New local hospital seeks financial help from county, Derby due to coronavirus stress
A new hospital in Derby is seeking $3 million in loan guarantees from Sedgwick County and the city of Derby to try to right itself financially amid the coronavirus pandemic, according to hospital and county officials.
With finances stressed by delays in setting up government health care payments — and then depressed patient counts due to the threat of COVID-19 — Rock Regional Hospital is asking the county and Derby to act as guarantors for $3 million of a $5 million bank loan the hospital is applying for, officials said.
“That pursuit (of that loan) would be made easier with some guarantees . . . so that’s what we’re doing,” said Kevin Hicks of CABE Consulting, a Leawood firm that is managing the hospital.
CABE recently assumed control of the hospital from Candor Healthcare, the management company that ran the hospital since it opened, said Jim Howell, who represents Derby on the Sedgwick County Commission.
The 40-bed hospital has seven Intensive care beds, which could be expanded to 12 if necessary, Howell said.
The hospital started taking patients in April of last year and was fully opened in August.
In recent weeks, the previous management laid off approximately 30 employees and closed the intensive care unit, Hicks confirmed Monday.
“As the new management company, we are making some changes to that . . . to be able to have ICU capabilities,” he said.
Rock Regional, at 3251 Rock Road, Derby, is about 10 miles southeast of downtown Wichita.
Ideally, any COVID-19 patients would be treated at Via Christi and Wesley hospitals in Wichita, with the Derby hospital playing a secondary role, Hicks said.
“The biggest role for a hospital like ours is to take care of the non-COVID-19 patients,” he said. “Our role in this is to be supportive of the larger hospitals with the greater capabilities.
“If necessary, if overflow is needed, then we’ll have that capability, but we should not be the primary first responder to COVID-19 patients. But we still need to have the capability to do that as part of this overall plan.”
Just about all hospitals have seen a decline in emergency room visits during the pandemic, he said. That’s been especially hard on Rock Regional because any new hospital gets most of its patients from emergency-room referrals until it has established itself in the community.
“So the first thing to hit with the COVID-19 virus was people stayed home, they didn’t go to the hospital, they didn’t go to the emergency rooms,” he said. “If not for that, we would not be making this request (for loan guarantees).”
That came on the heels of unanticipated delays in payments for patients covered by government health plans, Hicks said.
“Any new hospital is going to have a ramp-up period, obviously, and that’s what they’re experiencing,” he said. “There were some delays in getting Medicare reimbursement and the managed-care reimbursement beyond what was projected. Those things occur, just natural delays in getting certain things in place, so that hindered the startup.”
The matter is scheduled to be discussed at Wednesday’s regular meeting of the County Commission and a special meeting of the Derby City Council on Thursday.
Howell said he needs to know more about the terms of the hospital’s proposed loan agreement before deciding how to vote on whether to guarantee it.
“It might just be a discussion, it might be trying to get some more data, it’s possible there might be some kind of a vote to approve or deny this request, but I believe right now the agenda item is a discussion,” Howell said of the county meeting.
Commissioner Michael O’Donnell, who represents the district adjacent to Howell’s, said it’s kind of a quandary for the commission and, like Howell, he has questions about the long-term plan.
O’Donnell said the county can ill afford to lose any ICU beds and ventilators right now, but also has to maintain fiscal responsibility long-term.
“We need to make sure we keep that (ICU capability) up and running,” he said, but at the same time he wants to avoid “throwing money at a hospital that’s not going to be viable.”
Health care south of Wichita had already taken a hit amid the COVID-19 pandemic when Sumner Community Hospital in Wellington abruptly closed March 12.
That canceled numerous appointments and left patients scrambling to find other ongoing care options. All the community’s ambulance emergency cases have to be rerouted to Wichita hospitals for the foreseeable future, Wellington City Manager Shane Shields said.
Sumner Hospital had been in operation since at least the 1950s and was the sixth rural hospital to close in Kansas since 2010, records show.
The others include: Central Kansas Medical Center of Great Bend, Horton Community Hospital, Mercy Hospital of Fort Scott, Mercy Hospital of Independence and Oswego Community Hospital, according to a list compiled last year by Becker’s Hospital CFO Report.
This story was originally published April 7, 2020 at 1:20 PM.
