All eyes on St. Luke’s deal

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Local News

October 22, 2019 - 10:16 AM

More than a year of planning could come to a head tonight, when trustees with Allen County Regional Hospital are expected to sign a formal contract to lease the facility to Saint Luke?s Health System. 

Attorneys have been working on an agreement, and it?s likely the board will be presented with a final deal at tonight?s meeting, Loren Korte, president of the board of trustees, said. However, the process has taken longer than Korte expected; the board signed a ?memorandum of understanding? in June and attorneys have been hashing out details since then. 

Allen County Commissioners were expected this morning to sign their part of the agreement, regarding the bonds used to build a new facility in 2013. That action appeared imminent but was not done before The Register went to press.

The hospital board will meet at 6:30 tonight at the ACRH conference room. 

If approved, the deal will cap nearly two years of discussion on the future of healthcare in Allen County.

 

Loren Korte took the reins as chairman of the Allen County Regional Hospital Board of Trustees in January, as the board was in the midst of deciding the hospital?s future management. FILE PHOTO

 

THE BOARD initially rejected the idea of leasing ACRH to Saint Luke?s. 

In early 2018, the board decided to review its management agreement with Hospital Corporation of America and whether to continue or amend the arrangement, or to pursue something else entirely.

HCA had leased the hospital for decades before switching to a management agreement in 2013, when a new hospital opened under the county?s control. HCA provided three top administrative positions, along with a variety of support services and systems. 

The board had no interest in returning to a lease, pointing to concerns they?d had previously, including a lack of local control, an unwillingness by HCA to invest in the facility and poor staff morale. 

But as board members watched hospitals throughout the region struggle, including the closing of Mercy hospitals in Independence in 2015 and then Fort Scott earlier this year, they sought a solution that would sustain the hospital for decades to come.

?Frankly, I had some concerns with leasing early on,? Korte said in June. ?Short term, we would be OK. We?re paying the bills. But in business, the time to make a change is when things are going well.?

The proposal to lease first was pitched by board member Terry Sparks, who had visited a Missouri hospital that is leased to Saint Luke?s. Hospitals in Chillicothe and Trenton, Mo., and in nearby Garnett all are leased to Saint Luke?s and are similar in size and structure to ACRH, with Saint Luke?s providing money to offset taxpayer debt for new hospital buildings.

Sparks wondered if Saint Luke?s would be interested in a similar agreement in Iola, perhaps taking over the county?s debt on the 2013 hospital building, now around $26 million.

The board heard presentations from four companies: Saint Luke?s, a Kansas City-based non-profit healthcare system; HCA, the nation?s largest healthcare company with headquarters in Nashville; Great Plains Health Alliance based in Wichita; and Quorum Health Resources of Brentwood, Tenn., which also manages Neosho County Memorial Regional Hospital in Chanute and others in Southeast Kansas.

The board quickly narrowed the list to HCA and Saint Luke?s. 

As 2018 ended, the board lost its last two members who had been there through the transition to a county-operated model and new facility. The terms of Sean McReynolds and Board President Patti Boyd expired; Mona Hull and former Allen County commissioner John Brocker came aboard. Longtime county counselor Alan Weber, who advises the board, retired, and Bob Johnson took over the post.

 

THE PROS of joining Saint Luke?s became more and more apparent as the new board, with Korte at the helm, discussed the matter over the next few months. 

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