Mercer Health revenue down 50%

COLDWATER - Mercer Health's financial turnaround over the last fiscal year may help cushion the blow from disrupted operations due to the COVID-19 pandemic.

Even so, hospital administrators are looking at various funding options as they start the new fiscal year in uncharted waters.

Chief Financial Officer Jon Dingledine told the board of governors during their monthly meeting on Wednesday that patient volume across the organization was "almost nonexistent."

"We have purposefully postponed or canceled things that could be postponed - elective procedures, things of that nature. Then also we have seen a decline in overall patients coming to us," he said.

Revenue for the hospital is down 45% since March 19, the day elective procedures began to be postponed, and is down 50% since April 1, Dingledine reported. He expected the hospital would begin to see the cash impact of reduced patient volume and revenue flow starting in mid-May.

Officials have been looking at several financial aid options, including those offered to medical organizations through the Coronavirus Aid, Relief, and Economic Security Act. Included in the bill was a Public Health and Social Services Emergency Fund to help hospitals offset the costs of COVID-19 response efforts and the financial impact due to reduced revenue, Dingledine said. Mercer Health had received almost $1 million from that fund, and about $460,000 through some other funding options made possible under the bill.

Money for the Payroll Protection Program allowed under the CARES Act has already run dry, but Dingledine said a second bill would replenish funding for the program, and the hospital's application is ready.

Hospitals also may apply for accelerated Medicare paymentsthat allow them to receive up to six months' worth of advance payments. About two weeks ago, Mercer Health received about $5.1 million in advance payments, Dingledine said.

However, the $5.1 million isn't a grant. The money reportedly needs to be repaid within one year of being received, so while the money helps in the short term, officials are concerned about their ability to repay the money if patient volumes don't return to normal soon.

Board members also approved a motion to allow hospital officials to open a line of credit with local banks. Dingledine said officials intend to continue operating as they could, falling back on the line of credit only as a safety net.

The hospital's ability to save money over the past fiscal year will help the organization weather this storm, he hopes until operations can become somewhat normalized again.

In the meantime, Mercer Health is cutting back where it needs to. All hiring has been frozen, staff have been told not to report to work as appropriate due to reduced volumes and all non-critical capital purchases have been postponed.

In other business, CEO Lisa Klenke said Mercer Health was one of the first area organizations to sign a contract with the Battelle Institute for its method for reprocessing and sterilizing used N-95 masks.

A partnership with The Ohio State University has also increased access to testing supplies and the speed at which results are received. Before the hospital began working with OSU, they had to wait seven to 10 days to receive COVID-19 test results. Now, they receive them within 24 to 48 hours.

Klenke noted that when the board met last month, Ohio had seen 10 COVID-related deaths. According to information posted to the Ohio Department of Health's website on Wednesday evening, the death toll was up to 584. Mercer County had 14 confirmed cases of COVID-19 as of Wednesday.