The Asante emergency room entrance in Medford. Asante did not respond to the Dollar For report but said it has provided nearly $177 million in community benefit spending — which includes charity care — from Oct. 1, 2021, to Sept. 30, 2022.

An Asante official on Thursday said the health care provider is creating a “pool of funds” in anticipation of potential payouts amid an investigation into alleged drug diversion by a nurse at Rogue Regional Medical Center.

Asante Senior Vice President and Chief Financial Officer Heather Rowenhorst, who presented an “Asante Health Systems Report” during the city of Medford Hospital Facilities Authority Board meeting Thursday, gave an overview of the hospital’s financial condition. The board meets once a year and helps oversee hospital entities within the city.

After Rowenhorst’s presentation, board member Shane Sevcik questioned her about an issue that was “obviously hugely in the news right now,” asking whether Asante was preparing for potential financial impacts.

“Have you guys started budgeting any impact from recent … medical issues that have happened in the hospital system?” Sevcik asked.

Rowenhorst said Asante had malpractice coverage, as well as excess carrier coverage, as “the first layers of responding to that.”

“But, internally, we are creating some pool of funds for kind of the unknown of the dollar amount and the unknown of the timing.”

She said Asante is “secure from a malpractice standpoint.”

“We have three excess carrier layers on top of being self-insured. And then, internally, we are also strategically moving funds around and reducing our risk in areas in case of need — that we need to do large payouts,” she said.

“But it’s still unknown at this time.”

Rowenhorst’s response marks the first time an Asante official has publicly alluded to potential ramifications of the investigation of alleged drug diversion by a hospital nurse.

Police and Asante officials have provided few details about the investigation, first reported to Medford police in early December. Since the investigation began, Asante officials have repeatedly declined to comment publicly or confirm alleged victim totals.

Interviews by the Rogue Valley Times with alleged victims’ family members showed that some deaths occurred between November 2022 and July 2023. At least two local law firms say they have found cases dating back even earlier and that the number of potential alleged victims could be several dozen.

Asante first made calls to alleged victims and their families in November and December 2023. Another round of phone calls, identifying additional alleged victims, went out last week.

While police have not named a suspect, a civil suit filed Feb. 26 by Idiart Law Group identifies 35-year-old Medford RN Dani Marie Schofield as a co-defendant with Asante. The lawsuit — the first related to the drug-diversion allegations — seeks $11.5 million on behalf of the estate of 65-year-old Horace “Buddy” Wilson, who fell from a ladder Jan. 27, 2022, and was admitted to Rogue Regional with a lacerated spleen and broken ribs.

In the following weeks, Wilson developed persistent, treatment-resistant sepsis and eventually experienced multi-system organ failure. Wilson died Feb. 25, the suit alleges, after Schofield repeatedly replaced the fentanyl in his IV with tap water. According to court documents, Wilson was “weaned from sedation and recovered enough mental function to communicate to the ICU staff that he no longer wished to live this way.”

Central Point attorney Justin Idiart recently said his firm has 11 cases for which retainers have been signed, and another 17 are under evaluation.

Medford police Lt. Geoff Kirkpatrick reported that police had no updates on their investigation as of Thursday afternoon.

Elsewhere on the financial front, Rowenhorst reported the hospital had made progress toward recovery after weathering “the storm from a COVID standpoint.” She said increased personnel costs and double-digit price hikes in supplies and medications had also hurt Asante financially.

“As a reminder, in fiscal year 2022, Asante lost $61 million. … As a management team, we chose the path of staying open and not shutting down service lines as we were in the middle of COVID,” she said.

That fiscal year, she said, two major things hit Asante’s financials: skyrocketing nursing rates, and travelers and contract labor.

“We went from paying $75 an hour for contract labor, and had roughly 5% of our employees that were contracted out, to $225 an hour in the middle of fiscal year 2022 … and almost up to 15% contract labor.”

Additional revenue loss that fiscal year, she noted, could be linked to an inability to discharge patients from the hospital into skilled nursing facilities.

The following fiscal year, Rowenhorst said, Asante “started kind of our financial road to recovery.”

“We did make quite a bit of headway and, in fiscal year 2023, we ended the year at a $33-million loss, so good improvement … $61 million to $33 million — so heading in the right direction,” she said.

“For fiscal year 2024 … we’re actually, from an operation standpoint, at a breakeven, which is great success.”

Rowenhorst said Asante had experienced “some pretty large changes within our (organizational) structure,” including new CEOs for hospitals in Medford and Grants Pass.

“So the team,” Rowenhorst said, “is coming together, all adding their strengths, and really excited to take on this financial recovery, as well as change the culture here at Asante.”