East Adams Rural Health lays off staff, looks to address finances

RITZVILLE — A special meeting of the East Adams Rural Healthcare Commission is scheduled for 2 p.m. Oct. 15. People who can’t make the meeting in person can join through a link on the district’s social media. The discussion follows further layoffs at the hospital, bringing the total of positions eliminated to 16; Chief Financial Officer Viola Babcock said none of the layoffs were in positions connected with patient care. 

“If you take a look at the layoffs, (registered nurses) were laid off, no (certified nursing assistants) were laid off, no housekeeping was laid off. When it comes to patient care, that’s paramount to what we do. None of that is touched, none of that’s impacted,” she said. 

Chief Executive Officer Corey Fedie was placed on administrative leave earlier this summer, which was announced in early September. That followed the disclosure that EARH is losing money, enough that the hospital qualified for $2 million from a state fund for distressed hospitals.  

The hospital has been losing money, but Babcock said how much is still undetermined. The hospital’s audits had not been performed since 2022, she said; the 2023 audit will be presented to the commissioners next week. 

“This hospital is very much struggling, and it’s not doing well. But I need those audited financials to confirm numbers to say, ‘This is what we lost,’” she said. 

Hospital officials are working on the audit for 2024, she said, which will be submitted to the commissioners in November.  

When hospital operations are considered by themselves, the hospital is losing money in 2025, about $800,000 for the year through the end of August, Babcock said. The hospital does have other sources of income, including a maintenance and operations levy and a separate EMS levy. If all EARH income is added in, including the $2 million award for distressed hospitals, Ritzville hospital was about $600,000 in the black at the end of August, she said. 

Interim CEO Todd Nida said hospital officials have implemented a plan designed to put EARH in a better financial position. Babcock said the layoffs fit into that plan, but they’re not the only item.  

“The turnaround plan is quite extensive. It’s not just about one thing,” Babcock said. “It isn’t one thing that gets a hospital into financial trouble – it's a multitude of them. The turnaround plan is 26 actionable items, and we work on them every day. Our employees have given us ideas, and we have implemented those.” 

East Adams applied for and received money from the distressed hospitals fund, which was another item on the list.  

“We canceled 14 contracts. So that’s three of the 26. We have certainly looked at reducing costs – the contracts alone ended up being close the $300,000 in savings a year,” Babcock said. 

The canceled contracts were not connected to patient care, she said. 

“When a hospital gets into this kind of situation, and then writes that kind of turnaround plan, it’s because a litany of items were not addressed soon enough, (people) were not aware,” Babcock said. 

Several factors combined to cause the financial issues, Babcock added.

"It’s not one person, it’s not one thing, it’s a number of them," she said.