Hospital board eyes pact with Saint Luke’s


Local News

March 27, 2019 - 11:23 AM

Allen County Regional Hospital will pursue a possible lease with Saint Luke’s Health System.

The board of trustees Tuesday signed a letter of intent to allow Saint Luke’s to review its facilities and operations, and to make an offer for a lease. No deal has been made, but it’s the clearest indication yet that trustees want to make a management change.

A management contract with Hospital Corporation of America (HCA) remains in place; HCA’s contract expires in June 2020, which prompted trustees last year to review the contract and consider alternatives. Saint Luke’s was one of four companies, including HCA, that gave proposals.

Initially, trustees said they weren’t interested in pursuing a lease but that started to change as they learned more about Saint Luke’s, a Kansas City-based, non-profit healthcare system.

Reaction from the public and hospital employees eventually convinced trustees to pursue a lease with Saint Luke’s, chairman Loren Korte said. The trustees voted unanimously Tuesday to sign the letter of intent. 

“A whole lot of folks contacted me, saying hey, we like the Saint Luke’s idea,” Korte said. “It’s real preliminary, but the intent is to see what they have to offer.”

Saint Luke’s officials will have authority to study ACRH’s facilities, finances and operations in order to submit a possible lease proposal. The process is expected to last 60 to 75 days, Korte said.

The action also gives ACRH leadership a chance to better gauge the type of services and financial investment Saint Luke’s can provide. While Korte said he could not reveal specifics of previous discussions, trustees have met with Saint Luke’s officials multiple times, in public and in private.

In a public meeting in October, representatives from Saint Luke’s touted a strategy that keeps patients as close to home as possible, talked about opportunities to join forces with Anderson County Hospital in Garnett, and said they could explore options to build a medical arts clinic on hospital grounds. Typically, a lease agreement includes a payment that would offset at least some of the hospital’s debt. Allen County still owes about $26 million for hospital construction.

“We don’t know what they’re going to bring back but so far it seems favorable,” Korte said. “My goal is to put together something where we can go long term with the hospital and not have to do this again very soon because it’s caused a lot of concern among our employees, doctors, and people in town. Being uncertain makes people nervous.”

ACRH has operated under a management contract with HCA since the new hospital facility opened in 2013. HCA, one of the largest for-profit healthcare providers in the world, bought Health Midwest in 2005, which previously managed Allen County Hospital. HCA leased the hospital from 2006 until it switched to the management agreement. 


Shower situation resolved

ACRH will receive $175,000 to fix leaking showers, as part of a mediation agreement with contractors who built the facility in 2013. 

Leaks in at least six showers in different areas of the hospital resulted in water seeping into patient rooms. The first incident was discovered almost immediately after construction wrapped up and has continued since then. 

Extensive examinations revealed problems with construction and incorrect building specs. Cameras inserted into the walls found issues with numerous showers, even though some leaks had not breached patient rooms.

The hospital eventually sued the builder, Murray Company of Overland Park. Attorneys reached a deal, which trustees approved Tuesday, that will resolve the matter. In addition to Murray Company, several contractors are involved in the agreement.