Coos Bay, Ore.-based Bay Area Hospital would likely have to close down if a $47 million loan was called in by Bank of the West, the hospital's CFO told the Lund Report April 11.
Thankfully, the bank has not yet done so even as it has raised the interest rate on the loan to the 172-bed hospital. The bank and hospital officials are meeting regularly, CFO Mary Lou Tate told the publication.
"If Bank of the West did call the note due and payable, which is in their legal right, the hospital probably would not survive that call," she said.
As a government-owned entity, the hospital can seek voter approval to levy taxes on local property owners, but it has not done so for 40 years, Ms. Tate said. Given the hospital's financial circumstances, it may either do that or merge with a bigger chain.
For now, the goal is on independent survival with a target of boosting revenues by about $22 million while cutting expenses by $12 million. In May 2022, the hospital ended the contracts of 56 temporary staff and said it would close its behavioral health center to inpatients to help cut costs.
The eventual goal is to reach an operating margin of 3 percent to 5 percent, Ms. Tate told the Lund Report.
"That would be a good spot to be at," she said. "But it will be very challenging to get into that range."