Crittenden Regional Hospital in West Memphis will close Sept. 7, despite voters’ recent approval of a county sales tax to help keep the doors open.
The hospital informed its some 400 employees this morning and also said it would accept no new patients after today.
County Judge Woody Wheeless said, “It’s a major blow to this community.” But he said the hospital had long been struggling and the six weeks it went without revenue after a devastating fire was “the last nail in the coffin.”
A county sales tax was to take effect Oct. 1 and begin providing money to the hospital by Dec. 1, but promise of that money wasn’t enough to stave off the closure, Wheeless said. He said had power as county executive to prevent the tax from taking effect and he planned to do so.
The hospital was already struggling on account of a declining patient load when it was closed temporarily by a devastating fire. In late June, Crittenden County voters approved a one-cent sales tax to help keep the doors open. But word began circulating today on social media that the hospital would close and the hospital has issued a prepared statement that I’m seeking.
Wheeless said there are no plans for even a smaller clinical operation in the facility, which had operated in cooperation with Methodist Le Bonheur Healthcare in Memphis.
UPDATE: The hospital’s news release follows:
WEST MEMPHIS, Ark. – (August 25, 2014) – After exploring all possible options with legal and financial advisors, the Crittenden Regional Hospital Board of Trustees and leadership have made the difficult decision to halt all operations at Crittenden Regional Hospital (CRH) and permanently close the facility’s doors, officials announced today. The hospital will stop admitting patients effective August 25, 2014, and close the hospital permanently on September 7.
Change is occurring at every hospital in the nation, and nowhere is it having a greater impact than on rural hospitals such as CRH. Long before recent health reform measures, the decline was already growing. In 1992, there were 2,285 rural hospitals; by 2012, that number had fallen to 1,980. Since the start of 2013, 27 hospitals have ceased operating.
The challenges of a struggling economy and continued declines in patient volume and reimbursement over the last decade have placed mounting financial pressures upon CRH. The hospital’s financial struggles were further compounded by a significant number of physician departures and two recent fires, the most significant of which shut down the facility for more than six weeks. Even the expansion of Medicaid in Arkansas and impressive enrollment rates in the Private Option by citizens in the service area were not enough to overcome these issues.
Over the last five years, the CRH Board and leadership executed a number of initiatives to preserve the acute care hospital, services and jobs. These initiatives included a nationwide search for a hospital or health system partner or buyer, attempts to secure additional sources of new capital, recruitment of physicians and implementation of service enhancements. Ultimately, these initiatives were not enough to overcome mounting financial pressures. All options exhausted, the CRH Board and leadership was left with no other choice but to close the hospital.
“We are deeply saddened to have to make this decision after all the attempts that have been made to preserve the hospital for our community,” says Gene Cashman, CEO of CRH. “With counsel from national healthcare consulting firms and the passage of a county-wide sales tax, we had identified a long-term strategic plan that had set our organization on a path to improvement. This summer’s fire, and the subsequent shutdown, derailed that plan’s success.”
In June, residents of Crittenden County approved a one-percent local sales tax increase in hopes of getting the hospital out of debt. Collection of the tax will not begin as scheduled.
“The sales tax campaign was a tremendous testament to the community’s support for Crittenden Regional and we are thankful for that,” says Board of Trustees Chairman David Rains.
“Unfortunately, the fire decimated our cash position. We are not able to finance our operations until December when the tax revenues would have been received.”
In addition to the hospital, CRH clinics and home health/hospice services will cease operations September 5. In the interim, CRH physicians and staff will continue serving current patients to ensure they receive quality care and treatment until they are discharged or transferred to another nearby healthcare facility or agency. Until the closing date of September 7, CRH intends to provide stabilizing emergency department services, but will not admit new patients.
Hospital leaders are reaching out to healthcare organizations who may be willing to consider the possibility of keeping key physician services in the area, and for opportunities for displaced employees.
“Crittenden Regional has been home to many dedicated, talented physicians and employees, who have served patients and their families here in Crittenden County for the past 60 years,” Cashman says. “We are grateful for their service and will make every effort to help them find new employment close to home.”
The employees’ pension plan is covered by a federal insurance program run by the Pension Benefit Guaranty Corporation (PBGC). After the closure of the hospital, PBGC is expected to terminate the pension plan, take it over, and pay the benefits under the plan, without interruption subject to legal limits on the guarantee. Most participants of a pension plan insured by PBGC receive the full benefits that they are entitled to when a plan terminates. Further information about PBGC is available at www.pbgc.gov.