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Posted on Nov 14, 2014

Hospital will cut services, expenses

With voters last week rejecting a $2.2 million proposed hospital levy, Quincy Valley Medical Center is moving on to Plan B, which includes sitting down with community leaders as well as cutting services and expenses.

“Our plan B is to sit down with our city and mayor and see where they can help us,” CEO Mehdi Merred said last week. “We are going to be formulating a plan fairly quickly.”

A press release issued on Tuesday states the hospital is “hopeful” the Quincy City Council will consider allowing the hospital to transfer some of its $3.4 million in county warrants to the city. At Grant County’s request, the hospital earlier this year asked the city council to consider issuing it $1.5 million in warrants to alleviate some of the burden from the county. The city council has yet to respond.

The hospital, which is operating on $3.4 million in loans from Grant County, must lower its warrant line with the county by June 1, 2015, to $3 million. The county previously had said the hospital must be down to its approved $2.5 million warrant line by Jan. 1. However, last week, county commissioners raised the warrant line and extended the deadline.
The hospital’s board of commissioners and its executives may present a cash-flow projection and repayment plan to the city council on Dec. 2, the press release states.

This is a community issue, said Merred, who also will ask the Port of Quincy, Quincy School District and Grant County Fire District No. 3 for their input. And there is a “sense of urgency,” he added.

The levy, which had to garner at least 60 percent of the vote to pass, is failing at 49.48 percent. About 50.5 percent of voters voted against the levy. The election will be certified Nov. 25.

The split vote in the community could be looked at as a failure; however, it tells him that half the community is supportive of the hospital, Merred said.

The press release from the hospital also states it will begin to look at cutting services and expenses immediately. Hospital officials soon will define and present short- and long-term strategies.

“With disproportionate bad debt and charity care write-offs, the Quincy Valley Medical Center is forced to consider the short-term strategy of cutting expenses and re-evaluating its line of services,” according to the press release.

Net operating revenues are down so far this year – total net operating revenues are at $7.6 million as opposed to $8 million budgeted – and, at this time, the hospital is operating at a $541,000 loss for the year, according to numbers given at the hospital’s October meeting. Bad debt and charity care in September had reached more than $1 million.

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