Hospital task force focuses on lease debate


Local News

August 2, 2018 - 11:29 AM

A task force assigned to look at future management of Allen County Regional Hospital agreed Wednesday there’s still time to consider all options on the table.
“We have a year and a half,” noted Alan Weber, who serves as a counselor for the county. “I’d hate to see us rush into any decision.”
The biggest decision to be made in the coming weeks is whether the county favors continuing to maintain responsibility of operating the hospital through a management company, or simply leasing the building and letting another entity assume the risk (and rewards) of running its own critical access facility.
Hospital Corporation of America’s management contract with the county is set expire in June 2020, thus necessitating the task force’s formation.
The county has the option of keeping HCA in charge; finding another company to manage the hospital; or to lease the facility to a not-for-profit organization.
At Wednesday’s meeting, task force members got their first look at a request for proposal the county plans to send to potential management groups, including HCA.
But before they push forward, task force members said they need to see first if there’s interest in pursuing a lease option.
“If the board is willing to look at a lease and walk away (from a management plan), it’s an entirely different issue,” Hospital Trustee Loren Korte said.
Korte and fellow Board member Patti Boyd spoke in favor of keeping the management model because of the control the county retains.
“I’m interested in all options for management,” Korte said. “I don’t think the community wants to walk away from the hospital. Finances aren’t doing great, but they’re doing OK.”
Boyd agreed, noting she has fielded several calls from concerned patrons once the idea of  possibly leasing the hospital again was made public.
Many calls came from residents who donated to the hospital’s Campaign For Excellence, to purchase equipment not covered in the hospital’s construction.
“We couldn’t do that with a lease,” she said
“Several million dollars were contributed,” Weber agreed. “The community was pretty thrilled with not leasing it any more.”
“We funded it,” Korte said. “It’s Allen County-owned and operated.

PRIOR TO 2013, the county retained control of the old Allen County Hospital from the time it was built in the early 1950s until 1981, when a lease agreement was reached with Health Midwest for $1 per year.
HCA assumed the lease when it bought Health Midwest and leased the hospital from 2003 to 2013. But when physical conditions of the 60-year-old hospital deteriorated to the point a new building was necessary, HCA deferred from investing.
The county was then forced to take the matter into its own hands and used municipal bonds to build the new hospital on North Kentucky Street. The switch entailed the county resuming ownership of the hospital because the new arrangement required a lease to a non-profit entity. HCA is a for-profit enterprise.

HOSPITAL Board member Terry Sparks isn’t as eager to shut the door on the idea of leasing the facility.
He noted Wednesday the county continues to face responsibility for more than $26 million in outstanding debt from the facility’s construction, particularly because of ACRH’s inability to draw more local patients.
“When I look at our market share being 29 percent of our primary service area, to me, that’s a cause for concern,” Sparks said. “I guess I’m hearing from different people, ones who are concerned about the county’s responsible for this debt.”
If finding a new partner, and going through with a lease, would help the hospital’s market share, such an option should be pursued, Sparks said.
With that in mind, the task force members agreed to open the discussion to the full ACRH Board of Trustees, which meet again Aug. 28.
“It’s going to have to be an executive decision,” Korte said.

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