Crawford County Memorial Hospital

Pictured is Crawford County Memorial Hospital.

Facing an uncertain financial future due to the ongoing COVID-19 pandemic that has caused activity at the hospital to decrease significantly, Crawford County Memorial Hospital (CCMH) has taken advantage of several loans and grants to improve the hospital’s financial outlook.

According to CCMH CFO Rachel Melby, CCMH has been doing only about 40 percent of normal business through the last half of March and most of April.

Without outside assistance, the hospital would begin to burn through cash reserves, which equaled about three and one-half months of operation as of the end of March.

CCMH applied for Paycheck Protection Program funds through Bank Iowa as soon as the program started, Melby said.

“We applied for two and one-half months of salary,” she said.

The hospital could and did also apply for funds to pay health insurance benefits.

The amount of the request was based on an average of monthly salaries in the last calendar year.

CCMH was awarded just over $3 million, which will be booked as a loan in April, Melby said.

At the end of eight weeks CCMH has to certify that wages and employment haven’t decreased more than 25 percent, which is a requirement of the program.

“In the middle of June we’ll certify our wages again and then it should be, for the most part, forgiven,” she said.

CCMH has not laid off any staff members, though several are on unemployment for personal reasons.

“We have not told anyone to stay home because we didn’t have work for them,” Melby said.

She said she anticipates that the $3 million Paycheck Protection Program loan will be forgiven in June.

“Then that will no longer be a liability on our balance sheet,” Melby said. “You’ll see that under our other income as grant income.”

CCMH also received $650,000 in a general distribution to all hospitals last week and another $10,000 this week that was a distribution based on 2018 net revenue.

The Paycheck Protection Program and general distribution funds will largely offset lost revenue, Melby said.

“We’re running about 40 percent of what we normally would, but we also don’t have as many expenses as far as surgical supplies and overall supplies throughout the hospital,” she said. “We’ll see how much our expenses come down in April and then we’ll have a pretty good idea what May will look like.”

She believes, based on preliminary numbers, that if the hospital has a loss this fiscal year it will be a slight loss.

CCMH President and CEO Erin Muck said the hospital’s loss could have been in the millions without the Paycheck Protection Program.

Hospital financials going forward will depend on what happens next with COVID-19, Muck said.

“If it settles down in the whole state, things open up and people are coming in for appointments and we can do surgeries again, that changes things,” she said. “But if we continue on our same trajectory, it’s a guess at this time.”

Melby said CCMH may receive additional federal funds at the end of this week.

“There was $10 billion set aside specifically for rural hospitals and rural health clinics, both of which we are,” she said.

CCMH should receive a portion of those funds based on the hospital’s operating expenses.

She does not know what the amount will be, but she expects it to be larger than the second general distribution of $10,000.

CCMH should also receive about $84,000 through the State of Iowa’s Hospital Improvement Program and another $5,000 through another state grant.

“And we continue to look for other small grant opportunities, as well,” Melby said.

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