Meeker County hospital reports strong start to 2025, says new facility planning depends on Lockerbie vacation

Mary Ellen, a hospital representative, told the Meeker County Board of Commissioners on May 20 that the county hospital opened 2025 with “a very, very good” financial start and that planning is under way for a new facility if site and city approvals align.

Tyler, the hospital finance representative, said the facility’s operating margin through February stood at 13.9 percent and that days cash on hand is growing while days in accounts receivable remain low. “Revenue is coming from. Expenses, we’re under budget on expenses so far this year,” Tyler said, describing the early-year trends.

The hospital has started a pharmacy relocation project and passed a recent inspection, Mary Ellen said. Hospital representatives are also finalizing cost estimates for a new ambulatory facility. They said two steps are linked: the county or hospital must secure agreement to vacate the Lockerbie property and obtain city planning and zoning approvals before a firm project budget and formal bidding can proceed.

“The traffic study has come back and the parking study has come back with very positive results,” Mary Ellen said, adding the hospital plans to put construction costs out to bid this summer and, if everything lines up, move forward in the fall with a construction timeline of about 20 months.

Hospital staff noted the hospital’s status as a critical access hospital and described a pending annual Medicare cost report process with the Centers for Medicare & Medicaid Services that they said should be favorable and could result in a settlement for 2024 and modest rate increases in 2025.

Commissioners asked about benchmarks for operating margin. Tyler said the hospital budgeted a 2 percent margin for the year but that a healthy target for a facility of this size to support capital reinvestment would typically be 3 to 4 percent. He cautioned that margins often normalize over a year as planned replacements and other expenses occur.

The update included recognition of long-serving clinicians and news that a physician had performed a high volume of surgeries; hospital leaders noted a recent local award presented to Dr. Deb Peterson by CentraCare.

If the Lockerbie vacating and city planning approvals are obtained, hospital leaders said they expect to have a firm cost estimate by late summer and, if bidders and financing align, could proceed with construction bids this fall.

The board did not take any binding action on the facility during the meeting; members instead heard the update and asked for more detail in future reports. The hospital representatives said they will return with additional financial and project information as planning continues.