Juneau’s hospital is bleeding cash. City leaders are considering cutting services to stop it

Bartlett Regional Hospital Board President Kenny Solomon-Gross talks during a meeting with the Assembly on Wednesday, May 29, 2024. (Clarise Larson/KTOO)

Bartlett Regional Hospital is in a tough spot. It’s facing a $7.5 million budget deficit for the next fiscal year, and will have to dip into savings to cover the shortfall. But its board says that’s not sustainable.

Max Mertz, the hospital board’s finance committee chair, explained how the hospital got into such a hole — and what it will take to get out of it — during a joint meeting between the board and the Juneau Assembly Wednesday night.

“We have three years of cash left from today before we’re closing the doors, essentially. We’re not able to make payroll without a significant adjustment to the way that we’re operating,” he said. 

Mertz explained that the hospital’s budget crisis didn’t happen overnight. Since 2019, it hasn’t been making enough money to cover its costs. And since mid-2020, it’s actually been steadily losing about $1 million a month.

Hospital leaders attribute that loss to higher labor costs, temporary pandemic relief funding drying up, staff and leadership turnover and low insurance reimbursement rates. Efforts in the past to correct course – like hiring restrictions and overtime reductions — just haven’t been enough. 

“We’re left with very stark choices about how we want to move forward,” he said.

Now the board is considering cutting or reducing “non-core” services that are draining money — things like the Rainforest Recovery Center, Home Health and Hospice, crisis services and support for children with autism.

The board said cutting services will be the last resort – and they’re trying to find ways to subsidize the programs via city dollars, handing them over to other providers, or any other creative efforts to get out of the red. 

But, nothing is off the table at this point. Board President Kenny Solomon-Gross said that in the coming weeks, the board will host public meetings and ask for input from the community.

“One of the best things about having a community hospital that we all own, is we as a community get to choose what services we want for us,” he said. 

At the meeting, a handful of residents and hospital staff were there to advocate for some of the services potentially on the chopping block. 

Juneau resident Mary Alice McKeen said that Home Health and Hospice provides critical services that need to continue. Bartlett began offering the services last summer, taking over the role after Catholic Community Services stopped providing it in 2022. 

The home health program gives intermittent in-home care for people in recovery from an illness or surgery, and hospice is for patients who have a life expectancy of six months or less. McKeen says both are needed.

“I can’t imagine a city of 30,000 people not providing  — as part of its health care system — hospice care, and it’s inconceivable to me that we would go back to where the only option people had was dying in the hospital or dying at home without expertise or without help,” she said. 

Mertz says those programs are expected to lose a combined $1.3 million next fiscal year.   

Testifiers said the Rainforest Recovery Center’s services also must continue.

Bartlett has operated the substance misuse treatment center since 2000, but it’s been steadily losing money as grants and tax revenue have run dry. Next year, the hospital expects it to lose close to $800,000.

Jeni Brown said cutting the center would affect more than just people in Juneau.  

“I’m here to advocate that these services are vital to everybody in Southeast – everybody in Alaska. This is needed — this is needed to save people,” she said.  

She said Juneau is a regional hub for services like these for other communities in Southeast Alaska that don’t have them. And, for Juneau residents, it means they can get treatment faster and don’t have to travel to places like Anchorage or Seattle.

Brown said as someone who once struggled with addiction and was formerly incarcerated,  services like these mean people struggling with addiction have a fighting chance — and they’re why she’s alive today. 

“This is something that needs to stay open. This is survival for some of us. This is the resources we need to be able to take the next step to come back into the community,” she said. 

Residents testified in support of other programs, too, like the adolescent and adult crisis services. 

Assembly members shared little about their opinions on what services should be prioritized. Mayor Beth Weldon said she’s interested in hearing what the community thinks.  

The public will be able to provide testimony on the process at upcoming meetings on June 4 and June 10 at the hospital campus. Public comment can also be submitted electronically or via mail until June 19.

The board is expected to give a final recommendation in late June on how to move forward. Mertz said it’s important that the board gets community input before decisions are made, but noted that they need to move quickly.

“We don’t have time to kick the can down the road, we just don’t have that time,” he said.

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