SIH CALLS A FRIEND

This article was published in the October 11, 2025 Issue.

“Let us live out our days in the community we love.” 

Mike Graves, a lifelong Lone Piner currently residing in what he called the “nursing home” at Southern Inyo Hospital (SIH), put that plea in a letter urging Inyo County to approve a loan or grant to help the Lone Pine hospital get through its current fiscal crisis. 

Two fathers, Dan Gockley from Lone Pine and Andrew Howe from Independence, related how each had a child in a harrowing, near-death medical situation whose lives were saved by the staff in the Emergency Room at SIH.

Those stories, shared during public comment at Tuesday’s Inyo County Supervisors meeting, put a personal perspective on the importance of SIH to the people in the communities it serves.

The financial perspective was provided by SIH board members. They noted the hospital Emergency Room, Rural Health Clinic and Skilled Nursing Facility (SNF – where Graves resides) employs 150 people, with 50 of them living in Bishop. The hospital pumps about $800,000 a month into the local economy in the form of payroll and supplies and services purchased from vendors in the county. 

Even though SIH is currently $2 million in the red and teetering on the brink of insolvency, in the long-term, SIH is “very financially viable,” Chief Executive Officer Kevin Flanigan said. 

Starting in 2026, reimbursement payments will jump by about $1-2 million a year for the 28-bed SNF. The daily, per-bed payment will go from $470 to $670 a day on Jan. 1. Supplemental state reimbursements to make up for lagging past payments will go up by $4 million in 2026 and by $6 million in 2027.  

The immediate problem is securing enough money to stay open until the end of January 2026 when the state money arrives.  

After a bit of dithering, the Board of Supervisors approved a $500,000 loan to SIH. 

The loan money will only go to SIH after the hospital secures millions in state funding, which is not assured. Loan payments would not start until 2027, and the board indicated it wanted the flexibility to “forgive” the loan if necessary. Flanigan said the $500,000 would not guarantee the hospital’s future but would help “push it across the finish line” after additional state grants or loans are secured. 

Supervisor Jen Roeser said supporting hospitals was not a typical local government function, but it is “what most citizens expect.” She added the county has been subsidizing ambulance service in Bishop and the rest of the county. She endorsed a straight grant instead of a loan. 

Supervisor Trina Orrill said a loan would be preferable. As did Supervisor Jeff Griffiths, who suggested being able to forgive repayment. 

Third District Supervisor Scott Marcellin noted the county uses General Fund money to pay the Bishop ambulance subsidy (which goes to a private company) and smaller subsidies to the county’s volunteer fire/ambulance departments (the cost of those subsidies in 2025-26 will be about $250,000). He said that can’t go on forever, and some sort of additional tax or funding source for Emergency Medical Services (EMS) and SIH should be considered. 

Marcellin’s comment echoed the analysis by SIH board member Mark Lacey. The small facility has been on the financial brink for decades because of a chronic “lack of volume and lack of tax base.” Lacey suggested increasing the bed tax or sales tax to increase funding for the hospital district and EMS. 

Lacey has been on the SIH board for 10 years and helped steer the hospital through its 2016 bankruptcy and onto solid financial ground. However, he admitted “there had been mistakes by us (the board)” that contributed to the current, yet familiar fiscal crisis. The board had given too much autonomy to the former CEO and had not fully staffed management levels to provide more checks and balances, he noted. 

The long-term and short-term issues could be “mitigated with proper management.” With the “plan of action” now in place, he said, “I have a high degree of confidence we can be financially sustainable.” 

Flanigan outlined the ongoing cost-cutting. 

Staff members have voluntarily cut their hours to reduce yearly payroll by at least $150,000. Vendors owed more than $100,000 have agreed to a 10-month payment plan while still providing supplies and services. The hospital has about $2 million in accounts receivable it’s working to collect. Several “generous donors and benefactors” have made significant donations to SIH. 

At the current pace, SIH is almost breaking even, with $50,000 a day in revenue and expenses. But SIH remains about $2 million in the red, and its cash on hand can only carry it through mid-November, Flanigan said. 

SIH also sent a request for $3 million in emergency funding to Governor Gavin Newsom. The request is based on SIH being a rural, critical access hospital. Flanigan said he is also talking with the Los Angeles Department of Water and Power in an effort to obtain grant funding.

If those large grants or loans do not arrive, SIH could suspend Emergency Room and in-patient operations for several months then restart those services after the first of the year. 

Or it could go into Chapter 9 bankruptcy, once again.