When Stephen DelRossi joined Northern Inyo Healthcare District in 2022, one thing was apparent.
"My first board meeting, I walked in and said, 'Hi, my name is Stephen. Here's the finances, and oh, by the way, we're going to be bankrupt in 12 months,'" he told Becker's, adding that it took time to fully convince the board that the organization's finances needed to be addressed.
Mr. DelRossi is CEO of Northern Inyo, a healthcare organization that operates a 25-bed critical access hospital in Bishop, Calif. He joined the organization in August 2022 as CFO before assuming the additional role of interim CEO in May 2023. In November 2023, the NIHD board of directors elevated him to permanent CEO, leaving his dual role as CEO and CFO intact while the organization began recruiting for a permanent CFO.
Since Mr. DelRossi began his tenure, he focused on improving the hospital's financial picture. Specifically, he noticed a need to boost revenue, reduce non-staff expenses, and ensure efficiency in terms of handling of supplies and waste or distribution processes.
"How do you fix that? That became the question," he said.
He realized part of increasing revenue involves ensuring patients receive quality services and care, then billing correctly for that service.
To improve revenue cycle management, Northern Inyo brought in new hires to boost the collection rate.
Mr. DelRossi said he also sought to grow existing services. For example, he asked a cardiologist who was conducting basic heart exams, "What can you do to increase revenue streams?"
"He thought about it for a month or so," Mr. DelRossi said. "He was only coming in three days a month. He returned and told the medical committee, the chief medical officer and me, 'I can do XYZ [procedures or services] in addition to what I'm doing, and it pays much higher.'"
Northern Inyo then engaged the community, asking, "What do we need?" and assessing which services would create the best contribution margin.
"We also asked, 'What do we not need?' That was the first part of the turnaround — revenue," Mr. DelRossi said.
The second part of the hospital's turnaround involved labor and other expenses. Northern Inyo increased average payroll for employees by about 27%.
"You ask, 'How can you do that?' Well, we were using about 65 contract full-time equivalents. We figured if we cut employees, we could offer raises. The union said 'yes' when we explained and showed them the reasoning," Mr. DelRossi said.
The hospital's total personnel costs — employee salaries, hourly wages, overtime and benefits — grew by 14% but decreased significantly when measured per adjusted patient day.
"We also addressed benefits, retirement contributions and cost control for medical, dental and vision," Mr. DelRossi said. "We funded 100% of everyone's retirement, which is unusual nowadays, but we adjusted this so employees shared costs, and the union supported it after reviewing the numbers."
About 75% to 80% of Northern Inyo's staff are unionized.
On the non-labor expense side, Northern Inyo reviewed and renegotiated contracts. For example, it saved 10% on a $1.3 million GE Healthcare contract "after proving we were serious about finding new vendors," Mr. DelRossi said.
"Improving reputation, maintaining high-quality service, capturing revenue and controlling expenses are essential for success," he added. "We're fortunate to serve a service desert with a captured population, but keeping patients in town was also key."
Still, he acknowledged room for improvement, particularly in administrative functions such as registration and billing, which can affect reputation and patient satisfaction.
"We have more work to do, but we've made significant progress," Mr. DelRossi said.
Northern Inyo ended fiscal 2024 with a net income gain of around $4 million and an operating loss of a few hundred thousand dollars. Over the two-year period, the district saw a $17 million turnaround, strides that Mr. DelRossi attributed to efforts made by the staff and leadership. For 2025, the hospital expects $5 million growth, around 2.5% to 3%, while holding expenses flat.
Improving community relations and business development are also part of the hospital's strategic plan. That means ensuring the right leadership team is in place.
In October, Northern Inyo promoted Chief Human Resources Officer Alison Murray, who is now also chief business development officer, and Interim Associate Financial Officer Andrea Mossman, who now serves as CFO.
"Getting the right people in the right roles at the right time is crucial," Mr. DelRossi said. "We emphasize the five rights: right person, right place, right time, right training and right attitude."