Natchez Regional Medical Center sale possible this monthPublished 12:12am Saturday, December 7, 2013
NATCHEZ — The attorney for Natchez Regional Medical Center’s Board of Trustees said he has been “encouraged” by the response the hospital has received from potential buyers in recent weeks.
Though representatives of the county-owned hospital had at one time said they hoped to have a deal closed by the end of fall, NRMC trustees attorney Walter Brown said negotiations with three non-profit hospitals and one for-profit hospital are still open and ongoing.
“At this time, I am encouraged by the response we have received and believe before the end of the year we will have a tentative agreement with one or more of the parties involved,” he said. “The hardest part of it is getting everybody to shake hands on the terms you can reduce to a term sheet.
“The rest of it is not that difficult because we have already drawn up the asset purchase agreement.”
What those terms will be, however, is still a matter for discussion.
“It is not totally fill-in-the blank stuff, and the numbers that go in (the agreement) may not be the ones we propose given the circumstances we find ourselves in, but I believe by the end of the year we could have a tentative arrangement that could bring about a sale of the hospital,” Brown said.
Brown said the last couple of weeks have been productive in getting responses to interested people.
“At the same time, we have been trying to bring those people together to get the best deal we can for Adams County on the issues we have talked about from the beginning — eliminating the county debt of $14 million, protect our employees as best we can with continued employment — at least in the short term — and to have a quality health care institution here, particularly one that commits to having an aggressive program with recruiting physicians to our community,” he said.
Healthcare Management Partners, a medical industry consulting firm, is leading the discussions with potential buyers, as it did during the 2008 attempt to sell the hospital out of bankruptcy.
Though the negotiations are being conducted under the auspices of the hospital’s trustees, the Adams County Board of Supervisors will ultimately be responsible for the sale.
Supervisors’ President Darryl Grennell said the hospital board is scheduled to meet with the supervisors Dec. 16 to discuss the ongoing process.
“I am hoping by the end of the year, we will know something about the direction we will be moving in,” he said.
Brown said the hospital is still pursuing a stalking horse process, in which a sale price is negotiated with a buyer before the hospital is officially put to auction — state law mandates it be sold by bid — and the negotiated price becomes the base bid.
If no one outbids the stalking horse, the hospital is automatically sold to that buyer.
The county supervisors, acting on the recommendation of the hospital trustees, limited the potential stalking horse candidates to non-profit hospitals within 150 miles of NRMC that routinely treat area patients.
The for-profit hospital in discussion with the board is gathering information for when the hospital goes to auction, Brown said.
The county started the sale process earlier this year after the hospital’s administration expressed concerns about the viability of being able to operate long-term as an independent, rural hospital in light of recent changes in national health care policy.
The hospital’s aging infrastructure also needs to be replaced — something an independent NRMC cannot do on its own — and the trustees and HMP representatives have expressed a belief that the hospital will not be able to recruit additional needed doctors to the area without being part of a larger health care system.
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.