Regional is taxpayers’ hospital
Published 12:16 am Sunday, April 6, 2008
Someone asked me last week why the newspaper is supporting Natchez Regional Medical Center so much.
The person had ties to Natchez Community Hospital, the privately owned, for-profit hospital that competes with the publicly owned, financially drowning Natchez Regional.
Last week, this newspaper mentioned in an editorial that if residents were worried about the troubled Natchez Regional Medical Center that they should utilize the hospital’s services.
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On the surface, the man’s question is on point. We’d never take an editorial stance suggesting where someone should buy a car or truck.
Nor would we ever encourage a person to use a particular wireless phone provider.
Some of us have been critical or supportive of businesses in the past, but only in personal columns, rarely if ever in the “Our Opinion” section.
With Natchez Regional, however, the issue is a little different.
I gave the man a relatively short-answer: patient care and massive taxpayer money.
But understanding those takes some explaining.
Patient care is simple. Natchez Regional’s beds are needed in the area, and we must not let them just go away overnight.
The taxpayer connection is much more complicated. The owners of the hospital are the people of Adams County, not out-of-town investors.
And, since what taxpayers own is losing money, their investment is pretty much floundering.
The question becomes: How do we protect that investment and not let the hospital drag the county into the poor house?
Hospital administrators are working to file bankruptcy as a means of staving off creditors temporarily until a long-term financial plan is completed.
Much of the hospital’s long-term debt is in the form of a large bond debt, refinanced in 2006, valued at approximately $18 million.
Other debt, estimated to be in the $7 million range, includes everything from vendor bills to lines of credit at banks.
Taxpayers are on the hook to pay the $18 million in debt in two key ways. First, the bond agreement, created when the bond debt was refinanced in 2006, provides that the county must add 5 mils of ad valorem tax — that’s property tax, houses, land, cars, etc.
In addition, the agreement allows the homestead exemption money the state returns to the county to be tapped, too, if needed.
If required, the county could be forced to give up as much as $1.2 million a year to pay for the bond debt.
That’s a huge obligation.
While it may seem correct to use the home-spun logic of: “If it’s losing money, just shut it down,” it’s not really that simple.
A closed hospital generates absolutely no cash unless the facilities are sold.
And a business that’s closed or one that’s struggling under great debt likely will not generate a great purchase offer. Trying to sell a closed business also saddled with heavy debt won’t be pretty.
An operating business — even a floundering one — is easier sold than one that has completely shut down.
For the best interest of the taxpayers, Regional either needs to stay open and become better managed so that it can pay its own debt or stay open long enough to find a buyer who will pay more than the hospital owes.
So we’re not really supporting Natchez Regional — at least in the hospital warfare sense — but rather, we’re looking out for the taxpayers of Adams County.
Taxpayers don’t need to pay for someone else’s mismanagement.
Kevin Cooper is publisher of The Natchez Democrat. He can be reached at 601-445-3539 or firstname.lastname@example.org.