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Posted on Nov 26, 2014

Hospital plans $1 million in cuts — for start

Quincy Valley Medical Center on Monday announced it will use a combination of fee increases and cuts to save $1 million in the coming year.

Among the largest cuts is the elimination of the surgical program, which should save the hospital about $500,000 a year. Those cuts include the elimination of four hospital positions and services from a local surgeon who was contracting with the hospital.

The hospital in 2015 also will cut about $166,000 from its clinic, which includes the elimination of some clinic staff. Various other cuts will come in housekeeping ($16,200), radiology ($10,400), registration staffing ($12,000) and a 5 percent reduction in wages for all of the six employees on the hospital’s administrative team ($20,000).

To generate more revenue, the hospital also will increase its fees for patients ($120,000) and increase meal costs for employees ($8,000). The hospital also will add four beds to its 14-bed, long-term care facility, generating about $175,000 next year.

The cuts and revenue-generating strategies were announced as the hospital’s board of commissioners approved a $10.3 million budget for next year. If all goes as planned, the hospital should see a $65,356 profit next year, according to hospital numbers.

“The doors will continue to stay open for as long as we can continue to afford to do so,” said Anthony Gonzalez, board chairman. “Or for as long as we’re allowed to.”

However, commissioner Randy Zolman, after the meeting, questioned whether the cuts were deep enough. Zolman said during the meeting that the hospital needed to make at least another $1 million in cuts to be viable next year.

“It’s a start,” Zolman said of the cuts.

On Monday, hospital commissioners were up against a state-mandated Dec. 1 deadline to pass a budget for next year. The cost-saving measures were determined Nov. 20 at a meeting of the board’s financial committee. The board is expected to review the cost-saving measures monthly and institute more changes as needed.

“If we need to, we will cut more services in the immediate future,” Gonzalez said.

Taxpayers three weeks ago voted down a proposed $2.2 million tax levy that would have been used to pay down the hospital’s $3.4 million loan from Grant County. The hospital now has six months to bring its warrant line with Grant County down to $3 million. County commissioners earlier this month sent a letter to the hospital, stating that the warrant line must be at $3 million by June 1.

“It’s do or die time, quite frankly,” controller Dean Taplett said.

The goal, with the cuts and revenue increases, is to get that warrant line down between $2.6 million and $2.8 million by June, hospital CEO Mehdi Merred said.

Financial information given at the Monday meeting shows the hospital is operating at a $551,490 loss so far this year. Taplett expects that number to increase to about $600,000 by the end of the year. Last year, the hospital lost $611,515.

The hospital so far this year has written off more than $1 million in bad debt and charity care.

While commissioner Don Condit voted against the budget and commissioners Gonzalez, Zolman and Bob Poindexter voted for it, reactions to the new budget and cuts in service were mixed from commissioners.

Poindexter questioned what the hospital was showing the public by cutting “$5 here and $10 there.”

However, Merred argued these are no small cuts at $1 million over 12 months.

Adding beds to the long-term care unit is a “reverse strategy” of only three years ago when beds were taken away because the unit costs the hospital money, Condit said.

“There isn’t a nursing home in the state making money,” Poindexter agreed. “This makes almost no sense to me.”

The long-term care unit, which has a waiting list for potential patients, has a long history of losing money, Merred admitted. However, to shut it down is a disservice to the community, he said. Adding beds decreases that loss, he added.

The surgical program performed 239 procedures last year and has performed 113 so far this year, according to hospital figures. It makes more sense to cut the surgical program because not only will that program require new equipment to stay operational but the directors overseeing that program is leaving the area for a new job, Merred said.

Zoland questioned several times why the hospital isn’t asking the public what services it wants from its hospital. Zoland proposed surveying the community and then putting another maintenance and operations levy on the February ballot.

“If we don’t ask, we don’t know,” he said.

But a survey would get little results, said Gonzalez, who offered to give Zoland $1, to be donated to the hospital, for every survey sent back.

“We don’t have time for that at this point,” Merred said.


— By Jill FitzSimmons,