Lack of reimbursement forces hospital to close birthing center

hospital_logoKewanee Hospital announced April 12 the decision to close its Family Birthing Center.  Hospital officials cited lack of reimbursement together with the recession as the cause of the closure.   
“It’s really a combination of several things that have brought the hospital to this decision,” said Dan Congreve, MD FACS, General Surgeon and Medical Director of Family Health Clinic and Surgical Services at Kewanee Hospital.   “The first is the decreasing population in the area; less people are using services, the second is the demographics of the population; a higher population age; and third is manpower available; many places have to consolidate services. It all takes a toll.”
The Administration of the hospital was reluctant to make the decision.  “We have a vision and desire to give great health care to the community,” said CEO Margaret Gustophson, “but this was ultimately a financial decision.” 
The birthing department employs 12 nurses who will be given until July 31 to find new positions, either at Kewanee Hospital in a new department or at another hospital.
“It is truly unfortunate that we are forced to make this decision,” stated Gary Pheiffer, Kewanee Hospital Board Chairperson.  “However, due to the lack of state funding there really is no other choice without jeopardizing Kewanee Hospital’s ability to serve the community into the future.”  
During fiscal year 2009, 188 babies were delivered at Kewanee Hospital.  73% of those deliveries were covered by Medicaid (Public Aid), for which the Hospital received less than twenty cents on the dollar in reimbursement from the State of Illinois.  In three years, the Hospital has lost close to two-million dollars on the service.  
“The Family Birthing Center has been a valued piece of who we are for almost a century. I think everyone here would agree that nothing is more rewarding than hearing the lullaby played overhead and knowing new life had entered our world,” stated Margaret Gustafson, Chief Executive Officer.  “Sadly, the overall viability of the hospital has to take precedence in order to ensure continued access to health care services for our community.”
The nearly two year recession has prompted a worsening situation with a growing number of Kewanee’s expectant residents relying on Medicaid (Public Aid).  The overall community is aging with only 19% of the population falling into the child-bearing age group.  The result is a smaller patient base with growing dependence on Medicaid (Public Aid), which the state reimburses much less than the cost to provide care.
The decision was reached following extensive discussions reviewing a thorough analysis of current and future market conditions, financial reimbursement, cost structure, literature, interviews with other Critical Access Hospitals and the impact for the local community.   There are 51 Critical Access Hospitals, including Kewanee Hospital, in the state of Illinois.  Of those 51, only ten are currently offering obstetrics (OB) services.  In the past five years, five other Critical Access Hospitals closed their OB units for many of the same reasons.  By their nature, Critical Access Hospitals focus on preserving access to essential services to their communities.  Kewanee Hospital became a Critical Access Hospital in February 2003 and is a private not-for-profit organization receiving no local tax revenue.  Other public and district hospitals receive local tax dollars.
“This was a very difficult and emotional decision for everyone involved.  Many of our staff, friends and family delivered their children at Kewanee Hospital.  In looking at our future the focus has to be on preserving the Hospital and providing the services necessary to care for the majority of our community,” stated Jennifer Junis, Chief Nursing Officer at Kewanee Hospital.  
The Hospital is currently seeking a permanent closure permit with the state.  The Family Birthing Center will remain in operation through the month of July and will work with current patients on a plan for deliveries after July 31.  Current expecting patients are encouraged to talk with their doctor for delivery options or may contact the Hospital’s Patient Advocate at (309) 852-7897.

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