EDITOR’S NOTE: This story has been updated with comments from Sturgis Hospital COO Bobby Morin.
The state will allocate $11 million to keep Sturgis Hospital open under a budget deal between top lawmakers and Gov. Gretchen Whitmer.
The funding came in a supplemental spending package for 2022 that legislators approved early this morning. The spending package is part of a broader $77 billion budget for the state’s 2023 fiscal year that starts Oct. 1 and includes billions in one-time spending using federal money.
“It was a good night for us,” said Sturgis Hospital Chief Operating Officer Bobby Morin.
In a statement to MiBiz, the Michigan Health & Hospital Association said it “is very appreciative of the Legislature’s funding appropriation to Sturgis Hospital to assist in maintaining operations. Independent community hospitals are critical to the health and economic viability of communities throughout Michigan.”
The state money, along with a $645,000 loan the Sturgis City Commission approved Thursday night, will provide a financial bridge until Sturgis Hospital can convert to a rural emergency hospital designation in 2023 when a new federal law takes effect.
“It will allow us to fund operations until we make the conversion,” Morin said. “We have a negative cash burn every month, so we’ll start working on that as we go forward.”
The hospital has been losing nearly $500,000 a month operationally, Morin said.
The state funding will also pay for facility enhancements and infrastructure needs, he said.
The conversion to the new designation would make Sturgis Hospital eligible for better reimbursement rates and maintain a local emergency room but without inpatient beds.
Sturgis Hospital recently informed the state under a federal Worker Adjustment and Retraining Notification (WARN) Act notice that “if the availability of sufficient funding is not confirmed by on or around July 1,” it would begin to permanently lay off 194 employees “commencing on or around July 9, 2022, as services are eliminated.” The hospital could close all facilities and services “on or around” July 23 “unless circumstances change.”
Morin told MiBiz earlier this week that Sturgis Hospital has worked without success since 2018 to seek a partner. The hospital is still “open to being acquired” and the state funding could help to attract a suitor, Morin said.
“It’s got a great potential to do that, whatever the definition of partner is,” Morin said. “We’ll see.”