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Healthcare system shows operating loss

Posted 11/21/12 (Wed)

By Neal A. Shipman
Farmer Editor

While the McKenzie County Healthcare Systems saw a record number of patients at its clinic and emergency room during the past year, the system saw a decline in its operating revenues in 2011.
According to Dan Kelly, McKenzie County Healthcare Systems CEO, the system had a net operating loss of $124,543 during the 2012 fiscal year on total revenues of $12,754,673. During the 2011 fiscal year, the healthcare system showed an operating profit of $65,196 on revenues of $10,505,429.
“We lost ground financially from last year,” stated Kelly during the healthcare systems’ annual meeting last Thursday. “The influx of new people into the area isn’t helping us financially.”
But while the system lost money in its operations, Kelly noted that the system remained profitable because of grants and assistance that it has received from the city and county.
Part of the problem that the healthcare system is facing financially is controlling its bad debt that is associated with the increased number of patients being seen, as well as the high cost that the system is paying to hire temporary providers to staff the hospital and the emergency room.
“We had over $1.125 million in bad debt that we had to write off this past year,” stated Kelly.
The financial difficulty that the local healthcare system is faced with isn’t unique says Kelly.
“Of the 12 hospitals serving the oil patch in western North Dakota, only three have operating profits this past year,” stated Kelly.
According to Kelly, in spite of the operating loss, the past year saw major accomplishments for the healthcare system.
“We became affiliated with St. A’s hospital in Bismarck, which will bring us significant technical and administrative support,” stated Kelly. “In addition, we have established an orthopedic clinic, hired new staff, purchased an 11-unit apartment complex and are nearing the completion of the new Connie Wold Wellness Center.”
During the past year, the healthcare system has also completed the design phase for a new hospital and clinic that is being proposed to be built near the existing nursing home.
“The new facility that we are looking at will also include major renovations to the existing Good Shepherd Home, as well as expanding the services that the healthcare system provides,” stated Kelly.
According to Kelly, the healthcare system can afford to service the debt for a significant portion of the new construction costs, but it will also be looking at other options to pay for the new facility.
“Many other hospitals in the state receive some form of city or county sales tax,” stated Kelly. “That may be something that we look at doing as well.”
Kelly also noted that the healthcare system may also need to address whether or not it can continue to operate as a locally-owned facility in the future or if it will have to merge with a larger facility.
“We are currently having discussions with the two hospitals in Bismarck as to how we can move forward,” stated Kelly.
According to Patsy Levang, chairman of the healthcare systems board of trustees, while the board is exploring its options with different larger healthcare providers, the board is overwhelmingly committed to remaining autonomous.
“The board is looking at all possible options to assist us in remaining solid and more efficiently meeting the needs of the burgeoning population,” stated Levang. “But I assure you, that before any action is taken, discussion will occur with the community and specifically, with the healthcare systems’ delegates.”
According to Curt Waldbillig, senior vice president with St. A’s of Bismarck, collaboration is going to be a key to going forward.
“Our emphasis is to help rural areas,” stated Waldbillig, who noted that St. A’s has been working to recruit new physicians to Watford City as part of its affiliation with the McKenzie County Healthcare Systems.
“We believe that healthcare decisions should be made by a local board,” stated Waldbillig. “It is important for us to be good collaborators in rural areas.”
Waldbillig also noted that St. A’s has recently signed a collaborative agreement with the Mayo Clinic which he believes will be of great value to people in western North Dakota who are seeking advanced medical care.
“This agreement allows patients to visit our specialists in Bismarck,” stated Waldbillig. “If needed, we can then send our information electronically to Mayo specialists and save the patient the need to travel there.”
According to Waldbillig, the Mayo Clinic also believes that healthcare should be provided at the local level whenever possible and St. A’s agreement with them allows that.
“Plus, our e-consulting service with Mayo doesn’t cost the patient anything,” stated Waldbillig.
Waldbillig also noted that St. A’s is working with McKenzie County Healthcare Systems to bring occupational medicine to the area within the next 60 days as well as offer additional screening clinics.
“We’re open to helping out Watford City wherever it needs us,” stated Waldbillig.