Nashville’s “safety net” hospital for the poor is facing another financial crisis. Now Metro General Hospital at Meharry is asking the city for emergency funding of $10 million.

Metro had budgeted about $35 million for the hospital this year.

Hospital leaders told members of the council’s budget committee on Monday that they have a shortfall because of some surprises. Those include getting dinged by Joint Commission inspectors on
patient safety and infection control — problems that have demanded spending to get fixes in motion.

They also want to continue with technology changes and creation of an outpatient pharmacy. Combined, several hospital maneuvers have reduced the daily cost of treating a patient 11 percent between 2014 and 2016, according to the hospital.

But they’re still struggling to pay bills on time to vendors, lagging behind industry standards.

And at one point this summer, the hospital had about two days’ worth of operating cash on hand, making it tough to even pay its employees.

What $10 Million Would Cover

$2.4 million to comply with inspector recommendations and regulations

$1.4 million to cover shortfall

$3.2 million to start initiatives that could yield long-term savings

$3 million to speed up overdue bill payments

Dr. Joseph Webb, hospital director, told councilors that the financial pinch is so urgent that the hospital worries about paying salaries that are due at the end of this week.

“The imminent need is to do with, certainly, the shortfall,” Webb said, “and to be able to make sure we’re meeting payroll.”

Webb also went to bat for efforts that are meant to make the hospital more competitive, especially as healthcare demands more tracking of patient outcomes after they leave the facility.

Each year, Metro General serves almost 102,000 people — including half who are indigent and who cannot afford to pay for care. The hospital collects about 17 percent of patient charges, Webb said.

Concerned Council Probes Budget

Council members like Sheri Weiner praised the hospital’s effort to care for people in need. But she still scrutinized the budget and the “eleventh hour” request for money.

“These problems didn’t occur overnight,” Weiner said. “I want to make sure that we vet this and that we understand where we’re going to be moving forward.”

Webb, who took charge at Metro General in early 2015, said he arrived then to find “crisis activity,” at a hospital with a future in doubt and dependent on many interim staff members.

Since then, Webb said Metro General has increased the percentage of costs collected from patients, provided better care to people with chronic illnesses and kept better track of health outcomes when people leave care.

Some of those measures did come under questioning by at-large Councilman Bob Mendes. He argued the hospital’s most pressing need was for about $3.8 million, and that an additional $6 million was being proposed for initiatives that hadn’t yet been through the council’s budget vetting process.   

“We had to move forward with some initiatives that we thought would be beneficial to the hospital in the long run,” Webb told him.

Councilman Steve Glover also pushed for specifics on the most “imminent” need: payroll.

“It’s very imminent that we deal with this,” Webb said.

“We do have a payroll coming up on the fifth,” said Pamela Gallagher, chief financial officer. “[Not getting the $10 million] would just put us in a situation where the vendors don’t get paid quickly again and it just escalates the problem.”

Glover said the payroll crisis alarmed him, but he was cautious about the council fully understanding the other management challenges.

Glover and Mendes unsuccessfully argued for a lower emergency subsidy.

But city finance staff said they’d spent weeks working with hospital staff to arrive at the $10 million request. And Councilman John Cooper said that amount would allow the hospital to press on.

“These people need to get back to the hospital with certainty about the resources they’re going to have,” he said.

The council budget committee decided the $10 million request made sense. That amount goes for a final vote before the full council Tuesday night — with a request for another budget review next month.