Sky Lakes Medical Center and most other hospitals in the state are dealing with an unusual situation:  We are helping more and more patients heal, yet at the same time feeling a financial pinch.

In December, January and February, Sky Lakes Medical Center, largely due to the availability of the new hospital, was able to take care of a record-setting number of inpatients.

However, Medicare and Medicaid, which comprise almost two-thirds of our business, are not covering the full costs of care for those patients.  Medicare pays only about 80 cents for every $1 of the cost of a patient’s care, and Medicaid pays only about 72 cents for every $1 of cost.

We provide many services that cost more than they bring in – we try to keep care local to reduce the burden of travel because we feel it’s the right thing to do for the communities we serve.  Historically, we’ve looked to other hospital services to make up much of the losses.  But over the past 18 months, Medicare has reduced our average inpatient reimbursement per case by nearly 25 percent.  Our other services are no longer able to carry the inpatient losses.

Since we don’t look to taxpayers to make up this shortfall, this means we are forced to look at our business – just as any other business owner would do – and see where adjustments are required.

Our goal overall is to remain viable while preserving the core operations of an acute care community medical center.  We have responded to the decreased Medicare payments by cutting costs: not filling open management positions, reducing our supply expenses, and we have also been forced to close some money-losing services; the work of some of these services will be absorbed by other departments.

These types of cuts are not new as we react to shifts in the marketplace.  The most recent adjustments have received added attention because they come less than a year after we opened our new building.

Let me be clear:  The new building ins not the reason for the service lines being discontinued.  Increased overhead from the new building accounts for less than $1.50 for every $100 we bill.  Sky Lakes Medical Center is not for sale, and is not in danger of closing its doors.  We are simply responding to changes in our market so that we can remain here for those critical services that our community has come to depend upon.

I hope this helps dispel any rumors you may encounter.

Paul Stewart
President and Chief Executive Officer

Printed in the April 13th edition of the Herald and News