As Bartlett Regional Hospital works to resolve an estimated $10 million deficit by the end of the 2023 fiscal year in June, hospital leaders are requesting an additional $5 million in funding from the city for the upcoming 2024 fiscal year budget starting in July.
Bartlett’s senior leadership team members presented the hospital’s proposed upcoming budget to the City and Borough of Juneau Assembly’s Finance Committee Wednesday evening.
The hospital is in the final phase of a three-phase action plan that began in late November after the hospital learned that since the summer of 2020, it has been losing more than $1 million each month for a total estimated $10 million deficit.
To resolve the deficit, the hospital has implemented measures like reduced staff overtime, streamlined leadership and reduced spending to balance its budget ahead of the start of the new fiscal year.
Bartlett chief financial officer Sam Muse spoke to the Assembly and attributed the hospital’s financial decline largely to the halt of COVID-19 funding that occurred while the hospital’s operational expenses continued to remain unsustainable, along with increased hiring that was required to service the uptick in patients during the pandemic and to staff the hospital’s new molecular lab and other facilities.
According to the presentation, since 2019 the hospital increased its staffing hours by 19%, which equates to an additional 146 full-time positions.
Muse said the hospital’s request for the additional $5 million will go toward replenishing its emergency fund as the hospital has spent “an alarming amount of cash this year” and is “getting close to where we consider not very healthy in terms of cash reserve.”
According to the proposed budget, Barlett’s expected fund balance for the fiscal year 2024 will be about $45 million, an amount that Muse said would create a neutral budget and an adequate emergency reserve.
Muse said the funds would also be used toward the hospital’s planned expansion of service lines such as home health and hospice, long-term care at Wildflower Court and crisis services at Aurora Behavioral Health Center, while still maintaining enough in its emergency reserve.
Hospital CEO David Keith agreed, and said the funds are needed as the hospital pursues “strategic initiatives.”
“The bottom line is the funds we set aside are not for day-to-day operations, they are for strategy,” he said. “We have so much outmigration and funding leakage, into Anchorage or Washington state, tens of millions of dollars that we don’t capture, and there are reasons for that — part of it is we have been so hospital-centric that we forgot the hospital environment is changing.”
Assembly members expressed their support in providing the funds to the hospital but hesitated to OK the full ask of $5 million, as the city has yet to determine what other requests from the community might warrant funding that could become unavailable if the full $5 million is moved to the hospital.
A motion was approved to OK an initial $2.5 million in general funds to be moved to the hospital’s fiscal year 2024 budget. However, the other $2.5 million of the request was instead moved to the city’s pending list to be considered in the coming weeks as the budget process continues.
• Contact reporter Clarise Larson at email@example.com or (651)-528-1807.