A change in the way levy revenues are distributed and new revenue opportunities will keep WhidbeyHealth afloat, officials said during a hospital board meeting Thursday.

Interim CEO Michael Layfield spoke optimistically at his first board meeting after nine days on the job.

“I believe there’s a lot of hope that we can not only survive but we can thrive,” he said. “That’s my gut feeling coming in.”

Layfield also said some changes may be difficult in the public hospital district. He explained officials are looking at profit and loss statements in every department. He warned that some departments and services may have to be suspended, though he said the hospital will prioritize cutting medical services that are available elsewhere on the island or nearby areas “whenever possible.”

“If we have to suspend some services, it will be painful,” he said. “There will be pain, but it’s what we have to do.”

At the same time, he said employees deserve better wages, pointing out that turnover has a high cost.

Hospital officials outlined a number of ways that the hospital has improved its financial situation, which is a big change from a couple of weeks ago when board members asked Island County commissioners to co-sign a short-term bridge loan.

Interim Chief Financial Officer Jim Childers said a new cash flow forecast shows the hospital will be able to cover payroll and other expenses for the next few months. He said the hospital had a “really strong” January and made $374,000, though he said revenues are buoyed by tax levies.

Childers said county Treasurer Wanda Grone agreed to distribute levy tax revenues on a more immediate basis — as people pay their property taxes — which he said will be a great help to the hospital. He said the hospital has already received $924,000 for its three levies.

Grone explained that she agreed to make a one-time exception for the hospital to help it get through the financial crisis. Normally levy revenues are distributed on a monthly basis, she said, but she agreed to do it on a weekly basis for a few months. Most of the money comes in April 15-20, she said.

The hospital received about $7 million a year in its maintenance and operations levy, about $3.6 million for its bond service and $6 million for the EMS levy.

Childers thanked Island County Commissioner Janet St. Clair as well as local lawmakers for helping with the state Health Care Authority. He said the hospital should be receiving $615,000 in money that the hospital is owed in connection with reimbursements costs for ambulance services.

In addition, state lawmakers established an $8 million appropriation for distressed hospitals that officials hope to receive July 1.

Childers said the hospital also may be able to delay repayment of a $9 million advance it received from Medicare during the pandemic.

Layfield said the hospital has the opportunity to make $3-$5 million a year from swing beds, which is a service that rural and critical access hospital can provide. It allows a patient to transition from acute care to skilled nursing care without leaving the hospital.

Layfield said he and HealthTechS3, the hospital’s management services firm, are also looking into billing. He said he’s heard that bills have been coming to patients as much as a year after the service, but he doesn’t know if it’s a widespread problem yet.

Board President Ron Wallin said a firm the hospital contracted with to handle accounts receivable hasn’t worked out.

Despite the good news, Childers said the hospital is still looking into borrowing money as a “bridge” later in the year. He said the hospital might be able to refinance its bond and draw money from that.

At the end of the meeting, Mary Engle, former county assessor and current planning director, expressed concern that hospital officials were misunderstanding the levies. She pointed out that hospital officials spoke about getting $16 million in levy funds to pay bills, while in fact only the $7 million maintenance and operations levy can be used for that purpose. Of that, the board had promised that $6 million from the levy lift would go toward new spending for things like improving wages and technology.

Childers, however, said afterward that Engle was mistaken and that the different levies are separated in financial statements and each fund has accrued separately. In regard to the levy lift, he said the new spending will have to wait for the hospital’s finances to improve.

The board members all expressed appreciation for Layfield and Childers for the work they’ve done to right the ship.

Commissioner Nancy Fey said the board was frustrated in the past with not being able to accomplish things, but that has changed for the better.

“We’re getting an education on what we really should have been doing but weren’t getting the right data,” she said.