Hospital trustees take second look at lease option

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Local News

September 20, 2018 - 10:18 AM

A lease option for Allen County Regional Hospital is back on the table.
A task force studying hospital management agreed to talk to a Kansas City-area health system after facing criticism for excluding companies that only lease hospitals.
The task force is considering whether to renew its management contract with Hospital Corporation of America (HCA), which expires in 2020, or switch to a different management company.
“What I keep hearing is we need to talk to a particular entity, not leasing in general,” Patti Boyd, chairman of the task force and of the trustees, said.
She was referring to St. Luke’s Health System, a faith-based, non-profit health system with 18 hospitals in Kansas and Missouri.
St. Luke’s officials twice expressed interest in Allen County’s hospital, Terry Sparks, a task force member, said. He recently spoke to a senior vice president who indicated a team from St. Luke’s would be willing to visit the hospital and discuss lease options. She verified St. Luke’s would not be interested in managing the hospital, Sparks said.
“I understand the concern about giving up local control, but I think the health area is such a complicated, difficult business now,” Sparks said. “In the Kansas City area, St. Luke’s is consistently one of the top health organizations out there.”
Last month, the committee decided not to explore options to lease the hospital. Criticism from county commissioners and others forced task force members to reconsider.
When the task force met Wednesday, Dr. Charles Wanker said medical staff also wanted the task force to look at all options, including a lease.
“I don’t know if we do ourselves justice by looking at management only,” he said.
Loren Korte, task force member, agreed: “I say follow through and see where it takes us.”
A lease would allow a healthcare organization to run all aspects of the hospital, from management to staff to outpatient clinics and more. The organization would assume all profit or loss, and the county would lose control over decisions affecting the hospital.
Under a management agreement, the trustees tell managers what types of services they want to see implemented. HCA provides three top administrators to ACRH, and offers a variety of other services like help with physician recruitment, negotiating power for contracts, technology support and more.
Allen County’s hospital was leased from 1981 to 2013, but problems included a lack of services, low employee morale and poor upkeep on the building, souring the trustees on the idea. One final straw for trustees was when HCA refused to put any funds toward a new hospital.

THE BOARD then was forced to switch to a management contract with HCA, a for-profit entity, which cannot lease the hospital under the terms of municipal bonds.
Boyd and others who voted not to consider a lease said they were concerned about Allen County losing its ability to control what happens with the hospital. They also are concerned about financial responsibility, because taxpayers voted to build a new hospital in 2013 and about $26 million remains of that debt. A leasing company would need to agree to help pay those bonds.
The task force plans to invite St. Luke’s representatives to meet with the board next month to talk about lease options and possibly tour the hospital.
The task force still plans to ask health care companies for management proposals. They approved a final version of a “request for proposals” to send to potential suitors, outlining the types of services they want companies to provide. Companies have until mid-November to submit proposals.

 

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