Progress, Challenges, and Moving Forward Together

As CEO of Morton County Health System, I believe our community deserves clear and accurate information about the hospital it owns. This is the first in a series of quarterly State of the Hospital updates intended to provide that information directly to you.

Why Our Hospital Matters

Having a hospital here in Morton County means our residents can receive care close to home when they need it most. It means having an emergency department available when minutes matter, inpatient and skilled care in our community, access to clinic and outpatient services, and healthcare jobs that support our local economy.

For a rural community, the hospital is an important part of the infrastructure that allows people to live, work, raise families, and grow older here. Keeping quality healthcare available locally is not simply about sustaining an organization. It is about sustaining our community.

We Are Making Progress

Rural healthcare faces significant challenges, and MCHS is no exception. But there is also important progress happening here.

Through August, MCHS reported $757,297 in year-to-date net income, compared with an $848,277 loss at the same point last year, an improvement of more than $1.6 million. Net revenue is up 16.8%, while operating expenses are down 15.5% compared with last year. Patient-care cash collections through September reached $7.08 million, 17.5% ahead of budget and 15.3% ahead of last year.

Our workforce is also becoming more stable. Employee retention reached 86.7% in September, the highest level in the 23 months we have tracked it. Emergency visits and acute patient days are up compared with last year, and skilled swing-bed days have increased significantly.

We Still Have Work to Do

Transparency also means being honest about our challenges. Outpatient and clinic volumes are below last year, and strengthening our clinic remains a priority. Much of the clinic decline comes from patients of providers who have left the practice. Both of our current providers are growing their own patient panels.

We are tracking twenty-two quality improvement projects and are participating in the State of Kansas’ Rural Health Transformation Plan Evidence Based Practice Program to track and monitor specific quality measures.

County Support and the Community Pharmacy

We asked the county for $500,000 in no-fund warrant support, and the commissioners approved $400,000. We are grateful for that support. I also want to be clear about what it was for, because we have heard that it paid for the community pharmacy. It did not.

Two things put pressure on hospital cash this year. The first was a COVID-era obligation. MCHS applied for the federal Employee Retention Credit and borrowed against the expected refund from a private lender, Raistone. The IRS has not paid that credit, and our appeal is still open. When the refund did not arrive, about $1.2 million came due to Raistone. We negotiated it down to $400,000, which saved the hospital roughly $800,000, but it was still a large one-time payment. The county's $400,000 matches that payment dollar for dollar.

The second was the interruption of our 340B revenue. 340B is a federal program that lets hospitals like ours buy outpatient medications at a discount, and the savings support patient care. Our 340B partner was the community pharmacy, and that revenue has been interrupted since August 2025, a year before we purchased the pharmacy. Through August of last year, 340B brought in $568,571. Through August of this year, it brought in $60,667.

The pharmacy purchase was a separate decision. We paid for it in July from hospital operating cash, and MCHS took ownership on August 1, before we asked the county for anything. The full cost, including paying off the pharmacy's existing obligations, was less than either the Raistone payment or the 340B revenue we have lost this year.

When MCHS assumed ownership of the community pharmacy, we also assumed responsibility for an operation that required significant attention. There were a number of operational, policy, compliance, technology, and workflow items that needed to be corrected or strengthened following the transition. Our team has been working through those issues to establish the systems and processes needed for the pharmacy to operate safely, efficiently, and sustainably as part of MCHS. Because the pharmacy's sales are still being brought into our accounting system, its early results in the monthly board financials understate its revenue.

The pharmacy is an important healthcare service for our community. In a rural area, losing local access to medications would create another barrier to care. Our goal is to build a strong, well-run local pharmacy that complements the care provided by our hospital and clinic and remains available to our community for the long term.

Looking Forward

Our work is far from finished. We will continue strengthening our clinic, improving our financial position, retaining and recruiting great people, and finding responsible ways to expand access to healthcare locally.

My commitment to Morton County is simple: we will be honest about both our successes and our challenges. Transparency also means making ourselves available to the community we serve. Our Board of Trustees meetings are open to the public at 12:00 pm on the 4^th Tuesday of every month at the hospital, and I welcome anyone who wants to attend, ask questions, or learn more about MCHS. I am also personally available to meet with any community member who would like to have a conversation about their hospital.

MCHS has an important role in the future of this community. I am proud of the progress our team is making, proud of the people who show up every day to care for our community, and optimistic about what we can accomplish together.

Dr. Meghan Smith, DHA
Chief Executive Officer
Morton County Health System