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BRMC backs out of agreement

Wednesday, December 19, 2007

Forty-seven days after signing a letter of intent with Fulton County Hospital, Baxter Regional Hospital in Mountain Home has withdrawn their offer to proceed with the possibility of a lease agreement.

In a press release received Monday afternoon, Dec. 17, BRMC said:

"Baxter Regional Medical Center announced today that the proposed partnership with Fulton County Hospital has been postponed. After two months of due diligence and negotiations BRMC has decided to withdraw its offer to lease the hospital.

"Ron Patterson, CEO said, 'After meeting with several of the admitting physicians at Fulton County Hospital we realized it was their commitment that the hospital remain independent as long as it was financially feasible, and we honor that request. It has always been our goal for the residents of Fulton County to have quality health care now and in the future and we continue to support that goal.

" 'We especially want to thank Judge Charles Willett for his assistance throughout this process. He was always focused on providing a long-range plan of health care for his county. Also, a special thank you to Barry Aldridge, hospital board chairman, the hospital administration and staff for their cooperation in our due diligence process.

" 'If at any time the county officials, hospital board and physicians in concert, seek our partnership we will reconsider our decision.' "

The letter of intent signed on Oct. 25, gave BRMC 90 days to prepare a lease proposal for FCH. During this time, and for 30 days following, the letter of intent gave BRMC the exclusive right to pursue such an agreement.

According to the letter of intent the due diligence process was to be completed by Jan. 31, 2008, and both boards would vote either in favor or against the proposed transaction no later than Feb. 28, 2008.

At the Nov. 26 meeting of the FCH board, board chairman Barry Aldridge presented members of the board copies of BRMC's first proposal of terms. The proposal listed 14 conditions BRMC wanted included in a lease. Aldridge told the board that many of these first proposals would not be good for FCH and that BRMC had agreed to review the items in question and resubmit another working list for the board to review.

The Fulton County Hospital Board released the following statement Dec. 18:

"The board is in receipt of the press release stating BRMC is not currently interested. It was discussed openly at the board meeting Monday, Dec. 17 and the board is in agreement that we move forward as a hospital. The employees and board are committed to continuing the quality of care Fulton County residents deserve and keeping the hospital operational."

According to an article in the Dec. 10 issue of the Baxter Bulletin, BRMC is facing its own decreasing revenue and budget cuts. BRMC Administrator Ron Peterson has asked hospital staff at all levels to look for ways to cut costs due to an unexpected decline in the volume of hospital services delivered in 2007, the article said. Peterson told the Baxter Bulletin that several variables play into BRMC's budget problems, including slow and declining reimbursement rates from Medicaid and Medicare. The article quotes Peterson as saying that those two revenue sources account for 75 percent of the hospital's overall revenue. Self-pay patients add another 10 percent and reimbursements from private insurance adds another 15 percent, according to the article.



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