(KNZA)--City and county leaders heard about the Hiawatha Community Hospital’s current financial crisis and received a request for financial assistance during a special joint meeting Monday.

Hospital CEO Jeff Shelton met with the Brown County Commission and Hiawatha City Commission in the main courtroom at the Brown County Courthouse, with a large number of hospital employees on hand.

Since January 6, Shelton said they have implemented more than $1.3 million in cost reduction measures in an attempt to bring the hospital back into financial security.   

Even with the cuts, he said they need an immediate infusion of around $2 million in order to service a $1.2 million Medicare repayment due May 31 and catch up on accounts payable. “We know that this payment is coming due in May. We’re trying to build our liquidity, pay our bills, get caught up, all these different things. We need some financial assistance. This will allow me, and our team, to focus on the growth, development, optimization of our organization to ensure future success.”

 In addition, Shelton says the hospital needs assistance in dealing with its long term debt. “Our long term debt is something that we’re challenged with trying to service right now. We need help dealing with that, by potentially getting help from our county to reissue that debt into bonds, and possibly helping us for a few years in servicing that debt while we’re rebuilding our system to the strongest it can possibly be, with an ultimate goal of us servicing our long term debt.”

The hospital’s long and short-term debts total nearly $9 million.

Shelton said without immediate financial assistance, they would be forced to transition to an outpatient care facility. “We would still provide ER services 24/7, 365, but we would eliminate inpatient care. We would eliminate programs, such as OB. We would eliminate other support programs that are not financially viable. We would cease to do what we’ve done since 1951.”

Shelton noted the economic impact provided by the hospital, which serves as the third largest employer in the county, with 245 employees.  

He said the Hiawatha hospital is not alone in facing financial challenges, with 69 percent of rural hospitals operating in the red.

Shelton says he believes the hospital can work through its financial struggles.

Bond Counsel Kevin Cowan joined the meeting via phone to discuss bond financing options.  Also discussed was a county-wide sales tax to provide financial assistance to the hospital, which would require voter approval.

Mayor Bill Collins said he thinks they need to move forward in doing what they can to help the hospital.

City Administrator Mike Nichols suggested that a joint committee be set up to figure out the next step.  The committee will consist of County Attorney Kevin Hill, Nichols and a representative from the Hiawatha and Brown County Commissions.  It was also suggested that representative from the Horton City Commission be included. County Commissioner Dwight Kruse agreed to serve as the county representative.

U.S. Senator Jerry Moran is to meet with Shelton Wednesday and tour the hospital.