Nursing home closure impacts hospital budget

SLAYTON — Favorable budget trends this spring at Murray County Medical Center in Slayton are about to be tested by the closing of the city’s nursing home.

The Slayton Rehabilitation and Healthcare Center, which until several weeks ago housed 38 residents, has completed its closure process. The facility was shut down three weeks ahead of its projected July 19 closing date.

“The sign’s on the door,” said Murray County Commissioner Jim Kluis of Slayton. “That means everyone has been relocated.”

Commissioner James Jens of the Lake Shetek area said he heard from one laid off employee who had hoped to be able to work until July 19, but that otherwise the early closure hasn’t led to objections.

With the nursing home fully closed, the Murray County Medical Center has started to see a decline in revenue from not having its resident population for which to provide medical services as needed.

“We’re already seeing the downturn we expected,” said MCMC Chief Executive Officer Michael Ladevich. “Nursing home residents are among those most likely to require inpatient care. Acute care is where hospitals get the highest amount of revenue.”

MCMC has estimated a 9 percent reduction in its inpatient volume as a result of the nursing home shutdown, which was announced this spring.

That change poses an added obstacle to the goal of at least partly reversing a long term revenue decline. It’s occurring as May 2019 statistics showed significant upward trends.

“The timing is difficult because May was a very good month, one of our recent best,” Ladevich said. “We’ll be working to sustain that progress as much as possible.”

MCMC’s most recent monthly service count, income statement and balance sheet show that several kinds of services have posted year-to-date declines over 2018 but saw volume increases for May compared to last year.

Upswings for May occurred in acute patient days (73 compared to 47), emergency room patients (109 after 103 a year ago), CT scans (up to 85 from 73).

Additional service categories show increases for both May and year to date totals. Examples include clinic visits, MRI scans, ultrasounds, and laboratory tests.

Ladevich said steps are being considered to address ongoing downward trends in the areas of orthopedic surgery and physical therapy, as well as swing bed admissions.

MCMC continues to operate with enough cash on hand (which grew to $562,000) during May. For the month it had a $107,647 net loss after depreciation, less than half the $276,139 net loss that was predicted and down from the $141,225 net loss for May 2018.

The net loss is a reflection of $1,376,579 in total revenue for the month, $1,365,802 for operating expenses, and an additional $111,185 cost for depreciation and interest expense.

The single largest cost item, about half the budget total, is the salaries and wages paid to staff. That total cost was almost the same thus far in 2019 as it was for the same time period last year. The total climbed to $3,219,480 from $3,210,006.

MCMC still has two Slayton-based assisted living centers. They’re likely to help generate stable or increased numbers for many MCMC services.

“We continually look for ways to offer a full range of services and stay within the budget,” Ladevich said. “Some of it involves reaching out to the public with fundraising and marketing.”