NRMC up for sale?

By Kevin Cooper (Contact) | The Natchez Democrat

Published Friday, February 5, 2010

NATCHEZ — Adams County Supervisors are mulling whether or not to pursue discussions with a potential buyer for county-owned Natchez Regional Medical Center, sources close to the hospital said.

Last week, Natchez Regional’s Board of Trustees were approached by a hospital broker from Texas, whose clients allegedly include Health Management Associates, the Naples, Fla., corporation that owns NRMC competitor Natchez Community Hospital.

NRMC trustees apparently took no formal action on the matter. However, one trustee who did not want to be named said the majority of the board did not wish to pursue discussions with anyone affiliated with HMA.

Hospital trustee Dan Bland, however, took the matter directly to the Board of Supervisors Monday.

Bland said if a good offer is made he thinks the county should consider selling NRMC.

Bland said he has lingering worries over the hospital’s financial status long-term. He said the decision to sell or not to sell would be up to the supervisors, not the hospital board.

The hospital’s financial woes date back several years, but culminated in the 2008 ousting of management firm Quorum Health Resources, failed attempts to find a buyer in 2008 and the eventual bankruptcy filing in 2009.

Natchez Regional filed a federal lawsuit in December 2009 against Quorum seeking $46 million for damages stemming from what the hospital alleges was gross mismanagement.

The lawsuit is still pending.

Despite the alleged interest and early stage discussions with buyers, legally, since the county owns Natchez Regional, Bland is correct that the hospital’s board of trustees would not have to be involved in a decision to sell, hospital attorney Walter Brown said.

But Brown said state law requires any decision to sell a public hospital must go through a series of steps that includes performing a study of the market conditions and the hospital’s financial health.

Brown said in his opinion the previous study made in 2008 when the hospital was being marketed for sale would no longer be valid since the market and the health care industry have changed.

Even if the supervisors eventually opt to move forward with a sale, state law allows that the public could stop such a sale by forcing the matter to a countywide vote by getting 1,500 registered voters to sign a petition putting the matter on a ballot.

Bland said he believes that, unless something drastic happens, long term Natchez Regional may be headed back into financial trouble, since the hospital will, this month, begin making debt payments as required by their bankruptcy agreement, cleared last year.

“We’re not going to make it, long-term,” Bland said.

Hospital trustee Bernie Pyron said his utmost concern is that county residents retain their homestead tax exemption, which is pledged as collateral on the approximate $16 million in bond debt the hospital still has outstanding.

Additionally, the county has pledged up to 5 mills of ad valorem tax to cover the debt if the hospital were ever to be in default.

“I love the hospital, and I’ve tried to do everything I can above the board for the betterment of the hospital, but it’s just a matter of economics,” Pyron said.

Board of Supervisors President Darryl Grennell confirmed that the board heard from Bland in executive session, but said no offers or commitment letters had been made in that meeting.

Grennell said before further discussions could be made, the supervisors are attempting to set up a meeting with NRMC’s administrators and financial officers to look at the current financial condition of the facility.