hit, then you didn't spend the million dollars, and look what we could have done, what you could have prevented in the future, five years down the road, 10 years down the road.”
He recommended the immediate $500,000 infusion and then the allowance of time for the Hospital Committee to seek out the remainder from other sources prior to a decision on whether the city would borrow additional funds.
In the long term, though, a stable source of revenue, he said, may have to come from the decision of Hope voters to contribute monetarily to keeping their hospital. “Another leg of our strategy was we're going to need to go to the voters of Hempstead County at some point with a tax for the hospital restricted funds to be used for the upkeep and whatever legally we can spend with that money on the hospital to help maintain it.” The earliest such a tax could be placed on the ballot is in February if Hempstead County declares an emergency, Wilson said.
Pafford-Gresham supported this. “Looking at all of the other critical access hospitals and smaller hospitals throughout the state,” she said. “They all have some type of supportive tax to keep them open, because the struggle is real. Medicare and Medicaid don't pay enough to keep the doors open, and they have to have a little something, something on the side to make it work.”
Mayor Don Still summarized the situation Pafford came into in buying the rights to operate the hospital after its prior operator Steward Healthcare declared bankruptcy.: “They inherited a mess. I mean, it was a mess out there, and they've turned that thing around to where I have citizens talk to me about how great of care they have out there, and I have all the time they say, man, we went out there and they took care of me, or they sent me on to where I need to go and it's just a great for the community to have that. I just can't even think about not having it.”
After Mayor Still asked whether anyone else had a comment, former Hope mayor stepped to the podium to offer another perspective in addition to the economic. “What's going to happen to the community? What's going to happen to your family? That's where we need to look. What's going to happen if you have a medical emergency with your kids, your spouse, your grandparents?”
He recounted a time recently when he and his wife Linda both had to make use of Southwest Arkansas Regional before being transferred to other hospitals and learning of the scarcity of available beds at hospitals in the region. But he and his wife were able to be stabilized in Hope before these beds could open up, as opposed to having to travel many crucial minutes and waiting. The care they received at Southwest Arkansas Regional was “excellent,” he said.
Director Montgomery stressed the need for a hospital when recruiting businesses to come to Hope. Hempstead County Economic Development Corporation Executive Director Anna Powell said a hospital would also be needed so that companies here could feel confident in remaining and expanding. She cited the fact that companies have invested $178 million in expansion here since 2022.
Montgomery made the motion to approve the $500,000 infusion. The board members present all voted in favor by roll-call voice vote.
In other business, the board did or heard the following:
· A request by Hope Public Schools Superintendent Jonathan Crossley for an arrangement whereby the district could acquire two acres owned by the city that adjoin the property the district has already bought along Bill Clinton Boulevard for use to build an athletic complex. Wilson said he would research the possibility of a timber harvest on that land and land where the future aquatic and recreation center will be located to raise funds that could compensate the city for selling the district the two acres at a price below market value.
· Chose to provide for two toilets in the women’s bathroom and one toilet and one urinal in the new facilities to eventually be built at Northside Park as part of the Hope for the Future park improvements to occur over the next couple years. MAC Construction will undertake the construction work. The choice of the board to add the additional toilet to the women’s side will add a $4,200 cost to the original $80,000 estimate.
· Passed a waive bid ordinance to go ahead and purchase for $130,000 an above-ground dual-pump system to replace an underground system that was rendered inoperable due to water infiltrating its parts.
· Voted, as required annually by the state of Arkansas, to affirm by ordinance the 2025 Five mills real and personal property tax.
· Voted, as required annually, to affirm by ordinance the 2025 Firemen’s Pension Property Tax rate at one mill.
· Approved the receiving of $49,000 in federal and state funds after the awarding of the STEP Grant, which is used support DWI/DUI, Speeding, Distracted Driving and Seat Belt enforcement.
· Approved the receiving of STOP grant funds of $30,079.78 to enforce domestic violence offenses.
· Heard a short City Manager’s Report in which Wilson said New Millenium is seeking 80 feet of easement be added to its existing easement on city-owned railroad track, which, according to a letter from the company’s consulting engineer William Graham “will allow the crew to move more railcars per switch.” The board approved that request.
· Wilson also said a satisfactory agreement had been reached with Union Pacific on the use of the track on the New Millenium request. There would be no extra cost to the city.
· Vice-mayor Kiffinea Talley raised the idea of the board deciding on a policy to limit the length of citizen comments. Wilson said this would be added to a future meeting agenda after research on the question could be done.