state, federal funds to

By DEREK BARICHELLO dbarichello@shawmedia.com

Hours after Illinois Valley lawmakers urged St. Margaret’s to develop a plan for expectant mothers following the recent Peru hospital closure, St. Margaret’s officials issued a five-page statement Monday evening saying they will need “an immediate infusion of state support” in order to continue operations and services.

The letter issued by St. Margaret’s President and CEO Tim Muntz and Board Chairperson Terry Judd was provided to state Sen. Sue Rezin, R-Morris, and state Rep. Lance Yednock, D-Ottawa.

St. Margaret’s has said it intends to convert the Peru hospital, which closed Jan. 28, to a Rural Emergency Hospital, a new designation that allows the hospital to collect more funding, but officials said in the letter they “may not have the finances to convert SMH-Peru to an REH without financial assistance from state or federal monies.”

“Without an immediate infusion of cash, we cannot pursue an REH in Peru,” St. Margaret’s officials said in the letter.

In the letter, St. Margaret’s officials said they would like to bring back obstetrics services, but called it a challenging service to provide because of the economics of reimbursements and other factors that have resulted in other Illinois hospitals to discontinue the ser- vices.

St. Margaret’s officials also said they need to shore up the financial situation with their Spring Valley hospital, which remains open as a full-service hospital and emergency room. Officials said they have a backlog of bills for both facilities.

“The amount needed to accomplish both opening the REH and temporarily reopening OB in SMH-Peru, and continuing operation in SMH-SV is significant,” St. Margaret’s officials said in the letter. “The reason OB would be temporarily at SMH-Peru is that it would need to move to SMH-SV if SMH-Peru is designated an REH.”

Officials acknowledged that they are exploring options, including acquisition by a larger health system.

“We would like to engage state policy markers in a pilot or demonstration program, which keeps OB available in our area and in similar areas across the state who have faced this dilemma or will face it in the near future,” St. Margaret’s officials said in the letter, adding that the financial crisis facing St. Margaret’s in Spring Valley and Peru is not unique to the region. “Just a few days ago, the Illinois General Assembly and governor recognized the crisis in health care finance by approving $460 million in emergency relief funds for hospitals statewide. As two general acute care hospitals, SMH will receive a combined $1.2 million approximately, once approved by CMS, expected in April. This is greatly appreciated, but more is needed immediately.”

Officials outlined within the letter the background of St. Margaret’s acquiring IVCH in 2021, a process that started in 2018. St. Margaret’s assumed responsibility for underfunded pensions, to the tune of several millions, in the acquisition.

Despite a shared $8 million in COVID relief funds within its Sisters of Mary of the Presentation, revenue was lost from suspending elective surgeries and a drop in outpatient and inpatient activity.

Staff shortages also became problematic for the Peru hospital, officials said. Staff wages were increased, but could not compete with wages offered by agencies of larger, competing health systems. Retention bonuses and sign-on bonuses were offered, but did not prove successful.