[Nameplate] Fair ~ 71°F  
High: 88°F ~ Low: 66°F
Wednesday, July 9, 2014

Old attitudes could hurt efforts to save the Fulton County Hospital

Thursday, December 22, 2011

The weeks before Christmas and New Years are usually slow news-wise, as people concentrate on Christmas parties and shopping and take vacation days. So, I had intended to write a column about the joys of the season.

But the Fulton County Hospital Board of Governors was on the job last week, and there was new drama in the continuing struggle to stabilize the hospital.

You would think, with $1.7 million in income expected from the sale of its home health license, and the Ozarks Medical Center's willingness to take over day-to-day management, this would be a time of celebration by board members. But nothing ever seems to come easy where the hospital is concerned.

With OMC wrapping up 60-days of managing the hospital free of charge, it was time for the board to approve a proposed three-year management contract. When the board met on Thursday, Dec. 15, there was no sign of problems, as the two hospitals negotiated the agreement.

The process of seeking a larger hospital or private management firm to run the hospital began on Aug. 9, when the board terminated administrator Joe Hammond, deciding he was not doing enough to address growing debt.

Noting years of struggles, former Board Chairman Jerry Estes suggested seeking a partner to manage the hospital. Also remembering the board had not gone through with past attempts to find a partner, Estes said he would not contact OMC, Baxter Regional Medical Center or others for proposals unless the board was serious this time.

On Aug. 9, the board supported the idea of getting management help, but there were ominous signs the undertaking could be contentious.

Board member Danny Perryman said, "I hope we're talking partnerships and not takeover here."

Board member Jerry Blevins said, "I, for one, will not turn this hospital over totally to another facility and have them run it without us having some say over it."

After seeking proposals from OMC and Baxter Regional, and talking to two private hospital management companies, Baxter Regional was the only one to make an in-depth proposal.

Its idea to advance the hospital $300,000 to help with cash flow problems, charge a fee to manage the hospital for two years, then begin a long term lease in which it would make payments to the county was shot down with no discussion. A majority of board members didn't like the idea that their decision-making would end when the lease agreement began, and they objected to Baxter's request to be compensated for some of its investment, if the agreement was terminated.

OMC, which declined to make a management offer in September, agreed to reconsider after Baxter Regional was rejected.

OMC's offer was accepted and, in October, OMC executive Kim Thompson arrived to begin a 60-day stint as interim administrator. During the past two months, many OMC department heads have come to Fulton County to review local operations and OMC hired a consultant to look for cost cutting-revenue increasing ideas.

While Fulton County leaders and citizens are generally suspicious of "outsiders," the arrangement appeared to be off to a good start.

But old fears were resurrected as the board considered the long term management agreement.

Concerns began with the fact OMC's proposal didn't give the board any say over who it hired as administrator. OMC reserved the right to terminate its management agreement if funds from the home health license sale were not in hand within three months. OMC wanted $150,000 from the license sale set aside to cover its monthly fee, and wanted the full $150,000, or its balance, if the board decided to terminate the agreement. Finally, the board was agitated by an OMC proposal not to have a physician present in the emergency room during late night and early morning hours when there are few patients.

Board members John Ed Welch and Dr. Jim Bozemen both called for more board "input" as to who was hired as administrator. Welch said, the way the management agreement was written, OMC could re-hire Joe Hammond if it wanted to, while the board wants to make sure the new hire is someone it can work well with.

Blevins said he would not support paying a dime to OMC if the board terminated its contract because it "didn't do a good job." Chairman Bill Pace said the $150,000 or less OMC would get at termination would be a drop in the bucket compared to its total investment.

Board member Darrell Zimmer said the board needed approval power if OMC decided to make major changes, like cutting ER operations to only 12 hours a day.

Blevins said OMC's idea of not having doctors at the hospital 24-hours a day "will never work."

Board member Sue Hertzog finally pointed out the obvious: hiring someone with vast experience to manage the hospital, then trying to micro-manage them is what will never work.

"It seems to me like, if we are going to let OMC do the managing, why are we tearing our hair out? Let them tear their hair out (over management decisions)," Hertzog said. In the end, the board passed the management agreement, after adding one condition - it wants the right to approve the administrator OMC decides to hire.

OMC had indicated, before the meeting, it felt the proposed contract had gone back and forth enough times, and it was time for the board to approve it. We'll have to wait and see whether OMC will give in to board approval of an administrator.

But, after sitting through hours of presentations from hospitals and management companies, and the hospital's own financial advisors, I have to agree with Hertzog. Under its agreement with OMC, the board will still set policy and procedures, but OMC will have the right to run the shop - hire and fire, set staffing limits, impose spending controls and make other major decisions.

While it manages the hospital, OMC will be using some of its resources, and including our hospital in OMC's human resources and purchasing programs. The larger hospital's expertise and purchasing power should cut FCH employee health care costs, reduce costs for medical and office supplies, and, through renegotiating contracts, increase the amount of reimbursement from private insurance companies.

Some OMC decisions, like staff cuts, are sure to hurt, but Kim Thompson put the hospital's position in stark terms - it needs "every percent we can find (in savings) right now because we are cash strapped, and $1.7 million is not going to do it...a lot of that is already committed."

Stepping back is not easy, even for a board that admits it has not always been successful opening a clinic, or hiring doctors and administrators. Danny Perryman, who has been perhaps the fiercest proponent of keeping local control of the hospital, appears reluctantly willing to trust a partner to seek solutions to huge debt problems.

"If these folks (OMC) do what they have undertaken to do, then we'll still have our hospital and be alright," Perryman told his fellow board members. "If they don't, if they can't manage it, then we're out. But if we do nothing, then we're out (much quicker)."

In other words, the best approach is to work with OMC, not against it, to see if its approaches can be more successful. To stay on the same course is folly, because the hospital is out of money and running out of time to turn things around.

Richard Irby, Editor
Richard Irby, Editor