While hospitals serving rural areas had already been struggling — the system operating Bradford Regional Medical Center and Olean General Hospital hasn’t turned a profit since 2017 — “COVID kind of iced the cake for us.”

That’s how Dr. Jill Owens, president of Upper Allegheny Health System, summed up the past few years for the hospitals in Bradford and Olean during BRMC’s annual breakfast meeting Wednesday at the Bradford Club. The pandemic all but shut down revenue streams for the hospitals, such as elective and routine procedures, while costs for everything from agency staffing to supplies skyrocketed.

At least on paper, Upper Allegheny lost revenues approaching $25 million from 2017-21 … in 2022 alone, lost revenues totaled more than $29 million, in great part because $21 million in Medicare Advance funding had to be paid back. Owens noted operating losses would have been even worse without other subsidies Bradford Regional and Olean General received through federal and respective state sources, most made available due to the COVID pandemic.

“I can’t underscore enough the challenges that we’re seeing … rural health care is struggling like I have never seen it,” said Owens, who permanently took the role of UAHS president in September. “I graduated med school in 1997 … I’ve never seen the challenges on the rural side that are really upon us now.”

And she noted that the difficulties Bradford Regional and OGH have been dealing with are in no way unique to the local area. “Throughout Pennsylvania and Western Pennsylvania, everyone is telling the same story,” she said, while noting hospital closures in the state and across the country have increased in recent years.

“Even the big dogs are struggling,” she added, pointing out that larger hospital systems in Buffalo and Rochester in New York and Pittsburgh and Cleveland have faced unprecedented challenges the past few years as well.

The greatest expense increase the healthcare industry has faced is contracting for nurses to fill gaps not covered by in-house staff. Owens noted that Upper Allegheny’s outlay for agency nurses was about $175,000 a month in 2019 — in 2022 its peak monthly expense for agency, or “traveling,” nurses was $2.36 million.

Upper Allegheny found itself squeezed in the double vice of losing nurses to agencies that were offering far greater hourly pay, and then having to pay those agencies ballooned rates to staff their emergency rooms and other departments.

“This is what crippled health care in the country,” Owens said.

She noted that costs for agency nurses have come down in 2023 — and as hourly pay from agencies has fallen nurses are returning to one-location jobs — but Upper Allegheny’s expense for agency nurses is still about $1 million a month.

“And that’s still not going to be sustainable for any length of time,” Owens said, while noting that Upper Allegheny is making inroads on staff recruitment and retention through investment in higher wages.

The Upper Allegheny president said the beginnings of a turnaround can be found in plans she discussed Wednesday, from continuing to seek grants and other financial supports meant to prop rural healthcare facilities to improving contract terms and insurance reimbursement rates and regaining revenues from patients’ visits and procedures through an increased group of physicians.

Upper Allegheny has identified more than $39 million in initiatives for 2023, beginning with a $10 million infrastructure grant for plant improvements at BRMC (although the grant requires an in-kind match over 10 years). Also for BRMC there is a $2 million grant from the state, a $1 million USDA Emergency Rural Hospital Grant and a $2 million grant pending from Highmark.

Owens also said she is eagerly watching the outcome of a Pennsylvania House bill that would provide financial support for distressed hospitals.

In New York, Upper Allegheny expects funding through approximately $1 billion in the Vital Access Provider-Assurance Program — the state’s past-due budget for the current fiscal year could be finalized this week — as well as funding through a New York state and federal match for managed Medicaid.

Other plans for revenues had yet to be presented to the Upper Allegheny Board of Directors, Owens said.

Regarding revenues through increased engagement with patients, Owens pointed to new physicians, physician assistants and nurse practitioners who have joined the system in the past year — or are signed to join. She stressed that Upper Allegheny is continuing to shift toward outpatient visits and procedures as being a critical driver of revenues, which will help maintain the emergency care departments and other services at the two hospitals.

Success in recruiting has actually led to a lack of medical office space in Olean and Upper Allegheny is looking to utilize space in Bradford. Owens even hinted that, if the overall picture for the system continues to improve, some measure of same-day surgeries could return to BRMC in the future.

New general surgeon Dr. Eduardo Morales spoke during the breakfast. A native of Puerto Rico, he served his residency in Brooklyn, N.Y., yet he said he was happy to come to Bradford/Olean because of his smaller village upbringing and his love for nature.

Owens, who still makes rounds herself to ease the workloads of other physicians, said Upper Allegheny is playing up the attractiveness of a rural lifestyle but with a workload that is sustainable in its recruiting efforts.

“The recruitment success that we’ve had is really because of the regional system,” she said. “You used to have a couple of general surgeons at (both BRMC and Olean General) and they would have to take call every other night. … (Physicians) want work-life balance and they can find it here.”

Meanwhile, she noted that BRMC, despite the challenges and drawdown in overall services in 2020-21, remains an important employer in McKean County, with nearly 338 staff — and that’s not including contracted or off-site employees. There are 65 providers available for patient care at BRMC, with 20 physicians and 13 advanced practice providers in the building.

In 2022, Owens said, more than 284,000 lab tests were conducted, 124,713 dietary meals were prepared, 32,252 radiology tests were performed, there were 6,899 occupational health visits, 3,240 cardiac tests performed and 13,178 ER visits. There are currently about 80 residents in The Pavilion care facility.

She stressed the activity at BRMC as she acknowledged the challenge of assuring the Bradford community that the campus remains an important part of healthcare for the region.

The public is invited to an open house from 5 to 7 p.m. May 10 at BRMC. Visitors will be able to tour the hospital and meet with providers, while free health checks will be available in the main lobby.