HARRIS –– Like health systems across the nation, Garnet Health is struggling financially. The Democrat reported in June that Sullivan and Orange counties’ main hospital operator and healthcare provider was nearly $33 million behind budget ($5 million at the Catskills division alone) for the first four months of 2022.

Tasked with turning this around at Garnet Health Medical Center (GHMC) - Catskills is Jerry Dunlavey, who was recently promoted to the hospital’s Chief Operating Officer, as well as Vice President of Operations for Garnet Health. 

As COO, Dunlavey is responsible for the daily operations of GHMC-Catskills’ two Sullivan County campuses located in Harris and Callicoon.  As VP of Operations, he oversees the systemwide operations of professional services including pharmacy, laboratory, diagnostic imaging, security, environmental services, and food and nutrition services. 

And when it comes to short-term goals in these roles, Dunlavey quickly answers,“Restore some financial stability to the organization.”

“The thing about this campus related to our financial situation is we are already a very lean operation,” said Dunlavey. “So there’s not a lot of opportunity to kind of cut expenses and get further and further towards profitability. So we have to look at our operations from top to bottom and figure out what are the things that we can do, in addition to perhaps, a little bit of return of that volume. What are the things that we can do to help improve our operations?”

Mitigating expenses

It was reported in June that the hospital had put an application into the NYS Department of Health (DOH) to temporarily close the intensive care unit (ICU), as their census was low and expenses were high. That plan was ultimately rejected by the DOH. Dunlavey told the Democrat they’ve moved on and aren’t returning to that proposal. 

 However, financial challenges remain, caused by lower patient volumes, the end of provider relief funding, significantly higher expenses including rising labor costs, declining investment earnings, supply chain issues and inflation.

 In response, Garnet Health recently announced the implementation of a financial improvement plan.

Changes in the plan include the Garnet Health Doctors Bethel location relocating to Garnet Health Doctors in Monticello. 

 The Garnet Health Doctors Rheumatology practice will close effective November 9 due to provider attrition. The only one they have is leaving.

 The Garnet Health Doctors Outpatient Pediatric practices in Middletown and Monticello will close the same day. (All inpatient pediatric services, including the Children’s Emergency Department in Middletown, will continue at Garnet Health Medical Center and Garnet Health Medical Center-Catskills.)

The Garnet Health Doctors Outpatient OB/GYN practices in Middletown and Harris will also begin taking measures to close over the next several months. However, inpatient Labor and Delivery services will remain at Garnet Health Medical Center and Garnet Health Medical Center-Catskills. 

“Every single decision that we make related to financial mitigation is given a tremendous amount of thought and consideration,” said Dunlavey, adding that they weigh the impact not just on patients but on doctors, staff and the community. “ … I think it’s important for Sullivan County to know that those services, as it relates to services provided [at GHMC-Catskills], are not at all impacted.”

 Dunlavey added that they don’t take lightly their obligation to help affected patients find a new provider. In fact, he’ll be assisting his own daughter, who is a patient in their OB/GYN practice.

Room for growth

Mitigating expenses is a part of the formula for most financial turnarounds, but Dunlavey said the other side of the equation is how to build business. 

 Looking at market dynamics, Dunlavey said three ideas came to mind: Gastrointestinal, General Surgery and Orthopedics, noting that about 600 people leave the County on an annual basis, not to travel to New York City, but other local hospitals (and not their Middletown campus) for those three services. 

 “So to us, that’s sort of an opportunity to build our business here,” said Dunlavey. 

 With that in mind, they recently hired gastroenterologist Dr. Eric Alatevi, who will be full-time at GHMC – Catskills, and a second general surgeon, Dr. Andrew Knauer (a graduate of their general surgery residency program in Middletown), who will split his time between GHMC-Catskills and GHMC-Middletown.

 At the system level, they’re getting ready to offer cardiac surgery. 

 Back in April, former GHMC - Catskills CEO Jonathan Schiller told the Democrat that the hospital was in exploratory talks with a private group to provide drug rehab services in what was formerly the Skilled Nursing Unit. Dunlavey acknowledged they are still in the discussion phase.

 “I think that they are interested in providing the service here, and it would be very beneficial to Sullivan County,” said Dunlavey. “We’re still kind of early on. I would expect that by the end of the year, we’ll have a sense of whether or not they are going to come here.”

 Dunlavey said the secret to short-term success is small, incremental improvements. He said that’s been hampered by their inability to fill key positions, such as operators in the call center and registrars to register patients.

 “Once we start to get some traction in filling some positions, there are things that we can do more efficiently,” added Dunlavey. 

Transportation

Transportation to appointments is often a challenge in rural areas. However, a new $100,000 federal grant through the Rural Health Network Development Program will establish the Sullivan Transportation Health Access and Reliability Taskforce (STHART) in Sullivan County.  

In partnership with Garnet Health Doctors, Rolling V Corporation, and the Sullivan County Division of Community Resources, the STHART Network will focus on expanding healthcare access; specifically, helping rural residents with no personal transportation options to receive the care that they need via a coordinated and accessible transportation system.

“Many of our patients are unable to get to and from their medical appointments due to a lack of or unreliable public transportation, making it difficult to procure the medical services that they sorely need,” said Dunlavey. “A planning grant like this, with the help of our STHART Network partners, will effectively formulate a road map to lessen this barrier.”

New hospital?

The multitude of changes, however, has elicited public concern. 

 Dunlavey said Garnet’s commitment to Sullivan County remains strong. From 2007 to present, Garnet has invested over $20 million in healthcare improvements and over $10 million in infrastructure upgrades and repairs, he explained. On average, Dunlavey said they are spending $2-$2.5 million per year in capital improvements.

In his over 23 years in healthcare leadership, Dunlavey, in addition to being the founding executive for Garnet Health Doctors, previously served as Vice President of Clinical Program Development and Operations at Garnet Health.

In that capacity, he was responsible for the growth, development, and operations of several hospital-based clinical service lines including cardiology, orthopedics, oncology, neuroscience and medical rehabilitation.  

He also led business and clinical development initiatives that included the growth of the orthopedic department’s Total Joint Program, the development of a Level 2 Neonatal Intensive Care Unit, implementation of Primary Coronary Intervention, and the development of a Pediatric Emergency Department.

Dunlavey said prior to the pandemic, Garnet worked with a private consultant to take a look at the GHMC - Catskills facility and needs of the community.

“Their recommendation was that we need to begin planning for a replacement hospital,” he said.

While in the early stages, Dunlavey said the hospital recently completed a Transformation Grant III application through the NYS Department of Health, to continue to evaluate the possibility of building a new hospital in Sullivan County.

Dunlavey, who was part of the planning, building and opening of what is known today as Garnet Health Medical Center in Middletown, believes the grant could be a “game changer” for Sullivan County. 

“I’m a growth-oriented executive. Everything that I’ve ever done in healthcare is all about business planning and clinical program development,” said Dunlavey, adding that if it was the system’s goal to close the hospital, then “they hired the wrong guy.” 

“This [Transformation Grant] is something that excites me, and I think the people of Sullivan County deserve this opportunity.”