Our View: Hospital proposals need, deserve close study

The Daily Advance

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Pasquotank County Commissioner Gary White nailed it when talking recently about the five lease proposals for Albemarle Hospital: “That hospital belongs to the people of this county.”

County commissioners and hospital authority members must keep that foremost in mind when reviewing the proposals before them and before coming to a decision on which one makes the most sense for this hospital. They must also keep in mind that the hospital serves a large part of northeastern North Carolina.

What’s at stake is the future of the facility, its employees and most importantly the current and future health care needs of local residents and patients.

Several months ago, a task force made up of Albemarle Health Authority Board members and Pasquotank commissioners solicited bids from health care systems for a long-term lease agreement, a process that attracted six proposals in December. That list was narrowed to five when one dropped out, and recently the commissioners apparently whittled serious contenders down to three proposals — Duke LifePoint, Sentara and Greenville-based Vidant, which is currently managing the hospital.

None of the proposals seem to have everything, but each offers attractive options that we believe make them worthy for consideration for a potential hospital partnership.

Critical to what we believe will be necessary to make a final choice is a comparison of the proposals’ length of lease, annual payments, services offered and factors affecting the convenience of services for area residents.

Also, just as important is how any accepted agreement addresses current employees, local input on the governing board, a commitment to investing in the hospital’s infrastructure and becoming a long-term partner in the community.

What needs to be clearly explained is what exactly is being considered. What are the pros and cons of a partnership with a larger health system versus full affiliation.

The winning health care system will have the freedom to manage the hospital to achieve its financial and strategic objectives. Local officials should have assurances, however, that those objectives meet local health care objectives. An agreement satisfying both is certainly within reach if a diligent, fact-driven review of the proposals is conducted.

Looking at the proposals, Duke LifePoint offers an annual lease payment of $2.5 million — about $1 million more than the offer from its nearest competitor, Sentara.

What LifePoint’s proposal doesn’t address, however, is the hospital authority’s debt of $64 million — an omission that apparently stood out to Commissioner Frankie Meads. While a large debt could certainly be a problem, we’re not aware of it being a game-breaker. Institutions like hospitals and local governments commonly carry debt, which is a sensible way to finance capital projects like expansions and new equipment, while they spread the payments out over time as many businesses would. It only becomes a problem if the debt exceeds the borrowing limit.

Sentara, meanwhile, has proposed a 10-year initial lease term, rather than the longer terms requested by other hospital systems.

That impressed Meads.

“It’s a lot easier to get out of a 10-year lease than a 30- or 40-year lease if it doesn’t work out,” he said.

Last week, members of the joint task force said they were still reading the proposals, which are lengthy and detailed. There’s no reason we know of to rush through them. Officials should take their time to fully understand the content.

Hospital Commissioner Ginger Parrish said she has a long way to go before forming any kind of opinion about which of proposals seems most promising.

“It’s just way too early in the process,” Parrish said. She also wants to hear what the public has to say at the upcoming meetings.

Similarly, Pasquotank Commissioner Bill Sterritt said he plans to listen to what Albemarle Hospital physicians and nurses have to say. It’s not just a decision of dollars, Sterritt said, its the public’s health care that matters.

How true.

Area residents have an opportunity this week to set the tone for determining which health agency is best suited to guide the future of Albemarle Hospital. A public hearing is set for 6 p.m. Tuesday at College of The Albemarle’s Community Auditorium. We urge citizens to show up, ask questions, and offer thoughts and concerns.

It’s your hospital.

Comments

People would actually find it

People would actually find it very hard to pick a private health care institution if it weren`t for these surveys. After all, majority wins and the majority`s opinion or feedback on a particular health care provider is what actually dictates if the provider gets on top of the private health care market. Same goes for therapists like the ones on http://www.illinoishypnosis.com, as they have the best reviews.

I wonder

I wonder how much of the hospital debt is due to people using the emergency room for nonemergency issues with no plans to pay for the care they received. The Emergency Medical Treatment and Active Labor Act (EMTALA) of 1986 has destroyed many hospitals and is directly related the rise in medical costs.

Not connected but does address the bottom line

The debt from the questions and answers portion of ahfuture(dot)org someone else asked about it, their reply is capital improvements to the building and equipment. I'm guessing it is back in 2008 they did a massive upgrade to the ER and OR. It was a good business plan but the problem was Tanner ran off Drs who brought in money.

It hit the profit margin

Emergency Medical Treatment and Active Labor Act is however definitely partly responsible for the profit margin of the hospital falling from 16 percent down to 3 percent and now borderline red. Look at the stats - 70 percent of the hospital's patients are low pay (Medicare, Medicaid, or pay what they can), NC district 1 has over 25,000 people considered indigent, NC District 1 is tied for most unhealthiest meaning more care when hospitalized.

Not much of an option? Do the math.

Do the interest math on the 64 million dept at the going 20yr AA municipal interest rate of 3 percent yearly. With Sentara's offer the county pays 1.17 million each year only in interest. With Lifepoints offer the county pays 1.92 million in interest only per year. The only offer that takes over all debt at the beginning is Vident. Any other offer keeps the county indebted.

Sentara, please.

We will all be served very well by associating with Sentara.

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