Alaska News

Finances looking up at YKHC but rural needs remain big -- and expensive

BETHEL -- Dozens of remote health clinics staffed by aides but no physicians. Buildings damaged in storms and that settle unevenly on the tundra, jamming windows and doors. High turnover and high energy costs. A financial crisis that resulted in extensive layoffs and still affects operations.

No one said running the biggest rural health care organization in Alaska would be easy.

But approaching nine months in the top job, the new chief executive of the Yukon-Kuskokwim Health Corp. is holding forums and traveling with top managers and board members to villages to spread the message that the organization is turning around financially and to thank everyone for helping.

Dan Winkelman was with YKHC 13 years, including time as general counsel and vice president, before being named in January as president and chief executive officer of the health organization most just call "YK."

"Please tell your friends and family," he repeated at each village stop in late September. "Five months in a row we've had a profit."

New leader

Winkelman, 42, replaced Gene Peltola Sr., who was the face, voice and president of YKHC for 24 years, adding clinics, consolidating administrative offices and putting YKHC under tribal management.

Peltola had planned to retire in April and groomed Winkelman to step in. Instead, the board bought out his contract and asked him to step down in January without explaining why. Peltola said the scale of the budget problems wasn't yet known and he figured the board didn't want a lame duck.

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Now Winkelman is becoming the new face of YKHC. He's been to 34 villages and counting to connect with far-flung employees and tribal leaders, hear their concerns and lay out the financial picture.

"Your issues are my issues," he says at stops in village clinics and tribal offices. If there's a problem, he says, come to him or a YKHC board member.

The challenges are immense for an institution that still faces tight budgets. Employees and tribal leaders talked of concerns about low staffing and short clinic hours. They asked for more advanced care and trauma rooms, four-wheelers and trucks. They complained of high water bills and the lack of trained village workers to maintain clinics and work on boilers.

Some areas are improving. Clinic hours lengthened from the short summer schedule back to normal Monday-Friday hours Oct. 1. Patients already are getting in and out of the emergency room much more quickly, in about three hours compared to six hours, Winkelman said.

The budget crisis was multipronged and serious, Winkelman and his interim chief financial officer, Tommy Tompkins, said in later interviews. Tompkins returned from retirement in East Texas in April to help continue the turnaround.

Winkelman started as chief executive in January. "The next day, I took a deep dive into our financials," he told tribal leaders in Alakanuk on a visit last month. "They were a lot worse than I thought or imagined."

Delays in billing were costing millions. The hospital lost half of its physicians in the last five years and relied on costly temporary fill-in doctors. Automatic federal budget cuts filtered down from the Indian Health Services to the hospitals it funds, including YKHC, the loss of millions. A new skilled nursing home -- the first in the region -- opened in October 2013 but it, too, was costing YKHC money. And employee health costs were escalating.

An analysis at the end of February found that the health agency was already $7.3 million in the hole, with another seven months to go in a budget year that would end Sept. 30.

While high winter utilities, low patient counts over the holidays and upfront expenses always meant tight financials in the first months, Winkelman warned employees in March that the scale of the projected shortfall was unprecedented for YKHC.

For instance, at the same point in the previous budget year, YKHC was short about $3 million. But even then, operating losses in reality were higher, masked by capital projects that added value to the company bottom line in the budget reports, Winkelman and Tompkins said.

Positions were frozen in the spring and ultimately 88 workers lost jobs in the layoffs while others resigned on their own. YKHC started to work to boost revenue too.

Winkelman said the measures are making a difference. YKHC closed out its 2014 budget year on Sept. 30 with a preliminary number that eased the worry of administrators: $2.2 million in the black.

Mega health organization

The health of the Alaska Native-run health institution matters immensely to those in Southwest Alaska. The Yukon-Kuskokwim Health Corp. is the region's biggest employer and provides care for residents of Bethel and 57 other villages up and down the Yukon and Kuskokwim rivers and on the tundra, an area the size of Oregon. Its operating budget for the 12 months that started Oct. 1 is $152 million. It has the equivalent of 1,120 employees. About one in six Bethel residents work for YK.

YKHC runs the Bethel hospital, 41 village clinics, five subregional clinics in bigger villages, a sobering center for inebriates to sleep it off, an alcohol treatment center, residential psychiatric treatment for children, a nursing home and a center for pregnant women from villages awaiting delivery. Among other things.

Delivering health care as YKHC does in the Bethel hub and rural Yukon-Kuskokwim Delta villages accessible only by plane, boat or snowmachine is remarkable, said Bill Streur, commissioner of the state Department of Health and Social Services.

"The complexity of delivering services in the Bush is beyond my ability to comprehend," Streur said in a recent interview. "It's unheard of anywhere else in the nation. And it's expensive to deliver."

Now 42, Winkelman was the youngest candidate considered for the president's job, said board member Michael Hunt of Kotlik.

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Winkelman is a tribal member of Shageluk, a village of fewer than 100 people on the Innoko River, a branch of the Yukon. He grew up in Anchorage and graduated from Service High School. After law school at the University of New Mexico, he practiced Native rights law before going to work for YKHC. His wife is from the village of Kwethluk and their children go to the Bethel's Yup'ik immersion school. His Athabascan name is Xiyole'.

"We had trouble with finances over several months, and all of us working together came up with where are today," Hunt told YKHC workers and village leaders in Alakanuk last month. "Dan is doing really well."

