An increase in expenditures related to the COVID-19 pandemic has sent the WhidbeyHealth hospital district into the red zone.

The hospital is paying the price for prioritizing patient care over financial health, WhidbeyHealth CEO Ron Telles told the public hospital’s board of commissioners during a meeting Feb. 10.

As of last week, the district had negative 1.7 days of cash on hand for operating expenses.

“We are in a cash poor situation, no doubt,” Telles said.

WhidbeyHealth Director of Finance Jennifer Reed explained during the hospital’s board of commissioners meeting that 2020 was an expensive year. The hospital had about $3.5 million less “in the bank” than at the beginning of the year.

Much of the money was spent on capital expenditures, such as the start-up cost of the new Clinton walk-in clinic, which totaled nearly $400,000. Other expenditures included a retail pharmacy and the purchase of property.

The new walk-in clinic saw an increase of patients every month since it started.

Overall, the hospital district had about 13,000 primary care patients.

Reed said almost $800,000 was spent on health care workers responding to the COVID crisis.

“Everybody knows 2020 was quite a ride,” Reed said.

Reed said she has submitted a grant requst to FEMA for reimbursement of 75 percent of allowable expenses relating to COVID-19. That total amounts to just over $1.6 million so far.

Telles emphasized that the hospital district made an effort to increase patient care and satisfaction.

“We focused on responding to our community, improving our patient engagement which improves our patient care,” he said, adding that the district has won a clinical quality award.

Now, the focus will be improving the financial situation.

As a result, the finance department will be re-negotiating contracts with insurance payers and managing employee overtime.

The district currently accepts four different Medicaid plans. Telles said the district spent close to $1 million in overtime last year.

“We’re going to pause all capital spending,” he said. “We’re going to pause all minor equipment purchasing.

“We have to do that in these times.”

He added that there is about $28 million in bills and gross charges that haven’t been collected yet by the hospital district.

“We know we have a lot of money in our accounts receivable,” he said.