PHOENIX — The state will give $3.6 million to the only hospital in Green Valley in a plan designed to keep its doors open.
The first $1.1 million payment has been made under a deal with the state, with an account set to receive the second $1 million payment, said Kelly Adams, the chief operating officer of Santa Cruz Valley Regional Hospital.
Two more payments totaling $1.5 million are to be paid within three weeks.
The money will most immediately be used to pay staff and suppliers, Adams said.
He said the hospital has been in financial trouble due to the pandemic and related restrictions imposed by the state.
In-patient revenues have dropped 60%, Adams said, driven in large part by a ban on elective surgery that Gov. Doug Ducey imposed to preserve medical equipment and supplies for pandemic use.
Emergency room revenues have dropped by the same amount, a situation that officials at the Arizona Hospital and Healthcare Association say is directly related to the governor’s stay-home order and fewer people on the road and getting into accidents.
To get the money, the governor’s office required Adams and hospital officials to sign a contract with the Arizona Health Care Cost Containment System, the state’s Medicaid program, and agree to conditions.
One is a requirement to remain open 24 hours a day, seven days a week.
Executives will have to take a 20% pay cut, though Adams said he is taking 30%.
And there cannot be payments to owners or shareholders.
The contract runs only through the end of May, leaving the question of whether the hospital can stand on its own afterward.
“We would hope so,” Adams said. “It just depends on how soon the patients come back, those that need elective surgeries, how soon the ERs pick up.”
Ducey has agreed to allow hospitals to resume elective surgeries if they have sufficient supplies.
And while the governor’s stay-home order remains in effect, he has loosened restrictions somewhat on where people can shop.
All hospitals are “going through the same issues that we are,” Adams said. “We just happened to be the first ones to raise our hand and say, ‘Hey, we need help.’”
But this isn’t the first time the 49-bed hospital has been in financial straits. It emerged from bankruptcy in 2018, with Adams taking over shortly thereafter. However, Adams said there is a path to profitability.
“We’ve done our studies,” he said. “We know what the epidemiology of the community is and the services that need to be provided. And there is sufficient population here to support this hospital.”
Ducey was pleased an agreement was reached “that ensures health-care operations continue and protects taxpayers,” gubernatorial press aide Patrick Ptak said.
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