City Loans Unalaska's Clinic $500K

Apr 16, 2019

The Unalaska City Council has voted to lend $500,000 to Iliuliuk Family and Health Services, which requested help after projecting its ninth deficit in 10 years.
Credit Laura Kraegel/KUCB

Thanks to an emergency loan, Unalaska's clinic won't have to shut its doors in May.

Last week, the City Council voted unanimously to lend $500,000 to Iliuliuk Family and Health Services, which requested help after projecting its ninth deficit in 10 years.

City Manager Thomas E. Thomas negotiated the loan agreement. He said the money will buy time for the nonprofit as it tries to improve its dire financial situation.

"They're looking at a deficit where they'll probably not be able to make payroll next month," said Thomas. "This is to help them sustain daily operations while they go through a financial analysis of their long-term needs."

The clinic will have to submit monthly financial reports to the city. But it won't have to start repayment on the 10-year loan until it saves up $400,000 in reserves.

While Interim Director Will Rodgers said that's going to take some time, he also told councilors that the clinic is up to the task.

"I just want to thank the City Council for their faith in IFHS," said Rogers. "I wanted to indicate to you, on behalf of the board and the staff, that we will put into place the necessary financial structures to assure good stewardship of your money."

Rogers said the clinic staff is contracting with its billing company to recover payments lost to coding missteps. They're also digging into the insurance policies of major local employers to understand why so many patients don't pay their bills. And they're continuing to integrate with the Aleutian Pribilof Islands Association, which previously provided care to tribal members only. 

Those efforts are expected to chip away at the clinic's budget gap, which has averaged $480,000 per year over the last decade. But locum Vince Perino said he's doesn't think it'll be enough to mitigate the deficit's biggest driver: the cost of providing emergency after-hours care while operating as small community health center.

"A setup like this will always require some form of trickling-in money to keep it afloat on an emergency room basis," said Perino. "We're not licensed as an ER. It's just the way it is out here. We don't meet criteria to do that."

Because of the clinic's size and status, Perino said its emergency operations will probably always operate at a loss. And with that cost coming in at roughly $1 million each year, he told councilors the organization will need ongoing support.

"Although I'm very thankful you guys are loaning money to the clinic, I would urge you to look further into it and consider subsidizing after-hours facilities — and the crew and staff that have to provide the care this community needs," said Perino. "I foresee that if something doesn't change, you'll see a turning point where there could be an emergency and the doors will just have to shut."

Looking ahead to fiscal year 2020, the clinic has requested $180,000 through the council's nonprofit grant program to pay for part of its after-hours operations. But with an increase in grant applications, it's uncertain if the clinic will receive that money.

It's also uncertain if councilors will offer further financial support, as Perino requested.

The city has contributed more than $3.5 millon to the clinic since its current facility opened in 1992. And while councilors have expressed support for helping the nonprofit get on track financially, several have remarked that they don't want to see the clinic become a city department.