NRMC not alone in troubles

Published 12:01 am Thursday, March 20, 2008

NATCHEZ — Many of the problems facing Natchez Regional Medical Center are similar to those seen in other Quorum-run hospitals around the country.

Quorum Health Resources was hired by the hospital in 1992; in 2004 their contract was extended to 2009.

But recently, as the hospital faces serious short-term financial problems and an uncertain long-term future, board members have called for a cancellation of Quorum’s contract.

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At Hale Hospital in Haverhill, Mass., city officials sued Quorum and won a $2.8 million settlement.

Hale, a city-owned hospital, alleged Quorum significantly overstated financial statements and omitted losses in financial records.

Haverhill’s City Council President and former city attorney Michael Hart said Quorum did not make the city council fully aware of the hospital’s financial problems and the city had no opportunity to correct them.

Similarly Quorum’s interim CFO at, Natchez Regional, Joe Amato recently said the hospital’s 2007 financial statements would be restated and show a loss, not a profit as recently reported.

Amato said the numbers, to be restated, were based on what former CFO Mike Anderson thought would be higher reimbursement rates to the hospital.

Anderson was terminated by Quorum less than two months ago.

Even though Hale won its suit against Quorum, the hospital was still forced to close.

The hospital was sold at a greatly reduced price and the new buyer did not assume the hospital’s $30 million debt.

Siloam Springs Memorial Hospital, in Arkansas, also broke its contract with Quorum citing breach of contract.

Siloam’s current CEO Penny McClain said while Quorum was running the hospital, things seemed fine until a $2 million debt was revealed during a Medicare audit.

McClain said the hospital’s board was unaware the hospital was in financial troubles.

After Quorum was fired, McClain was hired as a consultant and has since been hired as CEO.

She said the hospital now averages a 7 percent profit margin.

At Virginia Regional Medical Center in Minnesota, the city council voted against the hospital board to stop the extension of Quorum’s contract.

Virginia’s mayor and former council member Steve Peterson said under Quorum’s direction VRMC was regularly operating in deficit.

Peterson also said the high cost of hiring Quorum made it too difficult to run the hospital efficiently.

Since parting ways with Quorum the hospital has hired its own administrators and Peterson said the hospital now generates profit or at least breaks even.

But not all the hospitals Quorum works with express dissatisfaction.

Susan Hassell, vice president of marketing and corporate communications for Quorum, said the company currently services 170 hospitals across the country with a nearly 90 percent annual renewal rate.

In the case of Hale Hospital, Hassell said the hospital was “provided with accurate and timely financial reporting in a healthcare market that was on a rapid decline due to market and regulatory changes.”

Hassell said Quorum was not found guilty of wrongdoing in the settlement.

At Siloam Springs, Hassell said irregularities in accounting were discovered before arbitration actually began and terminated the CFO. Before problems arose Quorum had managed the hospital for nearly 20 years.

And in Brookhaven, at Kings Daughter Medical Center, chairman of the hospital board Sherra Smith said the hospital has benefited from Quorum’s management.

Smith said Quorum’s ability to purchase discounted medical products has translated to great financial savings for the hospital.

Quorum has been managing KDMC for over 18 years Smith said.

“In that time we have been very pleased with them,” she said.