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LEE COUNTY COMMISSION

East Alabama Health asks Lee County for $6 million in COVID relief funds

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East Alabama Medical Center in Opelika has requested $6 million in COVID funds from Lee County

East Alabama Health has requested $6 million in American Rescue Plan Act funds from Lee County in order to help the hospital get back on its feet financially after COVID-19.

Sam Price, executive vice president and chief financial officer for East Alabama Health, told the Lee County Commission on Monday night that the hospital faces a $36.5 million shortfall and is looking for help after facing the challenges of the pandemic.

Price said he told leaders at the hospital during the early days of the pandemic, “Just do what you have to do, whatever it takes, just do it and we’ll worry about the money later.”

He said the hospital has around $160 million in reserves, which would be enough to cover around 70 days, and that the typical hospital usually has enough reserves to cover a couple hundred days.

“We’re digging this hole, and it’s just lowering our cash, and it’s making us a little bit weaker,” Price said. “And we need to first of all stop the hole from getting deeper, and then we need to start trying to fill it up if we can.”

Over a two-year period from 2020-2022, East Alabama Health has paid out $75 million in COVID expenses, Price said, and that at one point the hospital lost $24 million in one month.

A $38.5 million reimbursement from the Federal Government helped to offset the financial loss. However, that still leaves the hospital with a $36.5 million shortfall, he said.

“All that was made up in the first year by just part of this $38 million coming in in 2020, so financially we were fine for 2020,” Price said. “2021 comes along and a lot of the money started drying up a little bit from the federal government. During 2021 we started getting behind.”

Price said East Alabama Health has also approached the cities of Opelika and Auburn as well as Chambers County. He said he also asked the federal government for funding but was redirected back to the state and local levels.

“We’re seeking reimbursement from everybody that we can,” Price said. “We’ve also got a request into the state. The state’s received a tremendous amount of money from these funds.”

According to Price, Opelika has pledged $1.3 million in COVID funds, and Auburn has pledged $3.2 million in COVID funds. Price did not give a pledged amount from Chambers County, but said it was “a much smaller amount.”

“They told us they’re going to give it to us, I’m thankful for that,” Price said of each. “We feel strongly that they’re going to support that.”

Lee County Commission Chairman Bill English said he was reluctant to grant East Alabama Health’s request and compared the county’s budget to that of Opelika and Auburn.

“Did you know that the two cities’ budgets each are about twice as big as ours?” English said. “3.2 and 1.3, and you’re asking us for 6, and we’re half the budget they are. Just so you can put it into perspective. If we could, we would grant everything everybody’s asked. It would be great for us. Except we’d have a $36 million hole.”

Greg Nichols, executive vice president and administrator for East Alabama Medical Center-Lanier, said East Alabama Health has multiple projects it began during the pandemic that it is trying to complete.

He mentioned a $9.8 million investment in constructing water cooling towers for the hospital that was begun in 2020 and isn’t finished yet.

“Several years ago, and it was before COVID was even on the radar, before we even knew about it, we had made a commitment to upgrade our central chilled water plant,” Nichols said.

Additionally, Nichols mentioned a $3,463,290 investment for its procedure and operating rooms, a $1,040,981 investment in equipment, and $1,153,000 in contract labor.

“We need that investment to keep up with the growth that our community is blessed to have,” Nichols said.

Lee County Manager Holly Leverette said East Alabama Health submitted its request for the funds back in November and that that request was very different from the request presented on Monday.

“The original request in November 2021 focused more on providing COVID-19 support to the community and the cost associated with COVID-19 such as testing, treatments, infusions and vaccinations,” Leverette said. “The current request looks to be based more on infrastructure projects, reimbursements for capital equipment purchased previously for COVID-19 response, and reimbursement for contract staffing for additional labor during January and February 2022.”

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