Skagway clinic projects $394,000 overrun tied to a doctor's contract

Dahl Memorial Clinic expects to overspend its 2026 budget by about $394,000, according to the clinic board's Oct. 29 update to the Skagway Assembly. The figure comes from Executive Director Albert Wall's Aug. 19 memo, attached to the update, and assumes every pending grant arrives as estimated. The update gives no newer estimate and does not say whether any grant has been awarded.

One doctor's contract cost more than the entire gap. The clinic hired the doctor as a municipal employee Oct. 1, 2025. In the last week of December it decided not to extend the contract but paid it through April 30, according to Wall's memo. The memo puts the contract's budget impact at $479,927: $202,500 for locum tenens, or traveling provider, coverage, $120,000 in lost clinic revenue and $114,625 in salaries, plus smaller costs such as insurance and housing.

Wall told the Finance Committee Aug. 19 that within about a month the doctor was not closing patient charts, so the clinic could not bill for those visits. The provider was put on a plan of correction and then left for a family emergency. After consulting the borough attorney, the clinic paid out the contract, paying two providers for six months.

Assembly member Jay Burnham said, "I can't think of anything nice to say." Wall told the committee, "I don't think we're going to be over budget that amount of money, but I do think there is a likelihood we will be over budget." He said the rest of the budget was on track, helped by a February fee increase and a higher Medicaid rate.

The 2026 budget counted on $1,375,000 in grants. A $500,000 Community Development Block Grant and a $250,000 National Institutes of Health grant were not awarded. Still pending in August were two SAMHSA behavioral health grants and two Rural Health Transformation Program applications: $2.5 million for emergent services across five clinics and $1 million for Skagway alone. "If none of that money comes through, then we're in a hole $1.375 million," Wall said.

Wall wrote in April that the clinic overspent its 2025 budget by more than $1.3 million. His August memo says he is working with the borough manager's office toward a potential budget amendment request. None is on the Nov. 5 Assembly agenda. That night the Assembly introduces the draft fiscal 2027 budget, which Alaska News reported Oct. 22 would more than double the clinic's sales tax subsidy to $4.3 million. It also holds a public hearing on a resolution stating the borough's intent to transition Skagway health care to the clinic's nonprofit, Dahl Memorial Clinic, Inc.