2012-04-18 / Front Page

Authority hears concerns from community about hospital

By Anne Marie Kyzer

A meeting held Monday night to discuss the future of Burke County’s hospital began with a vow the facility will not close.

“In no case short of a major financial or natural disaster should anyone fear the close of this hospital,” Burke County Hospital Authority Chairman Gerald Murray told the crowd of more than a 100 who showed up.

The meeting was intended to offer information about the two proposals authority members are considering from companies interested in taking over the hospital when HealthSpan’s contract expires May 31.

Optim Healthcare, based in Savannah, and Partners First Management, based in Statesboro, have submitted proposals that would take the facility in two different directions. Optim would focus on operating the hospital as a specialized orthopedic surgery center, though acute care and obstetrics would still be offered.

Partners First would manage the facility for the authority, continuing current services and adding others deemed profitable.

The way those proposals would affect day-to-day operations at the hospital brought the burning questions at Monday night’s meeting.

County Commission Chairman Wayne Crockett closed the meeting by voicing the commission’s support for the hospital.

“We are committed to this hospital.

We are going to keep the hospital open, and we are going to make it work out,” he said, noting that it’s a complex issue and applauding the authority members for the hours they’ve already invested in the process.

JOBS

Many of those who came to Monday night’s meeting were employees concerned about the impact changes will have on jobs.

Information provided at the meeting showed that under both agreements a new hospital administrator would be put into place. Under Optim’s proposal, some positions in accounting, medical records and human re- sources could be eliminated since many of the business functions are handled at the Savannah office or at other facilities. Dr. Frank Carter pointed out that although more positions might be eliminated under the Optim proposal, those employees could possibly find work in other capacities for the company.

Others voiced concern that longtime employees might be let go in order to cut costs. However, both proposals include plans to retain all medical staff members. One audience member shared that she had spoken to employees in facilities run by both companies and was told they had been faithful to longtime employees in those places.

LOCAL INVOLVEMENT

Some employees and others who spoke out at the meeting applauded the work of local doctors who have run BMC for the past 14 years and said they value their stake in the hospital. Under the proposal from Optim, HealthSpan partners would be offered an opportunity to buy a portion of the company. If they all opt in, they would collectively own 21 percent of the operating company here.

“We have local investment with HealthSpan,” one local resident said. “We don’t need people who aren’t invested in the residents here. We need people who are going to invest in us as citizens.”

A federal law now prohibits doctors from referring Medicare patients to hospitals that the doctors themselves own. However, because HealthSpan was created before the law became effective, their stake in Optim would grandfather it in and keep the law from affecting the hospital here.

Both proposals call for staff physicians in the hospital, called hospitalists, meaning that local doctors would no longer make rounds there. They could still check in on their patients but would not be paid by the hospital to do so.

COSTS

Both companies require substantial investment from the county, with each calling for a $600,000 payment annually. That payment would cover indigent care costs for Optim, and for Partners First, it would cover the cost of the management agreement.

Waynesboro Mayor Pauline Jenkins asked where that money would come from, whether it would mean raising taxes or cutting other services provided by the county.

“It will have to come from tax money,” County Commission Chairman Wayne Crockett said, unsure of their plans but noting the reluctance of the commission to raise taxes especially in this economy. “Commissioners will have to either raise taxes or it will have to come from some other allocation.”

BACKGROUND

HealthSpan LLC, comprised of seven local doctors, began leasing the hospital in 1998 and have operated it since.

Due to a number of factors affecting the healthcare economy, such as declining reimbursements and a number of Medicaid and Medicare regulatory changes, the hospital became unprofitable and led to HealthSpan’s decision not to renew their contract.

The authority solicited proposals from healthcare companies and three companies responded. The only two viable options were Optim and Partners First.

DECISION

The hospital authority, comprised of four unpaid volunteers appointed by county commissioners, is tasked with deciding between the two companies. Members had initially planned to convene again Tuesday night and select one of the proposals, but they postponed the decision.

As of Monday, the authority was evenly split in their support for the two companies. Murray said, however, that he expects them to make a decision very soon and he believes they will be able to come to a unaminous agreement.

“The total idea is to come up with the best thing for the community, the people who work in the hospital and the doctors who have devoted their lives to this community,” authority member Jesse Palmer III said.

If they go with Partners First, the new company would take over as soon as a contract is signed. If they choose Optim, the agreement could be subject to review by the Attorney General’s office since it is a lease. A new lease requires a public comment period and could delay Optim’s contract for several months. In that case, HealthSpan would extend its contract to accommodate that period.

Optim Partners First
Optim will buy majority interest in HealthSpan and
extend its lease with the Hospital Authority for 4 Partners First will bring in a team to manage the
What approach will they take to
operating Burke Medical Center? years under new terms. They would offer ER hospital for the Hospital Authority and continue to
services, outpatient surgery, OB, orthopedic offer ER, expanded surgery center, OB, orthopedic,
surgery and acute care. acute care. They have asked for 10-year contract.
$600,000/year for three years will be paid by the
Hospital Authority to cover indigent care provided
by the hospital. Since, the authority will generate $600,000/year to be paid by the Hospital Authority
no income, the money must come from the county as a management fee to Partners First.
What is the cost to the Hospital budget. The authority would still be responsible Once the hospital becomes profitable, the authority
Authority and County Commission for the building and maintenance, and members could use profits to cover the expense. If the
have said Optim could request that additional authority does not have the funds, the County
operating rooms be built onto the facility in the Commission would have to contribute.
coming years. The county would be responsible
for those costs as well.
Who keeps the profits of the The Hospital Authority will keep the profits, which
Burke Medical Center when it Optim Partners will keep the profits. will be used to maintain the hospital and buy new
becomes profitable? equipment.
How much rent will be paid to the $240,000 per year, but it is subject to fair market None, the Hospital Authority retains the staff and
Hospital Authority? value assessment so it may change control of the Medical Center.
Burke County Hospital Authority. The authority will
Who will the hospital employees
work for? Optim be responsible for payroll, which totals about
$160,000 every two weeks, and other expenses
plus any equipment to expand services.
Which has the support of local Local physicians have actively supported this Physicians have not expressed support for the
physicians? proposal. Partners First proposal.
Who would pay the debt incurred Hospital Authority may have to absorb the debt from
by HealthSpan over the last Optim has agreed to pay all of HealthSpan’s
debts to vendors and to the Hospital Authority. its loans to HealthSpan, but could be paid back with
several months? accounts receivables currently on file.
Will the Authority have funds The authority currently has some funding available
immediately to use for operations Optim will pay over $1 million to the Hospital to support this until the hospital becomes profitbale,
and maintenance? Authority to cover HealthSpan debts. but would also rely on income from the hospital,
some support from county and possibly loans.
University has indicated a desire to work with
Partners First by assisting with electronic medical
Will group have support from Augusta hospitals have not indicated they would records, discounted purchasing and helping recruit
new physicians. A current arrangement allows for
Augusta hospitals? support Optim. patients to transfer to University if the facility has a
bed available and allows a cardiologist to see
patients here.

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