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FCMC beginning to recover financially from COVID-19

FCMC beginning to recover financially from COVID-19
Admission Clerk Brenda Schmitt staffs the patient/visitor check-in desk at the Floyd County Medical Center. Submitted photo
By Mary Pieper, Special to the Charles City Press

Floyd County Medical Center is making strides in its economic recovery from COVID-19, but the future is still uncertain, according to Rodney Nordeng, administrator of the hospital and clinic.

“Our normal will be a new normal and not like our prior normal,” he said, noting he doesn’t know how long the pandemic will impact FCMC.

Like other hospitals across the country, FCMC experienced revenue loss due to the pandemic because it wasn’t able to perform elective procedures and surgeries due to the need to prevent the spread of COVID-19.

When the pandemic hit in March, FCMC reduced its non-essential staff through a three-step process: voluntary days off, then voluntary temporary layoffs and, finally, involuntary temporary layoffs.

Of the total hospital and clinic staff of 211, nearly 50 were laid off temporarily, according to Nordeng. He said 37 of those layoffs were voluntary.

“We were facing millions of dollars in losses and the real potential that cash on hand would evaporate in days, and if the losses continued longer we would need to move money that we have set aside for new equipment,” he said. “It would take years to build this account back up.”

At the time FCMC officials weren’t aware the hospital would receive a $678,000 stimulus check or have its $4.38 million Payroll Protection Program (PPP) forgivable loan application approved, according to Nordeng.

The hospital posted a loss of $774,102 for March, but had a gain of $282,489 in April, he said.

Nordeng attributes this gain to the stimulus check from the government, the recovery of $294,016 in additional revenue through FCMC’s 340B pharmacy program, and a $192,323 wage cut.

“Without these three items, we would have had a loss for the month of $881,850 because our patient charges were down almost $1.9 million,” he said.

The deposits also “provide us with additional resources as we work through the pandemic and continue our journey to achieving our needed patient volumes to meet next year’s fiscal budget,” Nordeng said.

The laid-off employees are coming back and patients are now returning for elective procedures and clinic appointments, according to Nordeng.

He said FCMC is currently at approximately 80 percent of its pre-pandemic patient level.

“We are using every opportunity to get the word out that it is safe to return,” Nordeng said.

Getting patient volume back to normal is key to FCMC’s future financial health, he said.

The new fiscal year begins July 1. If the hospital achieves 100 percent of its budgeted patient volume during that year, it will post a revenue gain of $70,100, he said.

However, if the average patient volume for the 2020-21 fiscal year is at 90 percent of the budgeted amount, the hospital is projected to lose nearly $2 million. The loss is expected to hit $4.2 million if FCMC maintains its current patient volume of 80 percent for the entire upcoming fiscal year.

Those three budget projections don’t reflect the COVID-19 relief dollars the hospital has received this fiscal year, according to Nordeng.

He said FCMC can’t go into the next fiscal year accepting a significant loss with the knowledge that it now has that relief money to assist it.

“There are so many unknowns of what we will face in the next 12 months and perhaps even longer, so accepting losses in the millions of dollars cannot be an option,” Nordeng said.

If additional temporary employee layoffs are needed in the future, “any reductions will be lessened and more variable across departments,” Nordeng said.

“Reducing staffing is never easy and the decision to reduce is never taken lightly,” he said.

As the FCMC administrator, “I understand the personal toll on those who are off work and those still working without their colleagues,” Nordeng said.

Although FCMC does not have a hiring freeze in place, “we need to be thoughtful and financially prudent in reviewing each opening to determine if we fill or complete the position’s work differently,” he said.

FCMC officials also are committed to keeping it an independent critical access hospital, according to Nordeng.

“Mergers and acquisitions over the past three decades in health care were significant, and the decision was to remain independent over those decades and it will remain so going forward,” he said.

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