Hospitals throughout the country struggle to stay ahead. Not only are they grappling with lower reimbursement for services from government and private insurance plans; they also are facing costly, complex regulations, such as one to protect patients’ private health information that went into effect on April 1.

No one &045; hospital official, patient or medical professional &045; would disagree with the need to protect confidential information.

However, the new security rule, the third to be mandated by the 1996 Health Insurance Portability and Accountability Act, may cost hospitals nationwide a total of $22 billion during the next five years. And this new regulation is only one example of many.

For the two hospitals in Natchez, other local factors have affected the bottom lines. One is the closing of International Paper’s Natchez mill and other industries in recent years.

Another is the opening of an outpatient medical center in Vidalia, La., where procedures once carried out in the two Natchez hospitals now take place in the new facility.

Natchez is home to a public facility, Natchez Regional Medical Center, and a privately owned one, Natchez Community Hospital. Together, the two hospitals are the largest employer in Adams County. For 15 years, the

question of consolidating the two hospitals has been a topic of debate.

Natchez Regional, a 179-bed hospital owned by the citizens of Adams County, employs more than 450 fulltime. Community, with 101 beds and owned by Health Management Associates of Naples, Fla., has about 275 fulltime employees.

A missed opportunity

In the early 1990s, the Natchez Regional Board of Trustees &uot;thought they had a very sound idea when they proposed the $8-million purchase of the private hospital, then Humana Hospital,&uot; said Walter Brown, Natchez Regional attorney. &uot;We had that much cash. It was a great disappointment that the proposal failed.&uot;

Adams County Supervisor Sammy Cauthen remembers it well. &uot;I’m just as sorry as I can be that we didn’t buy it when we could. We had the money in the bank.&uot;

The future for hospitals was becoming clear at the time, Brown said.

&uot;You could see it coming, and that’s probably why Humana wanted to sell.&uot;

All signs pointed to changes in how the federal government would handle health care reimbursements. It happened first in Medicare and later in Medicaid. In recent years, the reimbursements by private insurers have followed the pattern to a degree.

&uot;It has proved to be what was anticipated,&uot; Brown said. &uot;Hospitals across the whole nation are in desperate situations. We’re all struggling.&uot;

When Humana joined with some Natchez doctors to open the private hospital in 1973, &uot;health care reimbursements were good. Everyone thought there was nothing wrong with competition,&uot; Brown said. &uot;But competition is not healthy in hospital health care. There is no longer the money to support the services people want and need.&uot;

Looking for partnerships

With that in mind, Natchez Regional trustees have begun discussions with larger hospitals around the state, exploring the possibility of creating &uot;an affiliation to maximize the effective delivery of health care services,&uot; Brown said.

&uot;We can’t do what we did in the 1980s and ’90s. We’d like to establish this relationship with larger hospitals but maintain our independence, to be able to retain some of the things we can do now,&uot; he said. &uot;We don’t want people to have to travel miles away from Natchez to have things done we can do here.&uot;

Brown said the times call for consolidation of services. &uot;In an age in which everyone has a hard time paying for health care, we’ve got to get smart. You have to consolidate. Cooperation between the two Natchez hospitals could help to relieve some of the difficulties both face, he said.

Cauthen agreed. &uot;Both hospitals have qualified workers and do a good job,&uot; he said. As for duplication of services, &uot;it’s a shame the hospitals couldn’t get together, especially on some of the very expensive equipment.&uot;

Cauthen said he remembers when the hospitals had a tradition of helping each other. &uot;At one time, if we were out of a particular item, we could borrow it from them and replace it later. That doesn’t happen any more.&uot;

Natchez Regional CEO Jack Houghton said the loss of the International Paper mill at Natchez has bruised both hospitals.

&uot;The two Natchez hospitals have suffered as a result of the loss of IP directly and indirectly from the industries related to IP,&uot; Houghton said. &uot;It was a major setback, not only for the community at large, for grocery stores, gas stations and businesses, but it had a direct effect on the hospitals.&uot;

A new facility in the picture

The new River Park Medical Center is a &uot;super nice facility,&uot; Cauthen said. Still, he agreed with others that the Vidalia center has had an impact on bottom lines both at Natchez Regional and at Community.

