COVID-19 has been a bit of a non-event so far at Sky Lakes Medical Center in Klamath Falls. With just 22 confirmed cases in all of Klamath County, Sky Lakes hasn’t had more than two COVID-19 patients at a time.

The predicted public health crisis has instead morphed into a financial crisis for Sky Lakes and many of its peer hospitals in small-town Oregon. Between the ban on elective surgeries and the state’s stay home order, some rural hospitals’ revenue has plummeted 60%.

“All the while we’re trying to retain a full staff to be ready for COVID-19,” said Paul Stewart, Sky Lakes CEO. “The result for us is a $5 million-a-month hit.”

Oregon hospitals went to Gov. Kate Brown this week seeking $200 million in public assistance to see them through their financial squeeze.

“While we are doing all we can to maintain the necessary workforce to serve our communities, hospitals cannot weather this storm without direct financial support,” the Oregon Association of Hospitals and Health Systems said in an April 6 letter to the Governor.

Lori Coyner, of the Oregon Health Authority, said many smaller hospitals were living near the edge even before COVID.

“The hospitals I talked to say they can make it until June,” Coyner said. “It does involve having to make cuts. I talked to one hospital that eliminated its cafeteria. Some are laying off employees.”

For its part, the governor’s office isn’t saying much.

“We are in the process of reviewing, but don’t have any decisions to report today,” Brown spokeswoman Liz Merah said Tuesday.

The hospitals may be fighting an uphill battle. The economy’s descent into sudden recession will cut deeply into tax revenue and reduce discretionary spending. Hospitals will have to join schools and other public services, and many other private industries, seeking assistance.

The state has already made some moves to help shore up the hospitals. Last month, Oregon directed the network of coordinated care organizations, which oversee Medicaid funding in Oregon, to move up payments of funds owed to hospitals from June to March.

In addition, the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act Congress approved last month includes $100 billion for a hospital stabilization fund. Little is known at this point how the $100 billion will be allocated. It is equal to $106,000 for every hospital bed in the country.

It’s hard to overstate the significance of Sky Lakes Medical Center in Klamath Falls and in southern Oregon. It is the only full-service hospital within a 75-mile radius. It is the largest private employer in Klamath County, with more than 1,500 on the payroll.

It earned $16.6 million on total patient revenue of $626.6 million in 2018, according to the most recent data available.

When the call came, Sky Lakes fought to get prepared for the COVID-19 surge.

It agreed to eliminate elective surgery in order to devote more resources to virus.

It scrambled to find adequate personal protective equipment for its caregivers and remains short on key items like N-95 respirators.

It opened a testing site in one of its parking lots. It erected two military-style tents near its emergency room, doubling its capacity.

Sky Lakes even identified 250 support staffers who could be trained to support the frontline caregivers.

And now they wait…and wait.

In the meantime, the hospital is largely empty. Outpatient volume is down 80% and inpatient volume has declined 60%, said Sky Lakes spokesman Tom Hottman.

Not only are the hip replacements and other elective surgeries gone, even the emergency department is abnormally quiet. The stay-home decree has led to fewer recreational injuries, said Becky Hultberg, president and CEO of the hospital trade association. And even those who do hurt themselves often choose to gut it out rather than risk a visit to the emergency room during a pandemic.

The abnormally quiet wards at Sky Lakes equates to losses of $5 million a month, Hottman said.

Elsewhere in Oregon, hospitals are cutting back. Sky Lakes has refrained from wholesale layoffs. But it is asking employees to take time off.

Hottman acknowledged that financial help at this point to hospitals may be hard to accept for others whose businesses and livelihoods were eliminated by executive fiat. On the other hand, he said, everyone needs a functioning hospital, particularly now.

“All businesses are hemorrhaging,” he said. “But do you really want those that you depend on most to go down?”

Jeff Manning

503-294-7606

971-263-5164

jmanning@oregonian.com