Crittenden Regional Hospital of West Memphis will close its doors on Sept. 7, citing "the challenges of a struggling economy and continued declines in patient volume and reimbursement."
The hospital's board of trustees made the announcement Monday. It said it made the decision after "exploring all possible options with legal and financial advisors." The hospital will stop admitting patients today. CRH clinics and home health and hospice services will close Sept. 5.
"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," CEO Gene Cashman said in a news release. "With counsel from national health care 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."
More than 400 people work at the 140-bed hospital.
Cashman didn't immediately return a call for comment.
Crittenden County approved a 1 percent local sales tax increase in June to get the hospital out of debt. Collection of the tax will not begin as scheduled, the hospital said.
Cashman said in a memo to employees that the hospital had searched for nearly five years to find a solution to the "hospital's financial challenges."
More: See Cashman's intermal memo to hospital staff (PDF).
In 2013, the hospital reported a loss of $2.85 million on net patient revenue of $54.03 million, according to its Medicare cost report. In 2012, the hospital reported a loss of $5 million on net patient revenue of $52.8 million. In 2011, it reported a loss of $3.3 million.
"Despite our best efforts, the combination of challenges we're facing — a changing health care industry, a recovering economy and one of the toughest reimbursement climates in the nation — continues to place mounting financial pressures upon our organization," Cashman said in the statement.
Crittenden Regional also was hurt by failing to lure doctors to the hospital.
"We have had several key doctors retire or relocate from CRH since 2008," Cashman said. "That loss has left a hole that has proven nearly impossible to fill."
The hospital also couldn't attract patients. Its occupancy rate of 45 percent "is the lowest for any hospital in the Midsouth with at least 100 beds," Cashman said.
Still, he said national health care consulting firms had offered advice that had "set our organization on a path to improvement."
But a fire broke out at the hospital in June, leaving the hospital closed for more than two weeks.
"This summer's fire, and the subsequent shutdown, derailed that plan's success," Cashman said. "It was a devastating blow at a time when we would least afford it."