In the wake of the current coronavirus pandemic, Derby’s Rock Regional Hospital is seeking help (including potential loan funding) to continue operations and provide necessary services to the community in response to that threat.
COVID-19 has already impacted the services of the hospital. Kevin Hicks, CEO of Cabe Consulting — the new hospital management team as of April 1 — reported that the current pandemic has led to a 30 percent decline in emergency room admissions at Rock Regional and increased costs associated with the acquisition of personal protective equipment.
“All of that drove us to the point where financing is needed,” Hicks said.
With that need, Hicks planned to come before the Sedgwick County Commission and Derby City Council asking for help in securing a five-year, $3 million loan that would provide short-term assistance to the hospital.
During the Sedgwick County Commission’s meeting on Wednesday, Hicks brought up the request, but a number of commissioners noted trepidation for a number of reasons — including the potential of setting precedent, the county’s own budget concerns and potential furloughs the county may have to take on itself due to the coronavirus pandemic.
“In all due respect, I cannot and I would not ever obligate taxpayers’ property tax money, general fund money — which you’re asking me to do — to support your hospital,” said commissioner David Dennis.
“There’s a chance here that we would support this and it’s not viable. That would be a horrible situation for taxpayers,” said commissioner Jim Howell.
Sedgwick County commissioners voted 4-1 to deny Rock Regional Hospital’s request to help secure a $3 million loan.
Following the county commission meeting, Hicks was set to present the loan request at a special meeting of the Derby City Council on Thursday. However, action of the county led Hicks to shift gears with the city council.
At the Derby City Council meeting, Hicks mainly spoke of the recent transition and new hospital management — including potential plans of how to get through the difficult stretch ahead.
Being a relatively new hospital (officially opening in April 2019), Hicks noted Rock Regional was close to the point of breaking even financially. There were some initial issues that had led to a slow start for the hospital, creating some financial stress, with the COVID-19 situation adding another wrinkle into operations.
“Things were moving along nicely, in all respects, and then the pandemic hit,” Hicks said. “When Sedgwick County put the stay-at-home order in place, things slowed down greatly. It’s put stress on the hospital.”
Hicks did not argue with the necessity of the stay-at-home order, but did state that forced some changes that have pushed back Rock Regional’s expected financial break even date to fall 2020.
Despite those hurdles, Hicks remains confident in the long-term viability of the hospital, noting “the elements of success for Rock Regional Hospital are obvious to me.”
After the action of the county commission on Wednesday, Derby council member Jack Hezlep questioned if the hospital had other funding plans or if that was forcing management to improvise.
Moving forward, Hicks said the hospital has already received funds through the Coronavirus Aid, Relief and Economic Security Act (as of Thursday) and the ownership group is seeking an additional $5 million loan through the Small Business Administration’s COVID-19 support efforts.
Projecting an optimistic return to normal business by June, Hicks said that should help the hospital get by.
“Times are tight right now,” Hicks said, “but we have a plan to fund the cash needs through the next few months.”