QVMC committed to revising services if needed
I want to thank George Nutter for his thoughts and welcome this opportunity to respond.
I admit I was confused on what direction George would have us follow. In his editorial, Mr. Nutter offered five different options that would require five different business plans. First, George suggested Quincy Valley Medical Center should be a trauma center only. Next, Mr. Nutter recommended the medical facility become an urgent care center only. He then suggested we align ourselves with Samaritan or Confluence Health and sell our business. He later portrayed Coulee Medical Center as a model facility, not funded by county warrants. Coulee Medical Center is an 80,000-square-foot hospital, built in 2011, that offers full OB/GYN services in addition to a robust surgical program. Finally, George Nutter suggested we house a satellite clinic for the VA.
I propose we analyze these suggestions. We agree with the clinic/ER model, in fact we are already offering these services though we do much more than triage, as George alluded. Contrary to his statement, patients are stabilized, treated and sometimes admitted to the hospital. In fact, in 2013 only 15 percent of our emergency patients were transferred to another facility. We know, however, that 80 percent of our bad debt, or $1.1 million, comes from the Emergency Room.
How about selling the medical center? Well, let me ask this: Let’s assume someone could afford it, would you buy our business? On the other hand, we like the idea of Quincy Valley Medical Center partnering and aligning with other regional facilities and believe there could be cost savings and revenue-generating opportunities without selling the business.
George seemed to question our decision to lease space for the physical therapy center rather than locating those services in the Friends’ Church on the adjoining property. Three years ago, when we purchased the property we contemplated George’s suggestion. We quickly determined that for QVMC to use the old church for physical therapy, the fire suppression, plumbing, insulation, renovation and ADA compliance would have cost about $150,000 — twice the lease amount for our downtown space. The church is used for storage, staff training and board meetings. It is the only room in QVMC where more than 20 people can gather at one time. On the other hand, I am happy to report the purchase of the church included the house on the northeast corner of the block. Since its purchase in 2011, the house has been rented and has generated $850 a month.
Finally, I want to address the question about relying on property tax payments. George asked the question “Then what?” in reference to new construction within our district. George’s comment “relying on tax payments from construction will only last as long as construction continues” is incorrect. Unless the hospital district is devalued, the hospital is guaranteed at a minimum 1 percent more than the previous year’s amount. Simply stated, this year’s new construction will be next year’s property tax basis. Anticipating positive cash flow from new construction is not a strategic plan but a realistic projection that cannot be ignored. In fact, it would be foolish to make decisions without accounting for it.
The QVMC Board of Commissioners and administrative team are committed to revising, cutting or expanding its service line if and when necessary. Our strategic plan, drafted in 2007, delineated a course of action that emphasized diagnostic, preventive outpatient medicine to break away from the traditional, non-profitable emergency room, hospital and long-term care model. That strategy was successful and for the first time in 30 years we were profitable in 2008, 2009 and 2012. Our warrant line with the county is $3.5 million. Within the next two weeks, our warrant line is anticipated to be as low as $3 million. Three years ago, our warrant line was $2.9 million. In other words, over three years, our average cash short fall was about less than $40,000 a year.
We plan to invite our community to be part of a strategic planning process and determine a path that this community can and will support. Let’s not forget, however, that we are a growing and changing community. Our local hospital should grow and change in alignment with the economic growth and change of Quincy.
Mehdi Merred is the CEO of Quincy Valley Medical Center.