Hospital nears deal with St. Luke’s

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Local News

June 26, 2019 - 11:00 AM

Months of speculation came to an end Tuesday as Allen County Regional Hospital?s Board of Trustees essentially agreed to lease the hospital to Saint Luke?s Health System of Kansas City.

A contract has not been finalized, but the board signed a ?memorandum of understanding? to lease the hospital to Saint Luke?s and directed the county?s attorney to notify Hospital Corporation of America of its intent to terminate the current management contract.

The positive reputation of Saint Luke?s and its experience with rural critical access hospitals, including nearby Anderson County Hospital at Garnett, as well as Saint Luke?s willingness to help pay the county?s debt for the building convinced the board to make the management change, ACRH Board Chairman Loren Korte said. 

?I think they?ll be a good fit for us,? Korte said. ?I heard from a lot of folks saying ?We like the idea of working with Saint Luke?s.??

Hospital staff were notified Friday that all employees in good standing would be able to keep their jobs and would be eligible for benefits through Saint Luke?s. Employment offers could include administrative employees, though their job description and responsibilities might change, Korte said. 

It was important to reassure staff their jobs would be safe, Korte said; Friday?s letter to employees asked for patience as negotiations continue.

A contract has not been signed as attorneys hash out final details, so information about the arrangement was limited. Korte said he expects Allen County and Saint Luke?s to issue a joint press release in the coming days. 

It appears, though, the lease would cover a period of 10 years with opportunities to be extended. Saint Luke?s would essentially pay the county?s bond payments for debt incurred for construction of a new hospital facility in 2013. The county will maintain ownership of the property, with Saint Luke?s taking over administration, employees and services. 

The lease could start as early as Jan. 1, 2020, though the current contract with HCA doesn?t expire until June 30, 2020. It was not immediately clear how the timeline and transition would play out.

The board began studying its management arrangement with HCA more than a year ago. Trustees initially were opposed to a lease but reconsidered after studying proposals from HCA, Saint Luke?s and other healthcare companies ? and after hearing from local residents and county commissioners.

After watching other area hospitals struggle, like with the recent closing of Mercy Hospital at Fort Scott, trustees sought a solution that would best sustain the hospital for decades to come, Korte said.

?Frankly, I had some concerns with leasing early on,? Korte said. ?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.?

Saint Luke?s is one of the largest healthcare systems in the region, with more than 16 hospitals and campuses in Kansas and Missouri.

 

IN OTHER news, the hospital?s board of trustees:

? Heard a report about improved patient satisfaction reports. Chief Nursing Officer Patty McGuffin gave the board an update on changes with the reports, after national research company Press Ganey recently took over the service. 

? Learned the hospital?s number of inpatients was about 21% lower than expectations in May, with an average daily census of 7 compared to 9. Chief Financial Officer Larry Peterson?s monthly financial report showed lower numbers of inpatients, surgeries, emergency room and outpatient visits than expected. Because of those factors, revenue fell about $190,000 short of budget expectations. After adjusted for expenses, the net loss was about $30,000. 

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