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Short notice of suspension of services at Peru's St. Margaret's hospital 'blindsides' the Illinois Valley

St. Margaret's Health - Peru
via Facebook

It didn't take long for the news that emergency room staffing issues would force a suspension of operations at St. Margaret's hospital in Peru to spread like wildfire.

A letter sent to employees by hospital president and CEO Tim Muntz and board chairman Terry Judd on Friday informing them of the Jan. 28 suspension quickly found its way to social media.

That led to a cascade of questions not only from those who work for the hospital, but also from patients and state and local elected officials like Peru Mayor Ken Kolowski, who say they felt "blindsided" by the announcement in the community about 60 miles northeast of Peoria.

The hospital is contracting with a third-party provider for emergency room physicians, but that contract ends Saturday.

"It was a last resort measure that we had to use these agencies, which come at a cost of at least triple what the obligation would be for our own staff," said Muntz, who said the 50 to 60 agency staff members come at an annual cost of around $10 million.

Muntz said there aren't enough people on payroll to keep the ERs in both Peru and nearby Spring Valley open and fully staffed. Spring Valley will remain open.

Judd said the hospital's leadership knew a day would come when action would need to be taken, but they tried to forestall it in order to continue providing critical services like obstetrics.

"Our main mission is the poor and and making sure that people get these services. And it's, you know, the stress this has caused on all of us. It's not something we like, but the realities have just come home," said Judd. "The financial realities have come home to roost, and we pulled the trigger."

St. Margaret's Health president and CEO Tim Muntz, left, and board chairman Terry Judd
St. Margaret's Health president and CEO Tim Muntz, left, and board chairman Terry Judd

Both Judd and Muntz repeatedly said they don't believe the service suspension shouldn't be thought of as a closure. The hospital system is trying to convert the Peru facility into a rural emergency hospital, or REH.

That's a new designation created through recent regulations issued by the federal Centers for Medicare & Medicaid Services. An REH still provides outpatient services and emergency services, but not inpatient care.

"In my mind, our future depends on this REH getting open. And that means that the Peru hospital has to be open," Judd said. "So we need to get away from thinking for a minute that we're trying to close something just for financial gain or whatever. We're trying to be transparent and provide our people the care they need."

Muntz said the REH designation would qualify the Peru hospital for a $3.5 million annual stipend, and enhanced Medicare reimbursements. St. Margaret's vice president of Quality and Community Services Linda Burt said 66% of the hospital's payments come through Medicare or Medicaid.

The Illinois Department of Public Health (IDPH) was among the agencies that said they were not notified in advance about the plans for a service suspension at St. Margaret's in Peru. A department spokesperson said that announcement was made to employees without either a written notification to the IDPH, or a plan to convert the Peru hospital to REH status.

"Since learning of their plan (Monday) to convert to REH status, IDPH has been actively trying to assist them. We will work with them to do this as quickly as possible to ensure they can provide care to the community, but this is not a process that can be completed within one week," the spokesperson said.

The hospital will need to complete a Medicare enrollment process to switch the status to REH, added the spokesperson. A site visit by IDPH regulatory staff also is required.

In a best case scenario, Muntz said the conversion could be completed within 30 to 60 days. Employees of the Peru hospital were encouraged in the letter to "apply for open, posted position for which you qualify." Muntz said the hospital will "work closely with each and every employee that's affected."

A rural shortage of obstetrics services exacerbated

St. Margaret's in Peru will no longer offer obstetrics services even if it does come back as a rural emergency hospital. The Illinois Valley already has limited options for obstetric and women's health services.

"We are extremely concerned about the elimination of obstetric and women's health services in the Illinois Valley area, providing little notice to expecting mothers and leaving few options moving forward," said Peru mayor Kolowski in an open letter to the community following a Monday Zoom call with hospital officials, state Sen. Sue Rezin , R-Morris, and state Rep. Lance Yednock, D-Ottawa.

Yednock was on a Tuesday press call with hospital administrators, but he declined to speak at length about the situation until there's more clarity on "what we can or can't do."

"We're still trying to navigate this course with the hospital system, the employees and the community," Yednock said.

When St. Margaret's petitioned the state's Health Facilities and Services Review Board to eliminate the OB unit at Spring Valley in 2021, company leadership cited HFSRB statistics showing a need for 16 OB beds in the region. With the closure of Spring Valley, officials said there would still be 19 OB beds split between Peru and OSF Saint Elizabeth Medical Center in Ottawa.

Muntz said he is deeply concerned by a trend of obstetrics units disappearing across western Illinois.

"Kewanee, Princeton, Streator, Mendota, all of the OB units disappeared gradually over the last two decades, I would say. And, you know, it's a huge financial responsibility that results in a financial loss of around $3 million a year. It doesn't really matter about the size of the OB unit; (it) just translates into a larger financial loss," Muntz said.

Judd acknowledged Tuesday that with the closure of the Peru OB unit, the region won't have enough OB beds.

"It's very stressful for us, but we cannot afford to continue to lose $5,000 on every baby we deliver," he said. "If that's what the deficit is, just around that number, we just don't have the resources to do it anymore."

Muntz said around 500 babies were delivered at both the Peru and Spring Valley hospitals last year. Obstetrics was discontinued at Spring Valley in March 2022. Burt said St. Margaret's in Peru expects around 55 deliveries in January, with a usual census around two to three babies born each day.

St. Margaret's is referring patients to hospitals in Ottawa, Pontiac, and Morris for baby deliveries.

An OSF HealthCare spokesperson said the health care system is prepared for increased demand for obstetrics services.

"Being part of a large Ministry, OSF HealthCare has the ability to draw from resources across our many facilities as needed, including Peoria and Ottawa, where we offer full-time OB services. We are also hosting upcoming job fairs as we look to reinforce our staff of highly-trained physicians, nurses and care professionals who provide exceptional quality care," the spokesperson said in an emailed statement.

Judd said filling positions at St. Margaret's has proven difficult, with more than 300 open positions listed not long ago.

Burt said they simply ran out of options to maintain the status quo of continuing to provide obstetrics services in the wake of the expensive post-COVID staffing shortage that she said is a nationwide health care problem.

"What has happened in the last two years, is the cost of temporary staffing to keep up and the two hospitals, you know, it is these temporary agency nurses make 300% what our permanent employees make," said Burt. "You can't do both."

Tim is the News Director at WCBU Peoria Public Radio.