It’s a deal

By

Local News

October 23, 2019 - 11:02 AM

It?s official. Allen County will lease its hospital, becoming Saint Luke?s Allen County Regional Hospital.

Allen County commissioners signed a resolution authorizing the lease Tuesday morning, followed by approval by the hospital?s board of trustees that night. The action capped months of negotiations; nearly two years ago, the hospital board began debating whether to make a management change and in March decided to lease to the Kansas City-based Saint Luke?s Health System.

?The new partnership with Saint Luke?s offers wonderful opportunities for our patients, employees and community,? Loren Korte, hospital board president, said. ?We will have the benefit of a strong organizational partner and can be confident that the needs of our community will be represented.?

Some details about the arrangement still are not known, such as when Saint Luke?s will take over the facility; Korte expects it to happen sometime in early 2020. A transition team is expected to begin working on the process immediately.

?Allen County Regional Hospital provides vital services to the citizens of Iola and the surrounding community,? Julie Quirin, Saint Luke?s chief operating officer and senior vice president, said in a press release. ?Saint Luke?s is deeply committed to strengthening those services and bringing the resources of our health system to continue to serve patients and the community.?

The lease will last a minimum of 10 years, with options to renew after that. 

Saint Luke?s will take over operations, including employees, services and systems. 

Existing contracts with physicians and providers will be honored and employees will remain with the hospital but will become Saint Luke?s employees with benefits and health insurance provided by that organization.

The county essentially will become a landlord, Korte said. The county will maintain ownership of the facility and will be responsible for maintenance and upgrades. 

The county built a new hospital in 2013 for about $30 million. About $26 million of that debt remains. Saint Luke?s will make a lease payment that will cover the annual bond payment, essentially paying that debt. 

But, as landlords, the county will use an existing quarter-cent sales tax to pay for building maintenance and upgrades. In 2018, that sales tax provided $491,723.82 to the hospital; in 2017, the amount was $462,471.88. Those funds were used primarily to pay the loan.

Next year, the county plans to ask voters to extend the sales tax. Korte is hopeful voters will continue the sales tax, since they are no longer responsible for the bond payments.

The City of Iola also contributes half of its half-cent sales tax dollars to the hospital, but council members have yet to decide on whether to renew their commitment. Those revenues average about $320,00 a year.

Hospital trustees plan to meet with council members next week to ask them to continue the sales tax payments at least for the immediate future. 

 

County commissioners, from left, Jerry Daniels, Bill King and Bruce Symes sign a resolution Tuesday leasing the county?s hospital to St. Luke?s Health Systems. REGISTER/ERIC SPRUILL

 

THE FIRST step is to organize a new charitable corporation, St. Luke?s Hospital of Allen County, Inc. An operations board will be appointed, likely consisting of about five or six local members and two or three Saint Luke?s representatives.

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