St. Margaret’s officials: Peru hospital will be reopened

Officials say plan remains for closure to be temporary

A view of the West street entrance at St. Margaret’s Hospital on Monday, Jan. 23, 2023 in Peru.

The former Illinois Valley Community Hospital still will be closed on Saturday – St. Margaret’s officials haven’t retreated from that – but the hospital in Peru will, they say, eventually be reopened.

Actually, it will have to be – at least if St. Margaret’s hopes to make it a Rural Emergency Hospital.

St. Margaret’s officials conducted a Tuesday news conference that failed to address some still-lingering questions, such as how many employees will be affected. St. Margaret’s didn’t disclose that total on Friday when officials announced the Peru hospital would be closed this coming Saturday. They still haven’t pinpointed it.

Tim Muntz, President and CEO of St. Margaret's Health speaks during a Zoom press conference on Tuesday, Jan. 24, 2023 at St. Margaret's Hospital in Spring Valley.

“I think the distinction needs to be how many employees are there and how many will be affected,” said Tim Muntz, president and CEO, pointing out an as-yet-unknown number of Peru employees will transition to other roles. “We’re going to need more staff over here in Spring Valley ... and there are some people who are going to be affected via a temporary layoff.

“But there’s still a group that we’re going to have to advise what their options are.”

St. Margaret’s officials did, however, disclose some of the financial totals they say forced their hand.

  • The use of staffing agencies to fill 50 to 60 jobs – there was enormous turnover during the pandemic – costs St. Margaret’s $10 million a year
  • Running an obstetrics unit results in a financial loss of about $3 million a year, with a loss of $5,000 for every baby delivered. (St. Margaret’s delivers two to three babies per day and has 55 women due in January alone)
  • St. Margaret’s Health is 66% government funded between Medicare and Medicaid, which is unsustainable even with the COVID-19 relief aid that was allotted the hospital
  • The February 2021 cyberattack crippled their billing and collections at a time when finances already were under siege
  • The flashpoint for the coming closure was the termination of the contract with the company that provides emergency room staffing. Muntz previously acknowledged St. Margaret’s was in arrears but denied the total exceeded $1 million.

And with its reserves depleted, St. Margaret’s cannot continue operations at Peru, though St. Margaret’s officials insist the Peru closure is a temporary suspension and the hospital must be reopened even before the sought-after REH designation is obtained. Muntz estimated best-case scenario the hospital could reopen in two to three months, but REH rules still need to be fleshed out by the Illinois Department of Public Health.

St. Margaret’s acknowledged its financial problems were years in the making but insisted officials tried to sustain operations until they ran out of options.

Terry Judd President and CEO of St. Margaret's Health speaks during a Zoom press conference on Tuesday, Jan. 24, 2023 at St. Margaret's Hospital in Spring Valley.

“We knew there was going to come a day when we absolutely had to do something,” board member Terry Judd said. “It’s not something we like but the financial realities have come home to roost and we pulled the trigger.”

And when asked whether St. Margaret’s had considered engaging a larger healthcare network to absorb their Peru operations, Judd said it wasn’t off the table.

“We’re examining everything, including that,” Judd said. “Trust me.”