NRMC contract to be finalized soon
Published 12:00 am Monday, September 27, 1999
Natchez Regional Medical Center’s new management contract with Quorum Health Resources should be signed before the current contract expires at midnight Thursday.
The five-year contract between Quorum and NRMC has been under negotiation since June.
&uot;The principal issues negotiated were liability and indemnification,&uot; said Walter Brown, attorney for the NRMC Board of Trustees.
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&uot;(Monday) the board gave the chairman the authority to execute a contract by Wednesday or Thursday of this week,&uot; Brown said.
The new contract will take effect Oct. 1.
Brown said the new contract is very similar to the old contract in many respects.
&uot;A performance evaluation based on the actual picture of the hospital is built into this contract,&uot; Brown said.
However, nothing in the contract address a key financial concern of the county-owned facility.
&uot;There’s nothing in contract to compensate for Balanced Budget Act,&uot; said Billy Gillon, president of the NRMC&160;Board of Trustees. &uot;Under the contract, if we still have losses – as defined on audited financial statements – that exceed $1.5 million, we could void the contract.&uot;
One key difference under the new contract is the securing of a permanent administrator. Interim administrator Karen Fiducia has been at NRMC&160;for more than a year.
&uot;What Quorum will do as soon as the contract is in place is to begin to look for full time administrator,&uot; Gillon said. &uot;Financial officer David Cronic is permanent and will stay. They’ll bring two or three people for us to interview and we will actually make the decision on a permanent administrator.&uot;
Fiducia will continue as interim administrator until the new administrator is brought in.
&uot;There’s no doubt the administrator will have their own management style and with the support of David Cronic and Charles Mock and other folks here, they’ll be able to move in,&uot; Gillon said.
Gillon estimates that by the end of November, NRMC will go through an interview process for an administrator and will have a new administrator in place by the end of January.
The final price tag on the contract is still not settled, Brown said. &uot;At this point it’s classified. I don’t think it will change, but it may. It hasn’t been a major issue. The contract price is actually less than the previous contract.&uot;
The new contract has produced a net reduction in cost of 6.5 percent from the old contract, Gillon said.
&uot;When you consider the inflationary increase they would have gotten under the old contract, the new contract effectively achieves a decrease of about 6.5 percent,&uot; he said.
Gillon said the hospital board hasn’t really worried about the contract.
&uot;Walter’s interest has been protecting the hospital. I think he has done an excellent job,&uot; Gillon said.
Now that the hospital’s budget has been brought in line with revenues, Gillon said he didn’t anticipate many changes at NRMC. &uot;We don’t anticipate any changes in at least the next two years,&uot; he said.
Services that were under review during the August layoffs are still under review. &uot;We’ve passed the time of high profits and high margins – excess money in healthcare. Every hospital in every locale will constantly review services, benefits, and the community’s needs. That’s the reality of healthcare now,&uot; Gillon said.
Based in Brentwood, Tenn., Quorum has managed NRMC since 1992. The board of trustees sought requests for proposals from other management companies earlier this year, but Quorum was the only company to express interest .