IL Hospital's Sudden Closure Leaves Staff Scrambling, Sparks Outrage

Illinois hospital St. Margaret’s Peru closed suddenly and reportedly temporarily over the weekend after giving its employees barely a week’s notice that they would be out of work. The hospital announced the news that it would be closing on January 20, 2023, and the closure took place only 8 days later, on January 28th. 

Image: Hospital Homepage

In a press briefing the hospital held, hospital administrators blamed both the COVID-19 pandemic and the high cost of travel nurses as playing into their decision to temporarily close and re-open as a “Rural Emergency Hospital,” or REH designation. 

"We're all suffering from the same pressure financially about funding temporary nurses," VP of Community Services Linda Burt said at the briefing, as reported by WQAD8. "Every hospital across the country, not just rural Illinois, across the country is struggling with that very same issue. And that's been brought on by COVID."

However, reopening as an REH facility means that the hospital will only provide basic emergency care services and will lose all other in-patient services, including OB/GYN care, leaving the community with no option nearby for maternity care and other services. OB care especially is a loss to the hospital to the tune of $3 million per year, so services are being shuttered. 

"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," Burt told NPR, adding the statistic that each birth “cost” the hospital around $5,000. "You can't do both."

Hospital Closure and Criticism

In a Facebook post, St. Margarete’s blamed several different factors in their decision to close, writing: “In a healthcare climate already plagued by economic concerns that have been growing for years, the COVID-19 pandemic, a cyber-attack (which prevented SMH from being able to bill nor get paid, in a timely manner, for the services we provided), and severe staff shortages have compounded this problem. Like many, we too, have had to contend with the rising costs of goods and services, as well.”

Comments on the Facebook post also alleged that the hospital had not paid their third-party contract with the ER doctors they were using, which is they the contract was terminated. 

Criticisms of how the hospital did not inform their employees of their plan to close and did not address rumors also filled the post, as well as accused the hospital of refusing to include birth control in employee health plans as a Catholic employer—only to now shut down the only birthing hospital in the area. 

Hospital administrators’ move towards REH designation has been criticized by Illinois State Governor, however, who accused officials of not taking the proper steps and closing the hospital unnecessarily. On Facebook, she released an official statement saying she was “disappointed” in how they had chosen to handle the situation without proper notice or communication. The hospital was reportedly supposed to give 90 days’ notice before closing but failed to do so. 

State Representative Lauren Underwood, who is also a Registered Nurse, also released a statement about the closure:

What is a REH Designation and What Does it Do? 

Hospital officials maintain that the closure was necessary to allow them to have time to regroup and reopen under the REH designation, which was created in 2020. According to the Rural Health Information Pub, REH designation can be granted as of January 1st, 2023 by the Centers for Medicare & Medicaid Services (CMS). Tim Muntz CEO said he hoped the hospital could reopen in 30-60 days as an REH facility, although that is pending the application process. 

Congress established the REH designation specifically to help ensure that healthcare services could continue in rural areas where hospitals were at risk of closing or  had already closed. For example, the organization explained that 140 rural hospitals closed between January 2010 and September 30, 2022m with more than 450 other hospitals at risk of closing. Hospitals with 50 or fewer beds that are in rural locations are eligible to apply for REH designation. 

Facilities that receive the REH designation are still able to support “critical outpatient hospital services” even if they can’t have a full hospital. The facility must still provide: 

• 24-hour emergency care

• Observation services

• Lab services

• Diagnostic Radiology

• Pharmacy or drug storage area

• Discharge planning by, or under the supervision of, a registered nurse, social worker, or another qualified professional

• Other outpatient services that they choose

In exchange for REH designation, the facility gets higher Medicare payments for certain outpatient services as well as additional monthly payments. Specifically, that boils down to the Outpatient Prospective Payment System (OPPS) rate plus an additional 5% for outpatient services to Medicare patients and a $272,866 monthly payment. 

The REH designation also means that the new facility can be staffed with a lot fewer employees. The only staffing requirement that must be met is that the ER must be staffed 24/7, but in certain remote areas, a qualified provider doesn’t even have to be on-site but could be as far as 1 hour away under certain criteria. 

Part of a Larger Trend of Hospital Shutdowns? 

As WQAD8 reported, St. Margaret’s hospital shutting down and reopening could represent a trend towards more hospital shutdowns in small towns and more rural areas. And in addition to the shock, fear, and challenges that a sudden shutdown presents to employees at these facilities, it also leads to a lot of questions in the community as well.

Families are left wondering what taking care of their own families’ health will look like—doctors may suddenly leave, medical records can change or no longer be able to be accessed, and services they once received at the hospital may no longer be available. 

Staff and community residents at St. Margaret held a rally in front of the ER on January 28th, the day of the closure in hopes of convincing hospital administrators to keep the hospital open, although their efforts were without success. 

Deb Puetz, a former hospital employee who worked there for 45 hours, told WQAD8 that losing a hospital in a small town shuts down jobs, livelihoods, and an entire community presence.  

"The hospital is the heart of our community,” she said. “And the loss of it is just so saddening, you know. I really hope that it's temporary as they say but it will never be as it was. It will never host in-patients. All my children, I have three children, they were born here. My in-laws passed away here. It's just so sad."

What This Means for Nurses

While the closure of St. Margaret’s and its move towards REH designation certainly doesn’t mean that all rural hospitals will be closing, it is an indicator of some of the overall trends in healthcare. Hospitals operating on a profit system struggle to provide services that aren’t financially valuable and may be forced to choose services that they are reimbursed for through Medicare—which are certainly not reproductive care services. 

News of closures may be a good reminder for nurses in rural areas to keep their skills sharp and gain experience in new areas in the event of closures. It’s also a reminder of the ever-increasing need for specialized and advanced practice RNs (APRNs) that can help in in-demand areas such as rural communities, so if you’re looking to serve and further your education, there may be more opportunities to work as an NP or other APRN.