Jacobson Memorial Hospital Care Center is a critical access hospital in Elgin, North Dakota. (Photo courtesy of Luann Dart/GS Publishing)
ELGIN, N.D. (North Dakota Monitor) A hospital in southwest North Dakota is on more stable financial footing after being approved for an emergency $5 million loan from the Bank of North Dakota.
The loan, authorized during a special session of the North Dakota Legislature in January, has helped the Jacobson Memorial Hospital Care Center pay off its existing debts and build a 30-day cash reserve as it seeks to enter a new era with more financial stability.
“It’s been an amazing last couple of months, and really one of the most amazing transformations that I’ve been witness to,” said Matt Hager, recently elected as chairman of the hospital’s board of directors. “It’s just been unbelievable.”
The hospital had terminated the employment of its previous CEO in November 2025. The board adopted a new strategic plan and began to implement operational reforms and cost-cutting measures, but by January had been in danger of not being able to pay its employees.
Sen. Don Schaible, R-Mott, introduced legislation during the special session authorizing the Bank of North Dakota to issue an emergency $5 million loan at 2% interest. The bill, co-sponsored by fellow District 31 Reps. Dawson Holle and Karen Rohr, passed with broad support.
“Even though they had a vastly improved business plan and a business model that they worked on, it just was very hard to come out from this debt,” Schaible said. “The idea behind that loan was to be a bridge gap loan to try to clear some of that up and get to a business plan that they could afford.”
Schaible, who was born at the facility, said the legislation aimed to give the hospital time to get back on its feet because its closure would have a significant impact on the local area.
“The domino effect of losing them would have been very, very traumatic for the area,” Schaible said. “They’re probably the largest employer. They’re probably the biggest contributor to the tax base. Probably the biggest contributor to the population of the school and losing any of that has a domino effect.”
The loan was approved by the state-owned Bank of North Dakota in early April following a review of the hospital’s business plan. It will be repaid over 11 years. The first year’s payments will be interest only, without repaying any of the principal, to give the hospital time to implement its business plan.
The hospital has used $3 million of the loan to pay off the line of credit extended by First International Bank and repay its debt to vendors.
The board had already begun paying off some of its debt to vendors before receiving final approval for the loan in April, Hager said. The hospital had positive cash flow during the first three months of the year thanks to the reforms put in place over the winter. Hager said the facility is on track to have a consistently positive cash flow by the end of 2026.
“We put a solid plan in place in November, and we’re following that plan,” Hager said.
Hospital leaders developed the plan following a pro bono independent financial assessment conducted by outside healthcare business professionals. Hager declined to share copies of the documents making up that financial assessment, explaining it would take a vote of the board of directors to release the information.
Hager said there has been a lot of support from the community in Elgin and Grant County as the hospital has worked to right the ship.
“It’s just been unbelievable. The leadership within the hospital, just people coming together in this small community and saying this hospital is too important,” he said. “It’s been really inspirational.”
He hopes the Rural Health Transformation Program, a federal initiative expected to provide up to $1 billion to North Dakota healthcare over five years, will benefit the hospital in the long run but cautioned that medical facilities can’t rely on the program to solve immediate balance sheet concerns.
“The overall program does not directly impact operational funding,” Hager said. “I’m a huge proponent of the rural health transformation, but it will take some time for these things to become fruitful.”
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