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USDA loans, finances and birthing center all topics at PDH meeting

By Debra Moore

[email protected]

A skilled nursing facility in Quincy moved closer to reality Jan. 26 when the Plumas District Hospital board of directors approved a series of steps to secure funding for it. The board voted unanimously to issue revenue bonds to fund the $32.9 million project following a presentation by the healthcare district’s financial adviser, Gary Hicks of GL Hicks Financial.

Hicks, who specializes in advising healthcare districts, described the downsides and upsides of this means of financing through the USDA. As an example of a downside, he said that the USDA takes a security interest in the property, which if the district were to default, would allow the USDA to take control of the district’s spending. However, he said this is not unusual in financing. Hicks said that the “USDA’s role is to make sure that your services are available in a rural area,” so there would be minimal risk to the district.

Then he addressed the upside which includes lower interest rates. “They will provide the lowest interest rate at the time they committed until the time it is funded,” he said. As interest rates continue to rise, the time of commitment will most likely be used, which is 2.5 percent. A smaller loan was sought after the initial financing, and it will be at 3.25 percent. Hicks said the current interest rate is 3.75 percent. “Benefits far outweigh any downsides to the USDA option,” Hicks said.

Board member Andy Ryback said that this issue had been discussed thoroughly during the finance committee meeting and he motioned for approval, which was unanimously granted.


Chief Financial Officer Caleb Johnson presented an update on the district’s finances as of Dec. 31, 2022, the midpoint of the fiscal year.

The bad news is that as of Dec. 31, the district is showing a net loss of $2.5 million. “It’s a good time to pause and think about this,” Johnson said. “If we continue at this pace should see about a $5 million loss on the year.” Compared to a year ago at this time, the district was tracking a$3.5 million loss. But it changed then, and Johnson anticipates that it will change this year, as pools of money that the district is expecting flow into its coffers. “In fact, there are going to be certain amounts that can have a material impact,” he said, including funds from Medicare and the PG&E settlement. The latter represents $3.2 to 3.4 million and will be reported as extraordinary income.

Johnson also discussed what he described as a “really large rise in bad debt. Usually, it’s around $700,000 now it’s at $1.5 million.”

Johnson summed up, that after considering all of the factors, he thinks it could be a break-even year for the district.

Other financial announcements of concern were that Gross AR (accounts receivable) days are trending up, while days cash on hand are trending down. It’s now at 50 days, while the stated goal is 60 days. It had been as high as 135 days cash on hand last March.

But on the positive side, CEO JoDee Read said, “Our patient financial services team collected the largest amount in December, that they have in the past seven years.” During an interview following the meeting, Read was optimistic about the state of finances at the hospital. “We anticipate every year that from December to June our cash position is more turbulent,” she said. “Overall, the financial health remains strong.”

Birthing center

Also during the interview, Read discussed plans for an alternative birthing center which would be under the umbrella of the hospital and the healthcare district.

As of now, there is no labor and delivery option at Plumas District Hospital. Pregnant women can receive prenatal care with local physicians, but must make arrangements to give birth out of county (as no county hospital delivers babies). Expectant mothers often travel to Chico, Reno or Truckee. Read said that a number of mothers opt for Tahoe Forest in Truckee to give birth and that PDH maintains an excellent relationship with that hospital.

The alternative birthing center would be a local option for expectant mothers without risk factors. Those that smoke, are older, have a higher BMI, or who would want an epidural are among those who would not be candidates for the center.

Currently, a location on Bell Lane is under consideration for the birthing center, which would be run by a midwife with medical oversight and a mobile OB team.

However, there are hurdles to overcome since this would be the first of its birthing center of its type in California, because it’s not located within 30 miles of a hospital with a full tertiary unit as required by the state. “It’s not impossible, but it’s something that CDPH (California Department of Public Health) would have to approve,” Read said.

A committee continues to meet to work out the logistics. Director Valerie Flanigan works with the team and complimented their efforts.

Director Guy McNett said, “I know a lot of young families will be glad to have this.”

Next meeting

The next regular meeting of the Plumas District Hospital board of directors is Thursday, Feb. 23 at 3 p.m. in its administrative office.

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