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Sunday, May 1, 2016

Hospital Board looks at proposals from two area hospital systems

Thursday, August 25, 2011

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On Friday, Aug. 19, Salem Attorney Jim Short told a special meeting of the Fulton County Hospital Board of Governors that he has begun informal discussions with two area hospitals who have expressed interest in leasing the Salem hospital.

"I've met with one, kind of informally, and am going to meet with the other next week," Short told the board. "Right now, I'm just kind of thanking them for being interested and finding out what kind of information they need from us to make a decision."

On Aug. 11, the board hired Short to work with the Ozark Medical Center and Baxter Regional Hospital, as they gather financial records, look at operations and evaluate whether they will make a proposal to operate the local hospital.

The board needs Short's assistance, since it terminated hospital administrator Joe Hammond, on Aug. 9.

The hospital board is looking for what it calls "a partnership" from a larger hospital, because of the hospital's large debt and tight cash flow.

Short said he expected offers in 60 to 90 days, but he acknowledged that the potential partners have to proceed cautiously because leasing the hospital could be an expensive undertaking.

"If they assume our Medicare (financial) number, then they assume all of our liabilities with the government," Short explained. "If there's been an overpayment (Medicare reimbursed the hospital too much), then they assume all our liabilities with the government. If there's been an overpayment, it will come out of their pocket."

While two sales tax collections help pay the USDA loan which financed a hospital addition and improvements, Short also said the partner would have to "make up the difference" in instances where sales tax revenue does not cover the entire USDA payment.

Board member Danny Perryman encouraged Short to talk to other medical facilities that may be interested in a partnership.

"I'd like to have the opportunity for the board to hear every option," said Perryman.

Short said he was willing to talk to other parties willing to sign confidentiality agreements, although OMC and Baxter Regional have first rights to pursue a lease.

Board President Jerry Estes said two other companies who "come in and take distressed hospitals and run them" have also made contacts.

Board member, Dr. Jim Bozeman, told Short the board has one priority.

"The main thing, I think I'm speaking for all of us, is, we want to make sure we have a hospital available in Fulton County."

Without an administrator, the board is having to get more involved in day to day operations, and is learning more about just how tight finances are.

When discussing the need for a second person to sign hospital checks, it was suggested one or two board members should get involved, to keep better track of what is being paid.

But board members backed away from that idea when they learned checks are written everyday, often to deal with emergency situations.

"We have companies who call us and say they want, they need payment," said Denise Innis of the Finance Department. "We pay, as soon as we find out they are not going to send supplies, we figure out a way to get them paid."

The board has also identified the hospital's employee health care plan, as an area where costs need to be controlled.

It was surprised to learn that the hospital pays claims out of its own pocket and employees pay nothing for health care, unless they want coverage for their family.

"Are you saying we are self insured?" asked Perryman.

"And employees don't pay anything at all?" board member Bill Pace added.

It was explained that the hospital has a self insurance plan, in which it pays the first $40,000 of an employee's claim. While an "over-insurance company" picks up costs above $40,000, the hospital still pays a percentage of the total.

"Self insurance is a roll of the dice," said Estes. "You can save money or you can lose money (depending on the amount of claims). I'll be honest, this self insurance scares me to death."

Other board members agreed, and voted to authorize Estes to seek quotes from companies for a traditional heath care plan through an insurance company, which will manage the plan and pay benefits.

After going into executive session to discuss personnel matters, the board returned and passed a motion to terminate an employment agreement with Dr. David Kauffman. Kauffman, whose license to practice was suspended by the state medical board in June of 2009.

While he cannot see patients, Kauffman had been working at the hospital reviewing charts, to speed up the process of getting bills issued after a doctor sees a patient.

In early August, Kauffman went before the medical board seeking to have his license reinstated.

The board, which suspended Kauffman's license for drug and alcohol problems, declined to reinstate the local doctor.

According to Kauffman's attorney, Larry Kissee, the board indicated Kauffman could return to the board as early as October to again apply for reinstatement, if he remains drug and alcohol free.



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