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home : news : north central illinois   April 29, 2016

5/24/2013 2:57:00 PM
Perry Memorial to close OB department

NT Staff

PRINCETON — Citing changes in reimbursement at the federal and state levels, Perry Memorial Hospital has made the decision to close its Women’s Healthcare Unit, by the end of this year.
The closing includes OB, labor, delivery and nursery by Jan. 1, 2014, pending regulatory approval, according to an announcement from the Princeton hospital.
“We believe that almost everyone recognizes that healthcare is dynamic and constantly changing,” said Rex Conger, chief executive officer for Perry Memorial Hospital, in the press release. “Healthcare facilities and providers across the nation are impacted by these changes and are attempting to adjust so they can continue to serve the healthcare needs in their area.
“Perry Memorial Hospital has not been immune. Over the past 10 years we have experienced regulatory changes, changes in patient volumes, payer mix, providers and significant reductions in reimbursement. For the fiscal year we just finished on April 30, we are showing a year-to-date loss of over $640,000 before our audit is complete.”
The closure of the Women’s Healthcare Unit will make St. Margaret’s Hospital in Spring Valley the only hospital in Bureau County to handle childbirths.
Other challenges Perry is facing include changes resulting from the Affordable Care Act, Conger says. The federal government is proposing both legislative and regulatory Medicare cuts in reimbursement for services provided by hospitals, according to the press release from the hospital.
Perry is expecting to receive about $546,000 less in reimbursement from Medicare during the hospital’s current fiscal year that starts May 1, according to the hospital. Beginning with the state’s new fiscal year, Perry’s reimbursement is being reduced by $600,000 every year going forward. Perry Memorial officials are is anticipating at least $1.1 million less in reimbursement during the current fiscal year “while trying to provide the same level of care.”
Conger said Perry Memorial’s service area has seen a steady decline in individuals of childbearing age. He said the latest census data shows the average age of population served by Perry is now greater than 45 years old. In the past 10 years, the volume of deliveries at Perry Memorial has declined 38 percent, “and we have been below 100 deliveries per year for the last two years with about half of our patients using Medicaid as their source of payment,” Conger said.
“The state of Illinois, historically, is significantly behind in payment of claims and when the state does pay, they pay the hospital an average of 17 cents for every dollar’s worth of care provided,” the release said.
Therefore, he said, Perry’s Women’s Healthcare Unit service line is no longer able to support itself.
Over the past several years, Perry Memorial has seen losses from the Women’s Healthcare Unit of more than $1.6 million, and last year’s loss was $500,000. This requires the other revenue generating departments in the hospital to cover the losses, the release said.
“If the State of Illinois’ late payment and poor reimbursement rate were the only challenges that Perry Memorial was facing, this would not be an issue we would need to address now. However, as noted earlier, we have other challenges we are also facing,” the release said. “All of these changes have forced us to look internally at what we can do to assure the long term stability of Perry Memorial Hospital both from a revenue and expense perspective.”
Hospital administration plans to emphasize major services such as orthopedics and all other surgical procedures. In addition Perry Memorial is looking to add some new services that could provide additional volume and revenue.
“We want everyone to recognize that as part of this change, Perry will have the capability to deliver a baby in the Emergency Department. Similar to every other type of Emergency that comes through the door in an Emergency Department, our staff will be prepared to care for Emergency deliveries,” Conger said.

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