Floyd County hospital asks for $500K to stem Medicaid losses

By Bob Steenson, bsteenson@charlescitypress.com

Citing growing net losses due in large part to changes in Iowa’s privatized Medicaid reimbursement rates, the Floyd County Medical Center is asking county taxpayers for half a million dollars in support in the next fiscal year.

Representatives of the county hospital made their case at the Board of Supervisors meeting Monday morning.

Hospital Administrator Rod Nordeng and Chief Financial Officer Ron Timpe told the board that the hospital has had a net loss of $323,500 in the fiscal year that ended June 30, and has already had a net loss of $239,300 in the first five months of the 2018-19 fiscal year.

“It’s not an easy request for us, because, as you know, the past two decades we’ve not received county financial support,” Nordeng said.

He said the Floyd County Medical Center is now the only county hospital in the state not receiving local county property tax dollars.

Timpe walked the supervisors through several pages that compared the Floyd County hospital with other area county hospitals, in Britt, Cresco, Hampton, Osage and Grundy Center.

The figures showed all the other hospitals receive tax support as a significant part of their revenue, they all have a higher average amount of operating cash on hand than does Charles City, and they all have higher percentages of cash on hand compared to gross charges and to total expenses.

Timpe also discussed how much tax support county hospitals receive statewide.

There are 43 county hospitals in the state. All of them except for Floyd County receive annual tax support ranging from several hundred thousand dollars to several million dollars.

The average annual county property tax support for all county hospitals in Iowa is $1.4 million each. That figure doesn’t include Broadlawns Hospital in Polk County, which is so much larger than all the others — receiving more than $60 million in tax support in the current year — that it would more than double the state average.

Of the counties with a population size closest to Floyd County, the average local property tax support for their county hospitals in the current fiscal year is $1.6 million each.

Nordeng told the Press in an interview after the meeting, “We’re the outlier right now. It’s not like we got $2 million last year and we’re asking for $2.5 million now. Another way to look at it is we’ve probably saved the county $20 million over the last 20 years.”

Nordeng told the supervisors that changes in state Medicaid reimbursements since Iowa let private companies take over management resulted in more than $740,000 in reimbursement losses to the hospital in the last fiscal year.

With the re-election of Gov. Kim Reynolds, who supports Medicaid privatization, and continued Republican control of the Legislature, “We don’t see that changing in the future as far as the Medicaid structure,” Nordeng said.

Supervisor Chairwoman Linda Tjaden asked if the hospital is trying to be “at the top of everything we can provide” with the newest facilities and the most expensive equipment, or if there are areas where cuts could be made.

“We definitely look at the services we’re providing,” Nordeng said. For example, he said, having an obstetrics department costs more than it brings in, but it is important to the hospital to be able to deliver the 75 to 80 babies it delivers each year.

That’s one area that might have to be looked at if funding isn’t available, he said. Another would be staffing the emergency room with physicians assistants and nurse practitioners instead of having physicians available 24/7 as is done now.

The emergency room and the operating room are definitely expensive parts of the hospital he said, but they are also “the basic building blocks” of what makes a hospital.

Nordeng said staffing levels would have to be looked at if cuts are needed, but “we’re pretty lean” already.

He also said cuts could be made in facilities maintenance and updating, but those things end up costing more if delayed.

Nordeng said a couple of changes already made — including closing the Nashua clinic and finding another organization to take over the Meals on Wheels program — will help the hospital’s bottom line, and it is continuing to look at ways to partner with area hospitals in Cresco and Osage and at other ways to cut expenses.

“We’ve got some really good, positive changes happening,” he said, “but you almost can’t adjust fast enough with that Medicaid reduction. It’s not going to go away.”

Almost all of the county hospitals in the state are able to levy their own county property taxes, at a rate determined by a board of elected hospital commissioners.

Floyd County and Grundy County are the only two hospitals left in the state classified as memorial hospitals, managed by a board of appointed directors and without their own taxing authority.

Nordeng said it would take a vote by county residents to change the status from a memorial hospital, and that’s a possibility, but it hasn’t been discussed much up to now.

“The majority of people certainly would want to maintain our county hospital,” he said, adding, “It’s a huge factor for recruiting business.”

Nordeng shared some statistics with the supervisors from the past fiscal year.

“We had 968 surgical cases,” he said. “We had over 5,600 ER visits. Over 260,000 lab tests were performed, 12,000 radiology procedures, 13,000 physical therapy treatments and we had over 1,500 patient days in our hospital.”

The hospital has a staff of 218 and a payroll of $12 million, and is debt-free.

The supervisors took no action on the hospital’s funding request. They will consider it along with other funding requests and county department budgets as they continue working on the overall county budget for the new fiscal year that begins July 1, 2019.

A public hearing needs to be held and the final county budget passed and submitted to the state by March 15, 2019.