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Lake Region Healthcare Takes Measures to Maintain Operations in Response to COVID-19

Corporate news | Thursday, May 14, 2020

[Fergus Falls, MN] The Lake Region Healthcare (LRH) enterprise, inclusive of Prairie Ridge Hospital and Health Services (PRHHS) and Mill Street Residence (MSR), announced today several temporary financial measures they've initiated to maintain operations and manage the financial impact of the COVID-19 crisis.

"COVID-19 has caused unprecedented disruption to the healthcare industry and our organization," said Kent Mattson, LRH CEO. "While we continue the mission to serve and care for our communities, with primary focus on the safety of our staff, patients and the people we serve during this pandemic, we need to be mindful of financial realities and our core value of stewardship," he said. "So, we proactively put together a COVID-19 Financial Response Plan, much like we implemented a COVID-19 Patient Care Response Plan."

Like other healthcare systems, a drop in patient volumes and visits due to postponed and foregone services, along the general reluctance of patients to seek medical care during the pandemic, is translating into lesser revenues. "Aside from revenue disruption, our two hospitals, 9 clinics and other care facilities are making investments to purchase equipment and supplies, make space renovations, and take other preparedness measures to locally handle an anticipated surge of COVID-19 patients," Mattson said. "At the same time, we are working with state and federal government officials to advocate that our healthcare workers need to be at the top of the list for funding support in COVID-19 relief." The total amount of relief funding is uncertain and is not likely to have enough impact, he said. "It's up to us to wisely take action now to preserve our future so we are here to serve the needs of our communities as an independent community-governed organization long after COVID-19 is a fading memory," Mattson emphasized.

The Minnesota Hospital Association (MHA) reported the statewide financial impact of COVID-19 for MHA members as a whole is approximately $13.3 million in spending per day to purchase equipment and supplies and to make physical and technological upgrades to handle a surge of COVID-19 patients. MHA also says Minnesota hospitals and health systems are collectively losing $31 million in revenue per day as a result of reductions in patient volumes, something which is expected to remain consistent over at least the next 90 days. "We took the time to evaluate the first weeks of the financial affect, looked at what is happening statewide and nationally in the industry, forecasted scenarios out over what appears to be a sustained event, and developed what we believe is a prudent financial response," Mattson noted.

The temporary financial measures include among other things, a hiring freeze for non-critical positions, a capital spending freeze for non-critical items, and a reduction of executive and management salaries along with a reduction in worked and paid hours for most other employees. "It is a delicate balance to reduce workforce expenses while also ensuring we are here for our communities and do not overly burden our valued workforce. Make no mistake, we will do everything we can to continue providing the access to health care that people need and will return to our regular pay plans as soon as possible," he emphasized. "Our teams have worked very hard to ensure we have a safe space to provide all patient services and we will be staffed to meet patient demand. However, our hours of availability may temporarily be adjusted as we adjust work schedules to accommodate the workforce reductions. In fact, the more demand there is for our healthcare services, the more quickly we will be able to make our workforce whole again," Mattson said. Additional measures are being evaluated on a case by case basis, according to Mattson, and may include furloughs or voluntary leaves of absence and early retirement options. Mattson indicates the measures undertaken locally are consistent with what other organizations are doing across Minnesota and the nation.

About the Lake Region Healthcare Enterprise

The Lake Region Healthcare enterprise is comprised of Lake Region Healthcare, an independent community-governed non-profit headquartered in Fergus Falls, the Mill Street Residence Assisted Living Facility in Fergus Falls, and the non-profit critical access hospital, Prairie Ridge Hospital and Health Services headquartered in Elbow Lake. With over 85 medical staff and over 1,000 employees, we are dedicated to serving the healthcare needs of our communities with values of Excellence, Person-Centered, Collaboration, Stewardship, Integrity, Respect and Innovation. Together we bring specialty and sub-specialty services to patients at hospital locations in Fergus Falls and Elbow Lake and at clinics in Ashby, Barnesville, Battle Lake, Evansville, Herman, Hoffman, and Morris, MN. For more information visit: www.lrhc.org, www.prairiehealth.org or www.millstreet.lrhc.org