November 4, 2009

Healthcare system turns the corner financially

By Neal A. Shipman
Farmer Editor

While the McKenzie County Healthcare Systems only turned a $31,485 operating profit in fiscal year 2009, for Dan Kelly, CEO of the healthcare system, turning a profit of any kind was good news in light of the financial troubles facing most North Dakota healthcare systems.
“We like to think that we are turning the corner from the financial troubles that this organization has had in the past,” stated Kelly during the healthcare systems’ annual meeting on Oct. 27. “We are slowly making progress.”
In 2009, according to Kelly, the healthcare system had a good year with all areas of service, with the exception of inpatient admissions being up and the facility reporting an operating profit of $31,485 compared to a loss of $92,038 in 2008.
While that small swing into profitability may not seem like much to some, to Kelly, the swing is huge.
“We were able to show a small profit while paying off the remaining balance of a $532,000 loan to build the Horizon assisted living complex and to purchase a $300,000-plus billing software system,” stated Kelly.
But while Kelly is optimistic about the financial future of the healthcare system, he definitely is concerned what lies ahead with Congress now addressing a major overhaul of the nation’s healthcare system.
“On the whole, critical access hospitals in North Dakota, like McKenzie County Hospital, lose money each and every year because of inadequate reimbursement,” stated Kelly. “So even making a small profit is good. But I have to wonder what will  happen to North Dakota hospitals if the public option of the national healthcare plan being discussed in Congress goes through
“I believe that if it (the public option plan) goes through, it will be the demise of North Dakota hospitals,” reflected Kelly.
Kelly, who serves on a committee examining North Dakota hospital reimbursement rates, says that only 11 of North Dakota’s hospitals are profitable. And that is not a condition that can continue.
“The problem that hospitals in North Dakota face is the low level of reimbursement that is received from Medicare,” stated Kelly. “North Dakota hospitals receive $300 per day less in Medicare payment than the national average.”
North Dakota is one of only four states nationally where hospitals lose money. And that is because of inadequate Medicare reimbursement.
Hospitals, nationwide, according to Kelly, show a profit of 1.34 percent, while in North Dakota hospitals lose 1.54 percent.
“The problem with reimbursement is most noticeable when we look at our neighboring states,” noted Kelly. “While North Dakota hospitals are losing money, hospitals in Minnesota show a profit of 4.4 percent, while Montana and Nebraska hospitals show profits of 3.22 and 5.08 percent, respectively.”
During the business portion of the healthcare system’s annual meeting, Kelly Peterson and Julie Wisness were elected to three-year terms on the board of trustees to replace the vacancies left by Jim Renbarger and Jane Swenson.