0920_September Comstock's Magazine September 2020 | Page 43

risk are what Jeffrey Johnson, Western
U.S. market leader for consulting firm
Wipfli, dubs “tweeners” — independent
facilities that serve smaller towns and
cities rather than major metro areas.
Dameron is one of those tweeners.
The hospital was losing money
pre-COVID — more than $18 million
in 2018, the last year for which state
data are available. So Dameron came
to an agreement last December to be
managed by Roseville-based network
Adventist Health as an interim step
to full acquisition by Adventist. That
would be good for Dameron’s long-term
viability since hospital networks have
more negotiating power.
Now the deal is in jeopardy. Wolcott,
who also oversees Dameron during the
transition, says the Stockton hospital
hasn’t issued any financial statements
post-COVID and doesn’t publish its
financials. But in April, Dameron’s revenues
fell by 40 percent as the hospital
stopped elective surgeries, Wolcott says.
The hospital was seeing the number of
those procedures start to come back in
early June when COVID-19 cases started
spiking again. That could mean another
drop in volumes. If the case spike goes
on another six weeks, “it could potentially
inhibit Dameron’s ability to
be successful in the long term,” says
Wolcott. “If we’re not able to get Dameron
turned around to the place where
Adventist Health believes it can be successful
over time, then Adventist Health
can’t afford to just acquire a failing hospital.
… Stockton could potentially lose
a community asset that provides choice
for half a million people.” (State listings
show six other hospitals in San Joaquin
County: Adventist Health Lodi Memorial,
San Joaquin General Hospital, St.
Joseph’s Medical Center, Sutter Tracy
Community Hospital, Doctors Hospital
of Manteca and Kaiser’s Manteca
Medical Center.)
At 125-bed independent Marshall
Medical Center in Placerville, it’s also
been a tough few months. Revenue
dropped 30 percent in March, says
CEO Siri Nelson. April was worse, but
May was not as bad as April. On April
7, credit rating agency Fitch Ratings
downgraded Marshall’s bond rating to
BB+, technically the highest junk bond
rating. Fitch cited a variety of factors:
a higher debt-to-cash ratio because
of planned building projects, a bigger
pension contribution and the impact of
the COVID-19 crisis.
Nelson points out that ratings agencies
also dinged big hospital systems
because of the pandemic. Two of them
downgraded Sutter Health’s bonds
in April, though they’re still A-rated.
Nelson is staying positive. “We’re used
to adapting,” she says. Still, she acknowledges
that it’s tougher not having
a “deep pocket like a big system” nor
being cost reimbursed like a smaller
critical-access hospital.
Several other small independent
hospitals in the region contacted for
Designed with care.
HGA.com
September 2020 | comstocksmag.com 43