Delta, CO (March 28, 2023) – During a Board Meeting on Monday, March 27, the Delta County Memorial Hospital Board of Directors updated the community on recent organizational changes that had taken place in previous weeks.
During a special board meeting on Friday, March 24, the Board in consultation with Matt Heyn, mutually agreed that it was in the best interest of the organization to make a change in CEO leadership. Matt Heyn is no longer with Delta Health. Julie Huffman, Delta Health Chief Legal Officer, has been appointed interim CEO.
“Delta Health is committed to the highest degree of transparency and professionalism,” said Jean Ceriani, Board Chairman. “We will continue to share information with our staff and community as we have it.”
After the unexpected departure of Chief Financial Officer, Larry Vincent, the board felt it was prudent to have an outside consultant evaluate the condition of the organization’s finances. The board learned from the evaluation that there were inconsistencies within the financial reports. The investigation did not reveal any evidence of fraudulent or illegal activity.
The report revealed that Delta Health’s remaining cash investments are encumbered by its debt obligations; meaning cash reserves are restricted, preventing Delta Health from liquidating, selling, or transferring those funds.
“Barring any unforeseen circumstances, we are confident we will be able to continue to meet our financial obligations – first and foremost to our staff and to our vendors who support us,” said Ceriani. “We are currently exploring several emergency funding resources that may be available to us, should we need them.”
The board said various factors have contributed to their current financial state. The primary contributor is the effect of repaying the Medicare advance payments that were received from the Centers for Medicare & Medicaid Services in the wake of the COVID pandemic.
“The repayment obligations, which accelerated throughout 2022, devastated our cash reserves,” said Ceriani. “We now have repaid every dollar, having made the last payment in March.”
But Delta Health is not alone in its financial struggle. According to the Colorado Hospital Association (CHA), statewide the total operating margin for hospitals is 1.5%. This operating margin reflects revenue from patient care, and this is the first time that the total margin has been this closer to zero. The CHA also reports that labor expenses have significantly increased from 25.7 percent in 2019 to 26 percent. Total expenses for Colorado hospitals are significantly higher than pre-pandemic levels, outpacing increases and reimbursements.
The board said another hurdle they face is inconsistent payment by their insurance payers. They rely heavily on timely payments, but without them, they would be unable to meet financial obligations.
“When insurance carriers do not pay on time or in full, it has a direct impact on our financial health,” said Ceriani. “In addition, Delta Health has a payer mix of 70 to 80 percent Medicare and Medicaid, and has substantially lower reimbursement rates than private insurance.”
The board said their main focus is on staff, providers, patients and their community. They are working to ensure the communities’ continued access to healthcare. Delta Health provides hospital and primary care services and is also one of the largest employers in Delta County.
Both the board and Delta Health’s Administrative team said they are reaching out to various resources across the state to identify short and long-term solutions to the current state of their finances and their need for permanent leadership.
“The trust and confidence of our staff and community are a great responsibility and precious resource,” said Ceriani. “To serve a strong rural population with diverse needs, the local hospital and health system must stay intact, healthy, and viable.”
To learn more, go online to deltahealthco.org/board-directors/.