WEST BURLINGTON — Southeast Iowa Regional Medical Center in West Burlington has closed its skilled care unit and is limiting inpatient bed capacity in three other units as it seeks to get out from under an operating loss of more than $40 million.

Great River Health, which operates SEIRMC campuses in West Burlington and Fort Madison, as well as Henry County Health Center in Mount Pleasant, notified employees last week of the skilled care unit closure and bed capacity limits in the West Burlington hospital's acute care, cardiovascular health and intensive care units that went into effect Monday.

Matt Wenzel, president and CEO of Great River Health, said those measures were taken to accommodate staff shortages as the hospital scales back on the use of travel staff, which come at a significantly higher cost.

"We just closed our fiscal year and we've lost over $40 million," Wenzel said. "(About) half of that is because of travelers." 

According to Vivian, a health care jobs marketplace, and the U.S. Bureau of Labor and Statistics, travel nurses earn just more than $3,167 a week, while registered nurses earn just less than $39.78 an hour, on average.

Wenzel said operating losses have continued into the new fiscal year, with weekly losses of $2 million over the past three months. He said the problem is not unique to southeast Iowa. 

"These are some of the worst financials I've seen across health care. This isn't just Great River Health," Wenzel said. "The effect that COVID's had on us, and you look at general inflation, and then you look at travelers, it adds up to over half of the $2 million a week is what we're losing. It's just not sustainable."

Health care worker and physician shortages were a concern even before the pandemic due to an aging workforce and limited availability of training, according to a U.S. Department of Health and Human Services report in May. 

When the pandemic hit, hospitals put voluntary services on hold to free up staff and space for anticipated spikes in COVID-19 patients, as well as to limit the risk of spreading the virus. Health care workers throughout the U.S. opted to retire or leave the profession due to safety concerns, while others left the profession due to burnout.

Between March and April 2020, the health care industry lost 1.5 million workers, exacerbating staffing shortages, according to the HHS report.

As health care workers left their local hospitals, health systems increasingly relied on travel staff. With that increased demand came increased pay rates.

"We had agency or traveling companies that started to raise their rates to a point where it broke health care," Wenzel said. "So what you're seeing across the nation is hospitals that can't afford it. The rates are starting to come down and not just the rates, but the use of traveling nurses, because we can't as hospitals afford to pay those rates. And so that's driving the market back down and less people are traveling and so there's just less people, specifically in this case, less nurses that are working."

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Wenzel said the closure of the Skilled Nursing Unit at Klein Center will free staff to work in other units, such as intensive care, cardiovascular health and acute care, as well as the ER and surgery. 

"What we're trying to do is triage care," Wenzel said. "When we're faced with tough decisions, we've got to put more of those staffing resources to (other units)."

The Skilled Nursing Unit is for patients recovering from illness, injury or surgery who may lack the necessary support at home. Wenzel said admissions to that unit at the Klein Center were phased out ahead of the closure. 

"There's nobody that's getting sent home or kicked out," Wenzel said. 

Skilled care is still available at HCHC. 

"We just have to look at ways that we can provide more regionally for southeast Iowans and not by specific towns or cities," Wenzel said. 

Patients being admitted to any of the three units with lowered capacity limits, which will fluctuate based on staff availability, may see longer wait times in the ER or be transferred to other hospitals. 

Surgeries will not be impacted as more than half of them are out-patient.

While capabilities are being monitored at Great River's Fort Madison campus and HCHC, no additional capacity limits will be placed on those facilities at this time. Wenzel said the reason for limits in West Burlington has to do with patient volume.  

"It's just a bigger number in West Burlington than in Fort Madison or Henry County, so we're not seeing the crunch that we are (in West Burlington)," Wenzel said. "Average daily census of Henry County could be five, and you might need a couple nurses. Well, you can't go lower than a couple nurses, and that's the main reason why."

Wenzel said the limitations and the closure of the Skilled Nursing Unit will be in place "indefinitely" due to the fluidity of the situation.

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As of Tuesday, SEIRMC had 228 open positions, 83 of which were for registered nurses. 

Wenzel believes Great River Health's recent partnership with Southeastern Community College will help to fill those openings and ease the region's health care worker shortage, but it will take time. 

In March, the health system and SCC, whose main campus is located across the street from SEIRMC in West Burlington, announced a five-year, $10 million Great River Health Foundation grant to help the college expand its health care faculty and related student support positions, as well as provide tuition assistance to students entering the nursing program. 

"We needed to grow our own pipeline in southeast Iowa by tripling the nursing program," Wenzel said. "Early indications are the partnership with SCC is working, and that's how we're going to get ourselves out of this long-term."

SCC President Michael Ash said he is "very proud" to announce that the college has exceeded its goal of enrolling 83 first-year students into its practical nursing program that began in June, with 101 starting the program either this summer and fall. 

The college also exceeded its 57-student goal for second-year nursing students. That number now stands at 83. 

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Hospitals cannot raise rates for their services to make up for increased operating costs, and instead must look at cost-cutting measures. 

"We can't just go and charge more money," Wenzel said. "We don't get paid more, because our payers are the government and insurance companies that have negotiated rates. ... You can only make it up on expenses, so hospitals right now are faced with just looking at all their expenses."

Before the pandemic, Great River Health had been on its way to tackling a $26 million operating loss caused, in part, by Iowa's privatization of Medicaid. 

Spearheading the health system's cost-saving efforts was Project Synergy, an initiative put in place after the 2018 merger of Great River Medical Center and Fort Madison Community Hospital, with the goal being to reach an operating margin of between 3% and 4%, as opposed to the negative 8% announced in 2019.

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"We absolutely were making this up and were on track to getting into the black," Wenzel said, explaining the health system had gotten its operating loss down to $10 million when the pandemic hit. "We had made up $16 million, and we had a path forward to make up the rest through more Project Synergy work."

COVID-19 forced the health system to cancel elective procedures and temporarily close clinics and reduce services at its West Burlington and Fort Madison hospitals, resulting in a 44% reduction in revenue in April and May 2020 alone. 

Wenzel said he believes the health system would have been in worse financial shape had it not been for Project Synergy efforts, as well as an 11.5-year lease agreement for HCHC that went into effect July 1, 2021, and the designation of its Fort Madison and West Burlington facilities as regional hospitals, thus making them eligible for increased Medicaid reimbursements. 

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"If we didn't do the hard decisions with Project Synergy and welcoming Henry County Health Center into Great River Health, a sole community hospital, that $40 million in excess, we'd be looking at $90," Wenzel said. "We've made up $50 million, and we're still seeing a loss of $40."

The health system is considering additional cost-saving measures. 

"We can't keep losing this amount of money, so we're going to have to keep making hard decisions," Wenzel said. "We will get out of it. I'm extremely hopeful for the future, but there's going to be decisions that have to be made to right the ship."

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Michaele Niehaus covers business, development, environment and agriculture for The Hawk Eye. She can be reached at mniehaus@thehawkeye.com.