Boulder City Hospital getting healthier

L.E. Baskow

Boulder City Hospital CEO Tom Maher is overseeing the nonprofit organizations efforts to recover financially through an expansion and renovation project on Monday, April 14, 2014.

Boulder City Hospital Expansion

Boulder City Hospital CEO Tom Maher is overseeing the nonprofit organizations efforts to recover financially through an expansion and renovation project on Monday, April 14, 2014. Launch slideshow »

Tom Maher was running out of options.

The Boulder City Hospital CEO had been trying for years to find a way to shore up the finances of the independent nonprofit facility, which had been hemorrhaging money since the 1990s.

Maher, who took over as CEO in 2007 — just as the bottom was about to fall out of the economy — had been turned down time and again for a loan that could refinance the hospital’s debt, provide cash for development and preserve about 200 jobs.

Voters were no help, either. In 2008, a proposed tax-financing district that would have generated about $750,000 in annual revenue for the hospital was rejected. The measure received just 39 percent support.

“Our balance sheet (had) been so poor for so long, we couldn’t find traditional sources of financing,” Maher said. “We also aren’t corporate, just a little independent struggling to keep up, so we had no cash reserves.”

Dogged by increased operating costs and decreased patient volume, the hospital lost an estimated $550,000 annually between 2000 and 2008, a figure that jumped to about $800,000 a year between 2008 and 2012, according to Maher, who has worked in health care administration since 1999.

The hospital was further stymied by an oversight in maintenance of its chargemaster, a hospital’s list of procedures, services and supplies provided to patients. Ideally, the chargemaster is updated frequently as departments add charges for new services or terminate them. Maher doesn’t know exactly when the ball was dropped on updating the chargemaster because it predated his arrival. When it was discovered, however, hospital officials realized that the oversight had shorted the hospital of revenue it would have received had the chargemaster been kept up to date. The problem was corrected, Maher said.

Boulder City Hospital was on the verge of declaring bankruptcy. The 41-year-old facility needed a makeover and money to invest in new patient services that could bring in revenue.

In 2011, Angela Quinn, managing director of the nonprofit community development corporation Building Hope Nevada, heard about the hospital’s troubles. She proposed a source of funding that Maher hadn’t considered — the U.S. Department of Agriculture’s Rural Development program.

“I had worked with the USDA for an eco-tourism feasibility analysis and learned about its other programs, including Rural Development, and put two and two together,” Quinn said.

Through Quinn, a renovation plan for the hospital was presented to the federal agency not as a health care project but under the auspices of economic development.

After a lengthy application process, USDA Rural Development approved a $13.9 million loan and guaranteed a $2.4 million loan from private lender Rural Community Assistance Corp. to fund the makeover, which also has support from Building Hope Nevada, Clark County and Boulder City.

“If the hospital had closed, we would have lost 200 jobs instead of gaining 90 full-time positions,” Quinn said, adding that Rural Development served as a lender of last resort, providing a 40-year, low-interest rate.

“You have to be able to demonstrate that you cannot get financing in the conventional marketplace, so in parallel, we were trying to get traditional banks to lend us money. It was a blessing in disguise that they wouldn’t because the hospital would never have been able to handle a 7 percent interest rate at 15 years.”

County Commissioner Mary Beth Scow, who represents Boulder City, helped secure a $250,000 grant from Clark County to help fund the expansion.

With federal funding in hand in July 2013, Maher said construction began on Phase I — a 10-bed inpatient geriatric behavioral medicine unit and 10-bed inpatient acute rehabilitation unit. The units opened in January, and each is in line with the hospital’s revised mission statement, which fosters an “age in place” business model.

“We started a process of defining who we are and what we are going to be to the community, and we decided to dedicate our strategic vision to creating a campus of owned and partnered services so people in Boulder City don’t have to leave town for medical care,” Maher said, adding that the hospital is working with behavioral health management company Horizon Health to strengthen these new inpatient programs.

The geriatric program provides behavioral health care for those who suffer from, among other things, illnesses such as major depression, delusions and hallucinations, suicidal thoughts and severe mood swings. The acute rehabilitation unit provides care for stroke, spinal cord or brain injury, orthopedic-related disorders, amputations, multiple trauma and other conditions.

Phase II of the hospital’s renovation — which is underway and expected to wrap up in September — includes an expansion and modernization of the emergency room as well as upgrades of the lobby, business offices, physical therapy unit and long-term care unit (and that unit’s dining and activities room).

Sarah Adler, Nevada director of USDA Rural Development, said Boulder City Hospital was well-suited to benefit from the agency.

“Hospitals are what we call ‘community anchor institutions,’ along with schools, libraries, local government facilities, city halls and community centers that create a sense of pride and identity in small towns,” Adler said.

One vital loan qualification? The ability to repay it.

“People have to put skin on the table,” she said. “I looked the leaders of Boulder City Hospital and local government in the eye and gauged that, yes, the community believes in the hospital and does support it. It just needed modernization in order to be robust in 21st-century health care.”

Adler said the federal funding is being used to refinance the hospital’s debt and for construction, both of which will serve to keep the hospital viable while saving jobs and adding dozens of others.

With the two new service lines up and running and a demonstrated public interest — the geriatric psychology unit in particular has taken off, averaging six to seven patients a day — Maher said the hospital is serving the community’s needs not only in Boulder City, but in Searchlight and Laughlin, as well.

And these days, when Maher looks at the hospital’s financials, he can smile.

“We turned a profit last year for the first time since the mid-1990s, which is as far back as the archives go. We made more than $1 million, which is a really big deal for us.”

And the good news keeps coming in the form of increased patient volume and revenue.

“In 2013, our emergency room visits increased 10 percent, and the first three months of this year we’ve seen another 7 percent increase, to where we’re averaging over 500 ER visits per month,” he said. “We intend to continue with campus development and are fortunate to run a hospital in a community that embraces it as much as Boulder City does.”

Mayor Roger Tobler lauded hospital officials’ perseverance.

“Any time we can keep from having to go over the hill (for medical care), it’s a good thing, especially in emergency situations,” Tobler said. “It’s a major strength to the community to have a hospital here, so we’re very supportive of them and consider them to be an important aspect of our town.”