By By GREG KATSKI
Community Editor
BELHAVEN — Pungo District Hospital might be in better financial standing than Beaufort County Medical Center, but that could change with a rising amount of bad debt and state cuts to Medicaid, according to hospital officials.
Last year, the hospital accumulated $1.2 million in bad debts, according to Dr. Mark Beamer, chief of staff at the hospital. Ken Ragland, chief executive officer of the hospital, said the bad debt is a product of the Great Recession.
As people in the hospital’s service area lost their jobs, many also lost their health-care coverage. In turn, patients — without the ability to pay — started flooding the hospital’s emergency room for care, Ragland said.
Bad debt aside, he is worried about the effect Gov. Beverly Perdue’s budget plan could have on the not-for-profit hospital. Pungo District Hospital is classified as a critical-access hospital, which makes it certified to receive cost-based reimbursement from Medicare, according to the Rural Assistance Center’s Web site. As of July 2009, there were 1,305 certified critical-access hospitals located throughout the United States, including Washington County Hospital in Plymouth, Chowan Hospital in Edenton and Bertie Memorial Hospital in Windsor.
The governor’s plan calls for saving $35 million through eliminating what she called Medicaid fraud, waste and abuse, and revamping the state’s program to provide in-home personal-care services for Medicaid patients.
“The big problem I have is with the North Carolina state budget and the amount of money being taken away from Medicaid,” Ragland said. “It’s not only affecting hospitals, but physicians, too. They’re not getting paid the same.”
He said there are many people in the hospital’s rural service area, including Belhaven, Pantego Township and the Hyde County mainland, that are on Medicare or Medicaid because of a lack of job opportunities or underemployment.
About 40 percent of Belhaven’s population lives below the poverty level, according to Town Manager Guinn Leverett.
The hospital is getting less money through patient services as people try to hold onto their money until they absolutely have to see a doctor, Ragland said. According to Beamer, reimbursements through Medicare also have declined.
“What I have seen is people being more cautious with their money,” Beamer said.
That has led to more empty beds more often in the 25-bed hospital.
“A prime example of how this recession has affected us: We still have the same number of doctors, same number of departments, haven’t done anything differently from eliminating services, yet we have seen a downturn in utilization on the outpatient and inpatient side,” he said.
Ragland said the hospital has taken measures to reduce costs without eliminating positions.
“That’s not to say that’s the way it will always be,” he added.
Pungo District Hospital also has looked at becoming an affiliate of a larger health-care system such as University Health Systems, which services Bertie Memorial Hospital, a critical-access hospital.
“There’s always a discussion, but not yet. We’re just looking for ways to strengthen our position,” Ragland said. “It is very unusual to find a small, rural hospital in a standalone position without ties to a larger facility.”
Beamer said the hospital is in renewed negotiations with different contractors.
Besides patient services, the not-for-profit hospital generates revenue by obtaining state and federal grants and through its fundraising organization, the Pungo District Hospital Foundation.
The foundation is made up of volunteers, and it includes 15 board members. The foundation organizes annual fundraisers for the hospital, events like the Lucky Duck Regatta, summer dinner dance, silent auction and Stars of Hope Christmas tree-lighting ceremony. The majority of money raised through the foundation helps pay for equipment upgrades at the hospital and scholarship funding.
Arden Root, executive director of the foundation, said, “We can only help so much.”
Root also writes grant applications for the hospital. She said that grants have been harder to come by since the recession hit.
“Grants have been a little bit tougher,” she said. “Part of what’s different about grants now, as opposed to say a few years ago, is most foundations want grant money for programs rather than equipment. In a small hospital like this, equipment is the chief focus.”
Beamer summed up the hospital’s financial situation in three words: “We are struggling.”