Northern Inyo Hospital CEO outlines multi‑year plan after one‑time aid averts immediate crisis

Dr. Wallace, chief executive of Northern Inyo Healthcare District, gave the board a candid financial and operational update, saying the hospital ran year‑to‑date operating income of negative $9.4 million and expects to finish the fiscal year with an operating deficit near $13 million.

"If you don't make enough money to cover your expenses, you end up dipping into savings," Dr. Wallace told the supervisors. He said the hospital typically depends on about $18 million a year in supplemental funding and that a routine IGT supplemental expected at $9 million instead produced $3 million this year — a $6 million shortfall that pushed the district below debt service and days‑cash thresholds and prompted urgent work with bondholders.

The CEO said a subsequent, one‑time $8 million employee retention credit restored key liquidity metrics: "When you know it, 4 weeks after we lose $6,000,000 we get $8,000,000 in employee retention credit, putting us back into the positive," he said, adding the credit is a one‑time windfall.

But Dr. Wallace stressed the district cannot rely on intermittent supplements. He outlined a four‑part strategy to stabilize the hospital: aggressive revenue growth through targeted service expansion, tighter expense control, space and patient‑flow optimization, and regional partnerships.

Short‑term expense work includes benchmarking operations against comparable rural hospitals and a space‑utilization review of the PMA building to free exam rooms for specialty providers. On revenue, he proposed a phased master facility plan that begins with a medical office building on the Rural Health Campus and discussed pursuing low‑interest USDA loans, lease‑buildback arrangements, and grant funding.

Dr. Wallace also described clinical initiatives intended to both improve care locally and generate revenue. He said the district plans to introduce inpatient dialysis supported by tele‑nephrology (two dedicated nephrologists contracted through a vendor called TelenF) and to pursue the DP&F (Daily Point of Furnishings/SNF) program tied to a nearby skilled nursing facility to capture IGT and supplemental dollars. "All the things that make us sustainable are things like our inpatient dialysis and better care coordination," he said.

On regional cooperation, the CEO reported the district has held its first joint board meeting with Mammoth Hospital and is discussing clinically integrated networks, shared electronic records and coordinated service lines. He described the Rural Health Transformation Program (RHTP) as a possible funding path and said Renown Health has agreed to serve as a hub for a multi‑county grant request.

Supervisors asked specific follow‑ups about obstetrics, nephrology access and the timeline to reach sustainable operations. Dr. Wallace said the hospital expects to see measurable improvement within three years if the district launches the DP&F program, builds the medical office building, and secures RHTP or similar funding.

The CEO was careful to distinguish one‑time federal credits from ongoing revenue. "That was luck," he said of the $8 million credit, "We need to create a plan for how we're gonna have some sustainability, and we can drive our own future rather than wait for it to happen to us." The board did not take a formal action on the presentation; Dr. Wallace said he will return with further budget and planning details.