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Supervisor urges NRMC frugality throughout sale process

NATCHEZ — An Adams County supervisor stressed Monday operations at the county-owned hospital should be conducted in as fiscally responsible a manner as possible in case Natchez Regional Medical Center is not sold.

Supervisor Mike Lazarus said during the board of supervisor’s meeting he wants to make sure NRMC is not spending its funds too freely on the confidence the hospital will be sold.

“I hope we are watching our money, and we need to be — in my mind — making cuts to keep the hospital viable,” Lazarus said. “There is no guarantee this hospital is going to sell.”

Lazarus said his intention was not to call out anybody in particular, but he had heard of equipment being bought.

“I hope we are not spending money thinking for sure it is going to sell,” he said.

“I own a business, and I know what it takes to make it, and you can’t just spend money you don’t have just because we have this account sitting in the bank we can draw out of.”

NRMC administrators and trustees said earlier this year the hospital had at times had to draw from the settlement with its former management company — Quorum Health Resources — to meet some obligations.

The amount of the settlement, which was reached after NRMC sued QHR on allegations it had mismanaged the hospital to the point of bankruptcy, was sealed by a federal judge at the request of QHR and NRMC, has not been publicly disclosed.

The attorney for the hospital’s board of trustees, Walter Brown, met with the supervisors behind closed doors Monday, and afterward said no new purchases for the hospital have been made.

“The hospital has been very frugal at this point in time,” Brown said. “I discussed that with (Lazarus), and I said the hospital has not spent out of the ordinary, and in fact if you look at our budget for this year, we have reduced it by $1 million through cutbacks.”

Brown said he also discussed with the board the ongoing effort to sell NRMC.

Nothing significant has changed in the last week, Brown said, and four parties are still making expressions of interest.

“I explained to the board where all of those entities are in the process,” he said.

The four entities break down into two stalking horse candidates and two future bidders for open auction.

Under the stalking horse process, a health care system will negotiate a selling price with NRMC and — once both the board of supervisors and the stalking horse’s board of directors ratify that price — that price will become the base price for any future sale.

After the stalking horse agreement is met, the hospital will be put up for auction, an event to which more than 90 health care systems have been invited. If no one outbids the stalking horse at auction, the sale is automatically awarded to the stalking horse.

Stalking horse negotiations have been limited to non-profit hospitals within a 150-mile radius of the Natchez area that often treat people from the Miss-Lou. This excludes Health Management Associates, the parent company of Natchez Community Hospital, from the opening salvo of the sale, but Brown said HMA is welcome to bid at auction and he expects a bid from the company.

Brown said he hopes to have news of a stalking horse bidder in three weeks.

Healthcare Management Partners, a consulting firm, is managing negotiations with stalking horse candidates. HMP led a similar though unsuccessful effort to sell the hospital out of bankruptcy in 2008.