Hospital consultants meet with candidates for salePublished 12:13am Saturday, September 14, 2013
NATCHEZ — Natchez Regional Medical Center officials said the consultants hired to help market the sale of the hospital have met with two potential bidders this week.
The Rev. Leroy White, chairman of NRMC’s board of trustees, said Friday representatives of Healthcare Management Partners met with the potential stalking horse bidder candidates earlier this week.
One of the representatives from HMP was Bruce Buchanan, White said. Buchanan was the hospital’s administrator for part of the time HMP managed NRMC following the hospital’s 2008 bankruptcy.
HMP will meet with a third candidate next week, White said. Those discussions will include Scott Phillips, HMP’s chief executive officer, who also managed NRMC during the 2008 bankruptcy.
HMP Director Clare Moylan said the meetings thus far have been walking the potential bidders through the financial models that show the hospital’s potential to grow and to capture the outmigration of patients.
“We have been meeting to really help them understand the size of the opportunity and to respond to some of their queries about the market in Natchez, about the hospital and about the doctors,” she said.
White said he would likely be able to discuss which healthcare systems the meetings were with next week. Moylan said keeping the identities of the potential bidders secret at this point helps the bidding process.
“They are aware that we are only looking at non-profits, but we don’t want to release the names of who they are so they feel some competitive tension to sign the stalking horse agreement,” she said.
Adams County Board of Supervisors President Darryl Grennell said the last update the county board recieved about the sale was at the public hearing to discuss the matter Sept. 6.
“We certainly want to be updated, to know how everything is moving forward in terms of the negotiations and the stalking horse,” he said.
Under the structure the board of supervisors adopted for the sale of the county-owned hospital, the hospital and its consultants have approached six non-profit health care systems in markets that treat people from the Miss-Lou to try to negotiate a stalking horse bid.
The stalking horse is an entity that negotiates an agreement to purchase the hospital. Once that agreement is reached and is ratified by the board of supervisors, it will be considered the base price for when the hospital goes to auction and all other bidders will have to best the stalking horse bid in order to purchase the hospital.
Moylan said HMP has already prepared a draft purchase agreement that has been provided to the stalking horse bidders, and the next step is to discuss the terms of the agreement with them.
Once the stalking horse bid is negotiated and accepted, the county will pass a resolution to sell the hospital. The hospital board’s attorney Walter Brown has previously said that at that time, the hospital will contact approximately 90 other hospital systems to solicit potential bids.
The identity of the stalking horse bidder will be made public at the time of the adoption of the sale resolution, and will be published at least three times over the month following its adoption.
During that month, residents who object to the sale will have the opportunity to call for an election to determine if the sale should go forward. The petition would require 1,500 signatures or 20 percent of qualified electors in the area, whichever is less. If no petition is filed, the sale can move forward without an election.
Moylan said HMP hopes to have a bidder identified and a purchase agreement signed within three weeks. The process likely will need that time because not only will the supervisors have to approve the agreement, but the boards of the stalking horse bidding company will have to approve it as well, she said.
Hospital officials have advocated for the sale of NRMC in recent months, saying that the costs and logistics of the changing health care industry make sustaining an independent, rural hospital impossible. Hospital CEO Bill Heburn said during the public hearing about the potential sale last week that the hospital had to sell or — in his opinion — it would close within two years.
Hospital officials have likewise said that recruiting physicians to the area is difficult because young doctors often want to be part of a larger health care system.
HMP marketed the hospital for sale in 2008, but no buyer ultimately came forward.
NRMC opened in 1960 as Jefferson Davis Memorial Hospital. Its $2.4 million construction was underwritten by an $800,000 local contribution and state and federal funds.
It has been financially independent since 1974 and does not receive tax support, but is backed by a 5-mill standby tax that the Mississippi Development Bank required the hospital to get in 2006 when it asked for the MDB to reissue its revenue bond.