Natchez Community CEO Allen Tyra said, &uot;River Park definitely has affected us. What they have taken is outpatient diagnostic and surgical procedures that hospitals like ours need to survive. It has hurt Adams County.&uot;

At Natchez Regional, Houghton said, &uot;Since River Park opened in Vidalia, the doctors there have pulled a substantial part of their business out of our hospitals and have taken it to Vidalia.&uot;

Dr. John A. White, one of the owners of River Park, said he and other physician owners knew their facility would have an economic impact on the two Natchez hospitals.

He said, however, that all of them had expressed to both hospitals how important it was to build a facility that catered to outpatients.

&uot;And also, as we’re seeing now, there was a critical need for office space,&uot; White said, referring to the construction of a new medical office building in Natchez.

White sees the major role played by River Park as &uot;showing that this community is interested in advancing its health care delivery to the population. I hope it will spark interest in others to come to the area.&uot;

White said the Natchez area is overdue a new hospital. &uot;We’re really behind the times,&uot; he said. &uot;There has been no major renovation or construction by either hospital. I feel deep in my heart that we need a new facility. Our community has gone long enough without a new hospital. The supervisors know this. And the members of the Homochitto Valley Medical Society, the physicians, have that prevailing opinion.&uot;

Both hospitals have eyed each other cautiously, he said, leaving them to forego bold moves toward big projects.

&uot;It’s no secret that overtures have been made many times by HMA to buy Natchez Regional,&uot; White said.

Natchez Community goals

As a private hospital, Natchez Community is like any other business, Allen Tyra. &uot;If you’re going to be viable in any business, you have to make a profit to invest back in the company, to upgrade. If you’re running at a deficit, you’re not paying vendors or recruiting physicians.&uot;

Both hospitals are forward looking. Both have recruited new physicians, including hospitalists, cardiologists and neurologists. Both have invested in capital improvements.

Tyra said the idea of consolidating the two hospitals &uot;has been tossed around for years. Is the idea of consolidating good or not? I don’t know. I’m left out of the loop on that for all the right reasons. It allows me to do my job locally, to take care of Natchez Community Hospital.&uot;

Tyra said Natchez Community Hospital continues to look for ways to provide more physician and hospital services. His goal is to provide what physicians need to provide the services for their patients &uot;so the citizens of Adams County don’t have to travel to get the care they need.&uot;

He takes pride in the success he has had in recruiting physicians, calling each one &uot;a new small business. We’re responsible for a lot of economic development in Adams County. And we pay more than half a million dollars in property taxes.&uot;

Health Management Associates owns nine hospitals in Mississippi, Tyra said. &uot;We’re a growing company and always looking to pick up hospitals that fit our niche.&uot;

The HMA Web site says the company selects hospitals that have a clear demographic need, demonstrate high potential for growth, are located in the Southeast or Southwest in growing communities with populations of 40,000 to 300,000, are preferably in states with certificate of need regulations, possess an established physician base and are available at reasonable prices.

Looking forward at Regional

On Tuesday, a groundbreaking behind the old Medical Arts Building adjacent to Natchez Regional signaled the formal beginning of construction of a new medical office building at the site.

Physician investors purchased from Adams County supervisors the land on which the building will stand and are paying for the construction. A covered walkway will connect the new building to Natchez Regional.

&uot;The new medical office building? I’m not sure what the impact is going to be on us,&uot; Tyra said.

Attorney Walter Brown said the new building signifies a commitment to the future by Natchez Regional, which will house some of its services in it. &uot;We have to assume that Natchez Regional is going to be here a long time. We have to plan for the future. That’s what the medical office building is all about.&uot;

Natchez Regional CEO Houghton said the new medical building provides convenience both for physicians and for patients.

&uot;And we’re working with the physicians on a possible joint venture on some new or enhanced services to go in the new building,&uot; Houghton said.

Adams County Administrator Charlie Brown said Natchez Regional is self-sustaining. &uot;They’ve never come to us to levy taxes for them.&uot; He believes the new medical office building will have a good financial effect on Natchez Regional. &uot;I think it will bring more patients, and I hope it will bring more doctors to town.&uot;

In his close association with the Board of Supervisors, he has not heard any discussion of consolidating the two hospitals lately, Charlie Brown said. He recalls the proposed buyout of Humana in the early ’90s and the reaction of employees of the private hospital. &uot;We had hundreds of their employees come to our meeting very upset, and the supervisors relented.&uot;

The same reaction might come from Natchez Regional employees if the situation were reversed, he said. &uot;For one thing, right now, the Regional employees are under PERS (Public Employee Retirement System), an excellent program. That would certainly be a drawback for employees of Natchez Regional if they were to lose that.&uot;