Streur has worked with YKHC on projects -- and funding -- for years and said the corporation is progressive. It looks for solutions, not handouts, he said.

As to the finances, Streur said, "I think it was a matter of having to sharpen their skills. Dan is definitely on the right road to do that."

Winkelman formed two key teams, one looking at cutting expenses and the other looking at increasing revenue. He chaired them both.

Medical billing is a complex, multistep process, and Winkelman said it had broken down at YKHC.

YKHC gets revenue not only from the Indian Health Service but also from billing private insurance, Medicaid and Medicare. Some $14 million worth of charges had accumulated in an electronic queue awaiting workers to code the service provided to patients, Winkelman said. "We have a small army of coders working on that."

On top of that, when bills were sent to the state-run Medicaid insurance program, they weren't being promptly paid. The problem is rooted in the state's bug-riddled Medicaid payment system, Streur said. The state has filed a claim against the contractor, Xerox State Healthcare LLC, and bills are being paid more quickly, though not quick enough, Streur said.

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In the meantime the state stepped up to help, Winkelman said. It is loaning millions to cash-strapped health providers around the state, including an $8 million interest-free advance to YKHC that helped it avoid an even bigger crash. Now YKHC must repay the money.

Village needs

On a September round of check-ins with villages, Winkelman, two top managers and board member Hunt took a chartered plane to Kotlik, Alakanuk and Nunam Iqua, on the far western edge of Alaska where the Yukon River empties into the Bering Sea.

Kotlik, one and a half hours away by air, is the farthest village from Bethel served by YKHC, and the distance is felt, board member Hunt and others said.

Longtime tribal administrator Della Hunt mentioned some recent deaths in the village and wondered whether their conditions were more serious than recognized. Maybe the Kotlik patients needed to be medevacked, Hunt said.

Community health aides serve as the backbone of village care. They start seeing patients, with oversight, early on as trainees. There's high turnover in that high-stress job, and some openings go unfilled for months or even years, YKHC acknowledges.

"It's hard on our health aides. We are trying to support them as best we can," Della Hunt said. "You worry about them. They are young."

Read more: Kotlik death on plane highlights the difficulty of rural health care

It's essential to provide that support, said Winkelman and Rahnia Boyer, YKHC's director of the community health aide program.

Deaths are reviewed by a medical team led by the hospital chief of staff, Winkelman said. Recommendations are followed up on, Boyer said.

Hunt, the board member and cousin to Della Hunt's husband, said he loses sleep with worry when a patient dies, wondering whether more could have been done.

"We feel the hurt from the community for a long, long time," he said.

Since Kotlik is so far away, couldn't it have a big clinic with a physician's assistant, like Emmonak or St. Mary's? tribal leaders asked Winkelman.

Physician assistants are expensive, he answered. Only the biggest five villages get one.

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"So the model that we have been using is the model we can afford," Winkelman said. Despite the turnaround, "our budget is maxed out."

It would be wonderful to put physician assistants in more villages, he said. "It just not likely that it's going to happen any time soon," he said.

YKHC can help with other things. The clinic needs a four-wheeler, and the YKHC staff can help the tribe apply for a Rasmuson Foundation grant to get one, Winkelman said.

YKHC oversees the building of clinics, but they are owned by tribes, then leased back to the corporation. Kotlik's clinic is one of the bigger, newer ones, built in 2009. Some villages are still using old housing units for clinics, and they aren't nearly as nice, Winkelman said.

As the team left Kotlik, Jean Simon, YKHC's clinic facilities manager, pointed out some loose wires to Hunt, who said she would take care of it.

The story is the same as YKHC leaders travel from village to village, a message of constrained finances, a push for more care, a vow to support villages.

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Health aide gaps

Leaders in the village of Shageluk last week pointed out the lack of both a health aide and a village public safety officer after a revered couple was killed in an ax rampage and local leaders contained the suspect and tried to provide first aid. The couple's son now is jailed on murder charges. YKHC says it has been trying to hire an aide.

In Alakanuk, the clinic was short of aides and was down to just one with enough training to cover night and weekend on-call shifts.

"Can we please get two more?" asked Marlene Ayunerak, the lone experienced aide.

Another aide soon would have the training to work on-call, Boyer told her.

In Nunam Iqua, the clinic had no health aide at all. YKHC had been recruiting for some time, Boyer said.YKHC rotated in floating aides, which tribal council member Joe Afcan said was appreciated. Village residents also traveled to the subregional clinic in Emmonak.

Boyer urged the tribe to help find someone for that tough job and to support the person.

The clinic building itself needed work. Simon asked whether paneling that blew off a while back had been replaced. Not yet, tribal council bookkeeper Aaron Brown said.

The tribal council's maintenance man left for a better-paying seasonal job, and other construction workers in the village were busy building a new tank farm and three new houses.

"We're going to get back to maintenance on the clinic as soon as those jobs are done," Brown said.

At YKHC, Winkelman said he'll focus more intensely on patient care now that finances are being stabilized.

"We're doing a lot better than we were," he said.

Lisa Demer

Lisa Demer was a longtime reporter for the Anchorage Daily News and Alaska Dispatch News. Among her many assignments, she spent three years based in Bethel as the newspaper's western Alaska correspondent. She left the ADN in 2018.

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