Curing hospital woes won’t come easy
Published 12:09 am Sunday, March 2, 2008
All eyes are on Natchez Regional Medical Center as its board of trustees works fast to right the listing ship navigating through a sea of debt and an ocean of mismanagement.
Let’s consider a few points about the present situation at the hospital.
First, the financial woes facing the hospital didn’t happen overnight. Since the 1980s when reimbursement cuts began being made, the hospital began falling on hard times.
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And, in the grand scheme of things, the debt it carries is small potatoes compared to the revenue it generates. For a business that books $113 million in revenue, the $25 million in total debt seems small.
To put that in perspective, consider a family who makes a combined total of $113,000 a year and has a house and two car notes to pay. Their debt-to-income ratio likely far exceeds that of Natchez Regional’s.
So while the debt number might look staggering, put in perspective mismanagement seems to be a bigger worry than just the debt.
Since financial woes began however, keeping the hospital’s head above water has been a constant struggle and a perpetual management concern.
It’s easy to sit and look back upon all of the mistakes made in the past.
Sure, the Adams County Board of Supervisors should have had some vision back in the early 1990s.
That was when then hospital administrator Bill Mitchell came before the board seeking approval to buy out the competition. He even had the cash saved up to fund the deal.
But the supervisors said, “No thanks,” effectively sealing the deal on the next decade and a half of Cold War-like escalation of services and equipment.
Perhaps longtime hospital board attorney Walter Brown describes it best.
“It’s literally become an arms race,” Brown said, referring to the almost constant attempts by competing medical facilities to keep up with the Jones next door, across the street or across the river.
One has to wonder if the problems facing Natchez Regional signal the medical version of the Berlin Wall will soon fall in Natchez.
Signs of chinks in the armor are everywhere.
A number of people are crying for the hospital to be sold outright. That might be the ultimate answer, but it’s a proposition that will take some time and finding the right buyer.
Talk of bankruptcy is also fairly commonplace. Bankruptcy isn’t a bad interim option; as it would freeze all the currently owed debt for a while, given the hospital some breathing room until the storm winds settle a bit.
Attorney Brown idealistically hopes regardless of the path ahead, the arms race can stop.
“Maybe we can sit down and say, ‘If we’re all going to be here, how can we cut up this pie so everyone can coexist. That’s the best way to handle it for the community.”
Perhaps, but it’s also the one that would take the most work as you’ve got two for-profit competitors nearby presumably sucking up the “gravy” patients — those who are more likely to pay.
Why would they want to give up the gravy train?
It makes sense that any changes to Regional would need to be slow and measured or else the quality of healthcare would likely be compromised. It seems unlikely the other area medical facilities could easily handle the load if Regional were to close with little notice.
The best of all possible scenarios is for the board of supervisors to levy some tax millage for a year to help the hospital free up some cash.
The supervisors can pull the millage back off during the next budget cycle.
During that time, the board of supervisors and hospital board should meet publicly to discuss the options for the future. Let the taxpayers have a good understanding of what each option means and let them have a voice in the decision.
In an ideal world, we could find a large non-profit healthcare company to come in and buy both Natchez hospitals in one fell swoop. Further, that company would agree to build a truly state-of-the-art facility.
By having two hospitals we duplicate many services, unnecessarily.
One thing is certain. Natchez cannot continue to support two hospitals for much longer, at least not without drastic changes in the arms race.
Kevin Cooper is publisher of The Natchez Democrat. He can be reached at 601-445-3539.