BEND — In anticipation of amassing steep financial losses, St. Charles Health System negotiated with vendors to delay payments and refinanced its debt, officials said.

Despite these steps, Experian, a credit reporting company, gives the health system a credit score of five out of 100, with the higher number indicating a healthy financial picture. The low score tells creditors that there is a “significant probability of delinquent payment,” according to Experian.

On a financial stability scale of one to five, Experian ranked the health system at a three, representing a 2.95% risk of severe financial distress in the next 12 months, according to the Experian report. The lower the rating, the lower the risk, according to Experian.

In a review of the credit summary for the health system, payments are increasingly late with 15 accounts that are beyond the due date, according to the Experian report. The industry standard is 12 days, according to Experian.

The financial losses are cause for concern for the community and the employees, but are not unheard of in the health care industry. The demands on the hospital during the past two years of the COVID-19 pandemic have pushed up labor costs, delayed or canceled profitable nonemergency surgeries, and caused longer hospital stays because of difficulties discharging patients to other facilities, according to the hospital system, which is the region’s largest employer with 4,500 employees.

“Of course, nurses are concerned,” said Joel Hernandez, a registered nurse at St. Charles and vice president of the Oregon Nurses Association board of directors. “More than that, they’re angry and deeply frustrated.”

In unaudited financial statements, for the first quarter of 2022, the health system reported a $48.6 million loss, of which $31.5 million was related to a net loss of investment income. There was no explanation of what kind of investment losses the hospital system experienced.

The health system also is repaying the federal government pandemic relief funds in excess of $1 million a week, according to the financial statement.

What’s more, operating expenses increased $46.5 million, a 21.4% increase for the first three months of 2022. The hospital system experienced a $36.2 million increase in total salaries and wages over the prior year due to higher volumes, general wage rate increases and a reliance on $13.4 million worth of contract labor, according to the unaudited income statement.

“St. Charles has been paying thousands and thousands of dollars to travel nurses, rather than using those funds to recruit and retain permanent staff, nurses who live right here in our community,” Hernandez said. “St. Charles management has shown over and over again that they aren’t able to lead effectively.”

The pandemic pushed the hospital system and the staff beyond its capacity, making it difficult to resume surgeries and other services, according to the financial statements.

Even as the pandemic waned, the hospital system in May was forced to lay off more than 100 workers, most of whom didn’t have direct patient contact. The CEO stepped down and the chief physician executive was laid off. At the same time, about 300 hospital medical professionals at the St. Charles Medical Group filed for union protection in an attempt to have a say in how patients are treated.

In the midst of all this turmoil, the health system has repeatedly said it is not for sale, said Dr. Steve Gordon, interim president and CEO of St. Charles Health System.

“We have not received any offers,” Gordon said. “We are not soliciting offers.”

Meanwhile, the Oregon Health Authority is maintaining a watchful eye over the health care industry, said Liz Gharst, health policy communications officer at the Oregon Health Authority. The hospital system is not required to file second quarter financial statements until October, Gharst said.

St. Charles Health System isn’t alone in its financial turmoil.

“The state has been working with stakeholders like the Oregon Association of Hospitals and Health Systems and the Oregon Health Care Association, as well as the Legislature and the governor’s office to discuss the current financial situation,” Gharst said. “The Oregon Health Authority is working on an ask to the emergency board that focuses on staffing capacity issues in hospitals and partnering with Oregon Department of Human Services on an ask related to long-term care capacity issues.”

It will be up to lawmakers to decide to assist Oregon hospitals, Gharst said.