NIHD news release

Northern Inyo Healthcare District is undergoing staff reorganization as the direct result of a shortfall against projected revenues in its 2018-2019 budget. The three-phase restructuring began Friday, Jan. 18.

District leadership, faced with a $1.2 million shortfall against its projected revenues, felt it was necessary to make milder adjustments now rather than be faced with more drastic changes in next year’s budget.  

Chief Executive Officer Kevin S. Flanigan, MD MBA, stressed the District is early enough in its projections that small changes can have a big long-term impact. “If the District waits until the next budget year, the District will have to both make up for this year’s deficit and cut to prevent another deficit year,” he said.  

Dr. Flanigan also stressed that deficit is against budget projections and is not currently a situation in which current expenses are exceeding current revenue. He noted, however, that if something is not done now, this could very quickly become a matter where revenue does not cover costs.

The reorganization calls for a hiring freeze for all non-clinical positions, a re-alignment of responsibilities among these departments, a reduction in non-clinical workforce, and the potential for an offer of early retirement where possible. These changes, to be clear, do not affect any health care providers or clinical staff. These changes affect support staff in administrative areas.

“This move does not mean the District is in financial trouble from a cash-on-hand basis,” Dr. Flanigan said. “We currently can pay our bills, and our expenses are matching what we budgeted. However, we are experiencing fewer surgeries and fewer hospitalizations than we projected.”

A reduction in hospitalizations was anticipated, just not to the degree NIHD experienced in the first six months of its fiscal year.

“As people will recall, the District was moving toward a care model that emphasized improved health rather than critical illness,” Dr. Flanigan said. “We’ve seen an increase in our outpatient clinic visits. Our Emergency Department visits are consistent with budgeted numbers even with the addition of our Same Day Care services. Our transfers out of the area are only up slightly while our surgeries and hospital stays are down markedly. This means that the improved outpatient access and our focus on improved service have kept people healthier; thus less likely to need surgery and less likely to have to stay overnight in the hospital.  However, this also means that the District is receiving less revenue.”

Dr. Flanigan said District leadership has met with staff members during the past few days outlining in detail the current situation, including plans for moving forward. As always, Dr. Flanigan maintains an open-door to those staff who may wish to meet with him privately.