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St. Joe's financial status is discussed at public meeting

DICKINSON - Officials of Dickinson's St. Joseph's Hospital and Health Center and its owner Catholic Health Initiatives faced a flood of questions for about 90 minutes Thursday evening as area residents sought a better understanding of the facility's precarious financial status.

The "town hall" meeting led by St. Joe's CEO Claudia Eisenmann and Vice President of Patient Care Services April Bishop drew a standing-room only crowed to the hospital auditorium. Eisenmann and Bishop reviewed the hospital's current financial status to explain why it needs to achieve Critical Access status for Medicare reimbursements. Eisenmann said 52 percent of St. Joe's billing is for Medicare reimbursements, but those reimbursements would increase by about $1.5 million per year if it obtains Critical Access status.

The problem is federal guidelines restrict Critical Access facilities from being located within 35 miles of each other. The Richardton Memorial Hospital and Health Center acquired its Critical Access designation in 2001 and is located just 26 miles east of Dickinson.

Eisenmann used average daily revenue and expense totals per patient admitted to the hospital and compared those figures to facilities in Williston and Pierre, S.D., to help explain St. Joe's financial dilemma. She said St. Joe's average revenue per admission is $4,546, while its average expense per admission is $5,249, or a $703 loss.

Meanwhile, Mercy Hospital in Williston averages $5,597 in revenue per admission against expenses of $6,115, and St. Mary's Hospital in Pierre averages $5,760 in revenue per admission against expenses of $5,729. Eisenmann used these two hospitals in the comparison because their annual patient counts are similar to St. Joe's.

"We are much more efficient than our two sister hospitals. You can see where the real problem is on the payment side," she said.

The existing financial problems follow efforts to recover from $13.2 million in operational losses from fiscal 2002 to the end of the most recent fiscal year this past June 30.

Eisenmann said the "fix" is largely a federal matter, as North Dakota for three consecutive years has the lowest rural Medicare reimbursement rates in the United States.

Achieving Critical Access status not only provides additional reimbursements for Medicare services, but also helps pay for infrastructure improvements.

"It's certainly not a secret that our building is a little bit old and we need to do a lot of either repairs to this building or we need to move into a new structure, and this program would help us pay for a portion of that," she said.

Converting to a Critical Access facility also could be accomplished without reducing services. Eisenmann explained under Critical Access you are limited to 25 inpatient hospital beds. You also may have five to seven observation stretchers that may be placed in rooms to hold patients for up to 48 hours.

The average length of stay also must be four days and there must be patient transfer agreements in place with other facilities when other levels of care are required by patients.

Bishop said the hospital would be reconfigured from a 49-bed facility to 25 beds by reducing from eight to four beds in the maternity department, eliminating the 10-bed swing bed unit while maintaining six Intensive Care Unit beds and reducing medical/surgical beds from 25 to 15.

The reductions in beds still meet St. Joe's average daily census needs for the majority of the year for maternity, ICU and medical/surgical.

"That doesn't mean there wouldn't be some challenges when the cold and flu season hits," Bishop said in being able to handle the number of patients locally. "It will happen where we will have to divert some patients."

Eisenmann said the vacated space that would exist as a result of the dropped beds would be used for storage, unless some type of ambulatory services could be generated to fill the space.

When asked why the St. Joe's didn't apply for Critical Access status before Richardton to generate the additional income, Eisenmann reiterated past statements that there was a different strategy in place at the time that was created by others who are no longer here.

"There really wasn't a sufficient population base to make that (strategy) work," she said.

The plan now is to find a way to obtain Critical Access status so other steps can be taken to get the facility to break even financially, she said.

Obtaining the Critical Access status is a larger challenge, however, since talks recently broke off with the Richardton facility. Eisenmann said the Richardton board chose not to accept an offer from St. Joe's, but she refused to discuss that offer when questioned due to proprietary information.

Richardton hospital board member Jerry Messer told Eisenmann, however, "The money you have lost in the last 12 months would have easily covered what we were asking."

Messer went on to say the Dickinson hospital is needed.

"This is one of the most important facilities you have in this community, but so it is for us to have the one in our community. It is just ridiculous the circles we've been running around," he said.

The idea of converting the existing Richardton hospital into a long-term care facility fits their community, Messer said.

"We have an aging population in our community. We'd like to take care of our people in our town as much as we possibly could and that is where they are most comfortable in the late stages of their life, and that is important," he said.

Messer added Richardton also would like to have the opportunity to keep its clinic open.

"Critical access is available to Dickinson. They just have to sit down and discuss the options," he said.

Richardton's plan to convert to a long-term care facility is predicated, however, on obtaining some waivers. Ryan Bernstein, Gov. John Hoeven's legal counsel, said Richardton is seeking an exemption from a state moratorium on adding nursing home beds, a waiver on long-term care payment limits, a waiver of physical plant and life safety codes and a waiver of state law that restricts nursing homes from operating a primary care clinic.

Bernstein said Attorney General Wayne Stenehjem has advised that neither the governor nor the state Health Council can grant waivers on those issues. Instead, the governor's office has tried to provide some grants and loan opportunities to help convert the Richardton facility, Bernstein said.

In a letter received Thursday evening by The Dickinson Press from Hoeven, state Human Services Director Carol Olson and State Health Officer Dr. Terry Dwelle, it states, "If it were simply a matter of acquiring nursing home beds, we could help them accomplish that, but what they're asking for is restricted by state law or CMS (Centers for Medicaid & Medicare Services) regulations. We have proposed that Richardton hospital convert to an assisted living facility. To achieve that goal, we have offered assistance in the form of state and federal loans and grants," the letter states.

Eisenmann said the situation is, "Whatever it is that works for Richardton has to work for St. Joseph's. I don't know if we can find that or not."

Chris Jones, a development and strategy staff member for CHI in its Fargo office, said a lot of the discussions with Richardton officials are confidential.

"It's not that we're trying to hide things," he said.

Messer said, however, that Richardton is "not holding Dickinson hostage" regarding the transfer of the Critical Access status, contrary to the perceptions of some individuals.

"We've never implied that," Eisenmann said.

Jones said it's simply a matter that, "There's not the right avenue to do what we need to do with you."

Which then prompted the question if money is the bottom-line issue, can the public raise what is needed for Richardton to buy the beds it needs to convert to a long-term care facility so it can give up its Critical Access status for St. Joe's. The consensus seemed to be yes.

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