Hospital Deserves City, County Support

by Reed Anfinson
Publisher, Swift County Monitor-News
 
Swift County-Benson Hospital has experienced substantial losses on its operations in the past two years and faces another big loss in 2016. To turn those financial losses into profits, SCBH’s governing board and CEO Kurt Waldbillig have been working on a three-fold plan that is now being implemented. It projects that by 2019 net revenues could reach nearly $1 million.
Key to that turn around is the hospital taking over medical clinic operations in Benson, the construction of a $12.5 million assisted living/memory care facility, and creating a more lean, efficient, and flexible operation through a hospital facility renovation. As of Sept. 1, the hospital is taking over the clinic from Affiliated Community Medical Centers (ACMC.) The next phase, the assisted living/memory care facility is waiting for backing from the Benson City Council and Swift County Board of Commissioners. Step three has been tabled as the hospital pushes to get the assisted living/memory care facility built.
At a joint meeting of the SCBH governing board, the city council and county board, Monday night the hospital met with split support from the council and opposition and indecision from the county board that has left the project in limbo.
There are three basic arguments against county, city, or both backing financing for the Swift County-Benson Hospital’s effort to get an assisted living/memory care facility under construction yet this fall. They say the United States Department of Agriculture (USDA) can do the financing at no risk to taxpayers; there are other projects that demand public funding that are pressing and just as worthy of taxpayer funding; and $3 corn.
These are all good points to raise and required thoughtful discussion to protect property taxpayers, county and city finances, to protect local government bond ratings to ensure low interest rates on future projects. Now that those discussions have taken place, we feel it is time for Benson and Swift County to stand with the hospital in moving the project forward as quickly as possible. Let’s look at three objections to moving forward now.
USDA backing
The USDA has community development programs that offer financial backing for rural hospital projects. It will back 90 percent of the financing allowing a private financial company to take the other 10 percent risk. The local taxpayer is completely off the hook should the project fail.
It is an attractive option, but there are problems with waiting for USDA backing. It will delay moving forward with the project up to nine months and depress SCBH’s financial position even more with serious, costly consequences. Here are more downsides to delaying:
- It takes away the hospital’s control over how the facility is designed. The governing board is designing a facility that is “nice” with some amenities and qualities that aren’t by any means extravagant, but add features people have asked for. USDA may cut these out.
- It will be harder to recruit new physicians and nurse practioners to the community at a time when SCBH is actively working to bring them here.
- It will make it harder to retain SCBH’s current staff. They are looking for a sign the community supports the hospital and looking to see their below-market wages raised.
- Delaying financing and pushing construction out nine months will cost $400,000 to $600,000 in lost earnings.
- It may open the door for a competitor to come into Benson. While some dismiss this possibility, Appleton sees opportunity here and is opening a clinic. Towns all around us are advertising their medical services in the Monitor-News because they see a weak, vulnerable healthcare system.
- Going with USDA financing could add $800,000 in interest costs to the project over what the lower interest rate available through city and county general obligation bonding backing would get.
 - It delays the recruiting effort to fill the 40 jobs that will be created with the new facility.
- Waiting will raise the costs of construction. Instead of a $12.5 million project, it might be a $13 million or $13.5 million project.
- And, importantly, it means that all the families desperately needing a place now for a loved will have to wait or find facilities elsewhere.
Other county and city expenses
Swift County is looking at major projects involving funding for upgrades to its heating and cooling system at the courthouse, court security renovations and handicapped accessibility problems, Countryside Public Health renovations, Law Enforcement Center upgrades, highway department building and maintenance projects, and road building needs.
The City of Benson faces upgrades to its aged office space and needs new quarters for its police department. The three-level building is not handicapped accessible.
Both are also aware of the bonding needs of District 777 schools.
However, what is being discarded in this concern is that unlike all the other capital needs faced by the county, city and school district, the hospital isn’t asking for taxpayer money – not upfront. It is simply asking for the city and county to stand behind it with a guarantee that should things go terribly wrong, that taxpayers will step in.
Also, unlike all those other projects, this is the only one that generates revenue to pay for itself.
$3 corn
“If you go talk to a guy trying to make it on $3 corn he really, right now today, doesn’t care if there is a hospital in Benson,” Commissioner Eric Rudningen said at the county board’s July 19 meeting. He repeated it again Monday night.  “If he needs an emergency service, he might care that day, but right now it is about ‘How am I going to stay on this farm with $3 corn?’”
With low commodity prices, and farmers paying the bulk of tax levies, now is not the time to raise taxes by putting additional levies on them, Rudningen and others have said. Even a marginal risk of an additional levy is unacceptable to them.
All of us who are tied closely to the farm economy are hurting. We understand the concerns, but again, the hospital is not asking the city and county to raise taxes. They are just asking for a guarantee.
Further, we reject Rudningen’s claim that farmers don’t care about the future of Swift County-Benson Hospital. As Dr. Rick Horecka pointed out at Monday night’s meeting, when the community raised $1 million for hospital remodeling in the 1990s, the farm economy was down and there were worries about the fund drive’s success. But many farmers stepped up and donated to the project.
Justified, minimal risk for desperate needs
With the gift of Scofield Place, SCBH received a fully paid for and fully occupied independent and assisted living facility. The new proposed facility would add 15 memory care beds, 34 enhanced assisted living beds, and 22 independent living beds. That is a total of 106 beds.
For SCBH to simply make the debt payments on the new facility, it would only have to have 65 percent occupancy, or 69 beds. With 22 on the waiting list and the 34 at Scofield Place there are already 56 beds taken.
Our elected leaders have been told by the Director of Swift County Home Health Sue Zaic that those 22 people will have to seek facilities in other towns, isolating them from their families and friends, and forcing them to drive long distances if the facility is not built now.
Dr. Horecka has told them that he is constantly seeing patients who need an assisted living care facility, or memory care bed, who he has to send out of town.
Horecka, Zaic and the governing board all say that there are many more people in facilities outside Benson that would come home if Benson had its own memory care/assisted living facility.
Three studies have been conducted on the need for assisted living in Benson - one in 2002, one in 2014, and another in 2016. All three have shown a high need for the facility.
Based on all the data it has collected, and all the requests it has received, SCBH confidently estimates that it will have 95 percent occupancy in its new facility – not only ensuring it can pay off the debt, but ensuring the hospital earns the revenues to turn around its current financial plight.
In a detailed financial analysis of what implementing its new clinic operation, building and operating an assisted living/memory care facility, and renovating the hospital would mean, SCBH estimates it could be making a net profit of $993,000 by 2019 and $1.2 million annually in the years after.
We recognize there are risks, but they are minimal. Further, some risks, such as ensuring we return our hospital to financial health as quickly as possible, ensuring its future, and providing our residents who need assisted living or memory care facilities close to home are worth taking.
Benson and Swift County have an extraordinarily qualified governing board that it appointed and trusted to act responsibly. Now, after it has spent more than a year studying in detailed depth a turn-around plan, after it has hired a new administrator whose mission was turn around the hospital’s operations and finances, after it was to charged with rebuilding the trust and confidence in the medical services provided in the Benson area, the governing board has its legs cut out from under it.
Swift County and Benson need to support SCBH by backing construction of an assisted living/memory care facility now. Citizens should let their elected officials know that.