Blessing CFO says new hospital in community will cut revenue, but Quincy Medical disagrees

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The CFO of Blessing Health System in Quincy, Ill., said the opening of a new 25-bed hospital in the community will lead to revenue losses, according to a May 4 report in the Herald-Whig. Quincy Medical Group, which is proposing the hospital, disagrees, and said the project will improve care coordination and clinical outcomes in the area.

In a letter to the Illinois Health Facilities and Services Review Board, Patrick Gerveler, CFO of Blessing Health, said Quincy Medical Group's proposed hospital would strip his facility of its Sole Community status. The status is designated by CMS for hospitals that are geographically isolated. Losing the status would result in a yearly revenue loss of $6.9 million because of lower Medicare rates, Mr. Gerveler wrote in the letter. 

In addition to Mr. Gerveler's letter, representatives from Blessing and a management consulting firm working for the health system argued Quincy Medical Group's application for the new hospital doesn't include pricing or data transparency, according to the Herald-Whig.

However, supporters of the new $61 million hospital said it would increase competition and economic development in the area, according to the report. In an op-ed authored by Todd Petty, MD, chairman of the Quincy Medical Group board of directors, Dr. Petty wrote: "Since announcing plans for QMG Hospital — a state-of-the-art, 25 med-surg bed hospital designed to improve outcomes while reducing costs — we have received overwhelming support from patients, community leaders and employers. We planned the new facility in response to input from area residents regarding hospital-based care, and we are humbled by the hundreds of patients who have told the certificate of need board they want and need this hospital."

A study conducted by Guidehouse for Blessing found the health system's commercial rates were 157 percent of the median market for inpatient services and 150 percent of the median market for outpatient services, according to an April 22 report from the Herald-Whig.

The board has yet to approve the proposed hospital.

Read more here.

Editor's note: This article was updated to include more information.

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