Delta Health saw nearly $30 million in operating losses and the resignation of its chief executive officer and chief financial officer between 2019 and 2023.
Fears around the health system’s finances only grew after it had to return $7 million in advance Medicare money received during the pandemic, nearly depleting its remaining cash reserve.
According to its new CEO and CFO, Jonathan Cohee and Elizabeth Lee, this year’s net revenue will most likely end in the black, even with all the challenges posed along the way.
“Not only have we been able to survive, but thrive, grow, expand and innovate,” Cohee said. “That’s a good year.”
Cohee joined Delta Health as the chief operating officer in November of last year before being promoted to CEO in July. Lee began her position as CFO in June.
Before them, Julie Huffman and Kelly Johnson acted as the interim CEO and CFO.
AN EYE FOR OPERATIONS
According to Cohee, the apparent comeback is primarily due to an emphasis on operation oversight, finding ways to make daily procedures and systems as efficient as possible.
He said that while the quality of care has always been a strong point for Delta Health, there were few ways to monitor inefficiencies and how they could be improved. By correcting those inefficiencies, more patients can access care, leading to more revenue in the long run.
“If you look at those metrics on a daily basis, you can have an anomaly, but by the second day it’s off, you (wonder), ‘What’s driving this?’” Cohee said. “A hospital that doesn’t track those things, typically they’re a hospital that’s just running by chance.”
Other administrative decisions include creating a senior revenue cycle director position and a patient access manager role. According to Cohee, improvements to patient access alone have led to an overall increase in patient volume of 5.2%, which will add $7-9 million to their bottom line by the end of the year.
He added that operational efficiencies are especially important to make up for the local health services that aren’t financially viable in the first place.
Jace DiCola / The Daily Sentinel
Delta Health Chief Executive Officer Jonathan Cohee, left, and Chief Financial Officer Elizabeth Lee said they have high hopes for the health system’s sustainability and ability to serve Delta and surrounding communities. The two entered their respective roles earlier in the summer, more than a year after the former CFO’s resignation revealed multi-million dollar operating losses.
“Labor and delivery is a perfect example. I love labor and delivery, and they do a great job, but it doesn’t pay for itself,” Cohee said. “So, if you don’t have other departments keep the lights on by being efficient, you can’t have the other services.”
“You can’t have the primary care clinics and you can’t have labor and delivery. Those are the lifeblood of the community.”
According to Cohee, the fruit of those efforts is already apparent, as their monthly operating revenue has consistently trended upwards since November of last year. Their most successful month so far was in July when Delta Health yielded a 5.8% revenue.
He added that their yearly margins won’t be nearly as high because a majority of that revenue will be invested back into the health system.
“I could war-chest all my cash and not expand any services or do anything to facilities,” Cohee said. “Then, I have a 7% margin, but guess what? I lost this service, I lost that service and next year, I’m not set up because we didn’t provide these innovations.”
MUTUAL INVESTMENTS
Lee added that aside from investing in Delta Health’s direct services, the revenue allows them to re-invest in the staff and community that saw them through the fiscal fears.
“We’re also taking care of our staff and creating jobs for our community,” Lee said. “We’re doing market adjustments for the nurses (and) clinical ladders.
“Yes, that’s going to cut into our margins, but they’re important things that we need to do.”
That investment into the community mirrors the continued investment from Delta residents and state funding that aided in Delta Health’s recovery. Before the financial fallout was revealed, Delta already had a mill levy on property taxes that contributed about $325,000 a year to the provider.
Since learning of the increased financial strain, Delta residents passed a 0.8% sales tax in 2022. The sales tax will remain until 2030, and the proceeds will go directly to the hospital district. According to Cohee, that sales tax yields about $300,000 a month or about $3.8 million a year.
According to Delta Health Public Information Officer Darnell Place-Wise, the administration is especially grateful for the support because the sales tax was passed only two years after a separate tax increase for the Sheriff’s Office and police department.
Delta Health Hospital, located at 1501 E 3rd St., is one of the health care system’s primary buildings. Delta Health Chief Executive Officer Jonathan Cohee said that substantial improvements to patient access and use will play a significant role in the health system’s sustainability.
“That’s a testament to how much they love and value what Delta Health brings,” Place-Wise said. “They want us to stay independent, and they want us to stay here. It wasn’t a random tax increase, they voted this in, which is huge.”
Delta Health also received $650,000 from the Colorado Rural Provider Access and Affordability Stimulus Grant, which will allow for an upgrade to the hospital’s electronic medical records system. Cohee said the upgrade will lead to further operational improvements down the line.
STABILITY THROUGH A STORM
Cohee said that another sign of Delta Health’s stability is how they have weathered several storms over the last year. One of those ‘storms’ was the Change Healthcare cyber attack that occurred in February and lasted through May.
Change Healthcare processes medical claims for many providers nationwide, allowing them to bill and be reimbursed by insurance companies.
After Change was hit by ransomware, health providers could no longer use the software to receive payments and submit medical claims. The only options left to providers were manually processing each claim or taking the financial losses until the software was operational again.
“You had healthcare systems scrambling and trying to get emergency loans…But, we never had to have help,” Cohee said. “If you want to put a pulse check on where the organization is, it weathered that storm from February through May with a significant reduction in revenue, and we didn’t miss a beat.”
According to Cohee, weathering a reduction in revenue like that would have been much more difficult a few years ago when paying staff was enough of a challenge. Now, the health system is solvent enough that they made a $920,000 bond payment last week – all in cash.
“You’re talking about an institution that back in late-22, early-23, had negative four days cash on hand and Covid money they had to pay back. (A few) days ago, we paid a $920,000 down payment and didn’t blink.”
LOOKING DOWN THE ROAD
Cohee and Lee added that their efforts will not end once Delta Health is fully stabilized; in fact, they are already expanding services, solidifying its place in the community and transitioning from reactive to preventative care.
Recently, Delta Health acquired a primary care clinic in Cedaredge, debuted an at-home physical therapy service, obtained a new orthopedic practice, re-opened an urgent care that closed more than two years ago and partnered with Intermountain Health to open a cardiology center.
“We’re setting ourselves up for next year to be an even better year, but this year, we’re able to look back, smile and say, ‘Look what we did: we didn’t shrink in services, we added services; we didn’t lose any independence, we gained independence and created some nice partnerships.’”
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