Gene Cashman, CEO of Crittenden Regional Hospital in West Memphis, blamed this month’s closing of the facility on a “combination of insurmountable obstacles,” including “a changing healthcare industry, a recovering economy and one of the toughest reimbursement climates in the nation.”

Cashman’s comments were part of an internal memo to the 400 employees of the hospital that was sent August 25, the day the announcement of the closure was announced. The hospital said it would stop admitting patients effective August 25, and close permanently on September 7.

The hospital’s media release said the decision was made by the board of trustees and leadership after “exploring all possible options with legal and financial advisors.”

In the announcement, Cashman said, “We are deeply saddened to have to make this decision after all the attempts that have been made to preserve the hospital for our community. With counsel from national healthcare consulting firms and the passage of a county-wide sales tax, we had identified a long-term strategic plan that had set our organization on a path to improvement. This summer’s fire, and the subsequent shutdown, derailed that plan’s success.”

There were two fires this summer, the most significant shut down the facility for more than six weeks.”

In June, residents of Crittenden County approved a one-percent local sales tax increase in hopes of getting the hospital out of debt. Collection of the tax will not begin as scheduled.

“The sales tax campaign was a tremendous testament to the community’s support for Crittenden Regional and we are thankful for that,” says David Rains, Board of Trustees Chairman. “The fire decimated our cash position. We are not able to finance our operations until December when the tax revenues would have been received.”

In addition to the hospital, CRH clinics and home health/hospice services also were to cease operations September 5.

Hospital leaders have been contacting healthcare organizations that may be willing to consider the possibility of keeping key physician services in the area, and for opportunities for displaced employees.

“Crittenden Regional has been home to many dedicated, talented physicians and employees, who have served patients and their families here in Crittenden County for the past 60 years,” Cashman said. “We are grateful for their service and will make every effort to help them find new employment close to home.”

The employees’ pension plan is covered by a federal insurance program run by the Pension Benefit Guaranty Corporation (PBGC) which is expected to terminate the pension plan, take it over, and pay the benefits under the plan, without interruption, subject to legal limits on the guarantee.

The news release observed, “Change is occurring at every hospital in the nation, and nowhere is it having a greater impact than on rural hospitals such as CRH. Long before recent health reform measures, the decline was already growing. In 1992, there were 2,285 rural hospitals; by 2012, that number had fallen to 1,980. Since the start of 2013, 27 hospitals have ceased operating.”

Hospital officials said the facility also was impacted by a significant number of physician departures.

Even the expansion of Medicaid in Arkansas and impressive enrollment rates in the Private Option by citizens in the service area were not enough to overcome these issues. Over the last five years, the CRH Board and leadership executed a number of initiatives to preserve the acute care hospital, services and jobs. These initiatives included a nationwide search for a hospital or health system partner or buyer, attempts to secure additional sources of new capital, recruitment of physicians and implementation of service enhancements.