Council Advances $500K Loan For Unalaska's Clinic, But Fate Of $180K Grant Request Is Uncertain

Apr 5, 2019

City councilors are expected to cast their final votes on legislation to approve the clinic's loan on Tuesday, April 9.
Credit Laura Kraegel/KUCB

Unalaska's cash-strapped clinic is one step closer to receiving $500,000 in emergency funds that'll help keep its doors open.

Last week, the City Council unanimously advanced legislation that would provide the nonprofit Iliuliuk Family and Health Services (IFHS) with a loan to be repaid in 10 years.

City Manager Thomas E. Thomas drew up the agreement, with help from the city attorney.

"From the clinic's projections, they do not anticipate making payroll at the beginning of May, so giving this assistance is very timely," said Thomas.

Under the loan's terms, IFHS would submit monthly financial reports to the city and start repayment as soon as it saves up $400,000 in reserves. That's going to take some time, according to the clinic leaders who requested help last month.

Interim Director Will Rodgers said IFHS needs to straighten out short-term problems with its new billing and records systems — and then recommit itself to long-term efforts at improving cash flow.

"A year and a half ago, the former director took over an organization that's been bleeding for over 10 years," said Rodgers. "And quite honestly, we haven't seen the fruits of his labors yet, but they are starting to come true. Our cash flow right now is, on the average, a little over $50,000 a week."

That's up from a near-zero cash flow six months ago — a sign of progress that helped convince Councilor Roger Rowland to vote in favor of the loan.

He also based his support on the clinic's new strategies to boost its poor collections rate — from working with its billing company to recover lost payments to digging into the insurance policies of major local employers to understand why so many patients don't pay their bills.

"I was a little bit opposed to this," said Rowland. "Not because I don't want to fund the clinic, but because if they're that far behind, how are they ever going to repay a loan? But I was very encouraged by what I heard tonight."

Councilors will cast their final votes on the loan on Tuesday, April 9.

While that measure seems poised to pass, the fate of the clinic's community grant request is less certain.

IFHS has applied for another $180,000 through the council's annual nonprofit grant program, and Board Member Billie Jo Gehrig said the funding would support after-hours urgent care in fiscal year 2020.

"In 2018, IFHS provided 496 after-hour visits and 71 medevacs," said Gehrig. "During this time, 89 percent of the patients in the urgent care unit received the care they needed on-island and did not require medevac services."

While councilors agreed that after-hours care is important, some pressed clinic leaders on why they've applied for a grant when they're also lobbying for a loan.  

Historically, IFHS has received city grants to fund its behavioral health program. But as Rowland pointed out, that program was recently taken over by the regional nonprofit Aleutian Pribilof Islands Association (APIA).

"You've stopped some services, because somebody else took them over," said Rowland. "And you're still asking for the $180,000, plus you're asking for another $500,000. So in reality, even though you've stopped services, you need $680,000 to break even. I'm fully in support of medical help, but how this was presented doesn't come across very clean to me."

In response, Dr. Megan Sarnecki said the clinic is still merging with APIA to streamline local health care. While APIA has taken on all behavioral health coverage, the clinic has taken on all medical services.

She said that's put added strain on the after-hours program, which has already operated at a loss for more than a decade.

"So we probably should have been asking for grants long before we got to this point," said Sarnecki, the IFHS medical director. "But our services actually increased approximately 7-10 years ago. Staffing was increased. There was a federal grant, and we actually got better at taking care of emergency patients after hours.

"We're not King Salmon," she continued. "We're Unalaska. We intubate patients and we start pressors and we can do amazing things for people on this island. And it's hard to go back. We can't let people die now that we've gotten to this level."

Still, Unalaska's nonprofits are up against a budget crunch this year, with 12 organizations asking for almost $2 million in total.

That's more than a 50 percent increase over last year — and about $700,000 more than the city's current spending goal.

Councilors say they'll have to choose between to funding everyone and exceeding that self-imposed limit — or denying some requests.

They're expected to discuss nonprofit grants on Tuesday, April 9, as officials continue working on the city budget.