3 entities remain in Natchez Regional Medical Center selling processPublished 12:12am Friday, September 20, 2013
NATCHEZ — Negotiations for the sale of Natchez Regional Medical Center are ongoing as the candidates to be the stalking horse bidder spend time in the hospital’s digital data room.
Officials last week said three health care entities have agreed to be participants in the stalking horse process, and Healthcare Management Partners Director Clare Moylan said none of the participants have dropped out of the discussion.
“We are hopeful that within a matter of weeks we will have identified a stalking horse,” she said.
Healthcare Management Partners was hired by Adams County in July to help negotiate the sale of the county-owned NRMC.
The Rev. Leroy White, chairman of NRMC’s board of trustees, said the three potential stalking horse bidders have been given access to the hospital’s digital data room, which houses and allows bidders access to proprietary information about the hospital’s finances, employees and outlook for coming years.
Butler Snow of Jackson created the data room for the hospital, White said.
“To get in, you need a password, and to get a password you have to sign a confidentiality agreement,” White said. “Once we open the bidding, all the people who are going to bid can go into the data room.”
Moylan has previously said that HMP has a draft purchase agreement prepared for the stalking horse bidders to review.
In the stalking horse process, the hospital’s representatives — in this case, HMP — will negotiate a selling price with one of the interested parties. Once that price and any stipulations are decided, the agreement with the stalking horse becomes the base bid for the hospital’s sale.
If no one outbids the stalking horse, the hospital is automatically sold to the stalking horse, which would have provided the county with a security to ensure the sale.
Once the stalking horse candidate is identified, the agreement has to be ratified by the Adams County Board of Supervisors. When the supervisors execute the agreement, the county has to advertise the sale for 30 days. The identity of the stalking horse will be made public at the time that the agreement is ratified.
At the end of the 30-day advertising period — and on a date named in the legal advertisements — the hospital will officially be placed up for auction.
If during the advertisement period 1,500 residents sign a petition objecting to the sale of the hospital, the matter will be taken to a referendum; if an objection is not filed, the sale can proceed.
When deciding to use the stalking horse procedure for the sale, the supervisors — acting on the advice of the hospital’s trustees — limited the initial approach to potential stalking horse bidders to the six non-profit health care systems within a 150 mile radius of NRMC that regularly treat patients from the Miss-Lou.
This arrangement excludes Health Management Associates, the parent company of Natchez Community Hospital, from the stalking horse process, though it does not prevent HMA from bidding when NRMC goes up for sale.
Hospital administrators have said that the sale is necessary because changes in health care law will make maintaining an independent, rural hospital logistically and financially difficult.
Officials have likewise said the sale is in the best interest of the community’s greater health because making the hospital part of a larger system is the only way to attract the necessary number of needed physicians to the area, and that only a larger health care system can afford to replace the hospital’s aging physical plant.
At the public hearing to discuss the rationale for putting the hospital on the market, hospital Chief Executive Officer Bill Heburn said he believed if the hospital was not sold it would have to be closed in two years.
HMP marketed the hospital for sale following its 2008 bankruptcy, and had permission to use a stalking horse process, but at that time no buyer came forward.
NRMC was built in the late 1950s with $800,000 in local funds, the rest of its $2.4 million construction underwritten with state and federal monies. It opened in 1960 as Jefferson Davis Memorial Hospital.
NRMC does not receive tax support and has been financially independent since 1974, but it is backed by a 5-mill standby tax required by the Mississippi Development Bank in 2006 when the hospital asked for the MDB to reissue its revenue bond.