Consider the motivations on hospital sale

Published 12:00 am Sunday, February 7, 2010

Last week Adams County voters found out the Board of Supervisors is allegedly entertaining interest on the possible sale of county-owned Natchez Regional Medical Center.

Of course, such negotiations are rarely discussed openly.

The actual owners of the hospital — the citizens of Adams County — have to sit and wait for supervisors to explain their plans.

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But as any good owner would do, citizens would be wise to consider all the possible angles on such a potential deal.

Proponents of selling the hospital point to the benefit of quickly freeing taxpayers from potentially being on the hook if the hospital fails.

That’s a legitimate concern.

If the hospital ever defaults on its debts, taxpayers are liable. Of course, so far at least, the hospital has never missed a bond payment.

Further, an interesting and often overlooked fact is that since the building was constructed more than 50 years ago, taxpayers have not provided funding to the hospital.

Currently, the debt burden is roughly $1,000 per voter/owner.

Opponents to selling say doing so would likely result in significant job losses, especially if the buyer were Health Management Associates, the parent company of the cross-town rival Natchez Community Hospital.

The idea would be that a consolidation of the two hospitals would necessitate far less staff that the two facilities employ separately.

A severe round of layoffs, the logical outcome of a merger, would probably cause a massive economic loss for the community.

Just guessing at the average salary and a wild guess at the number of jobs that could be cut gives a rough idea of that impact. At $50,000 a year and 100 positions cut that’s $5 million a year pulled out of the community’s economy. Those numbers are just hypothetical and may be far off base, but they put the impact in some perspective.

The county, at least, would gain some back by the facility rolling back onto the property tax rolls.

The real key to the viability of the whole decision on selling or not comes down to common sense and an understanding of each side’s motivation.

Each county citizen/hospital owner needs to consider a few questions.

First, why would the county sell the hospital?

From the supervisors’ perspective, a sale could result in something many of them can’t get enough of — cash.

The county’s accounting mismanagement over the last couple of years that led to a reduced bond rating has significantly curtailed the county’s ability to borrow money and get things done.

In particular the things a couple of supervisor seek to get done require big bucks.

Reportedly one supervisor is hell-bent on paving roads in his district prior to the next election. The bond-rating drop thwarted his attempts last year and each day that passes is a day closer to the election and a day for his political opponents to get organized.

Others seek an easy way to fund the recreation complex mandate. For them, the sale of the hospital looks like a quick route to cash, too.

The second question hospital owners should consider is: Why would another hospital want to buy it, particularly if that hospital is Natchez Community’s parent company?

Business deals are rarely based on charity. They are rooted in the belief that the deal will result in more money being made.

Thus if an offer of say $25 million is tossed out, then that means the buyer believes the investment can quickly be recouped.

The most important question, however, ultimately is: Which option is the best option to improve affordable health care in our community?

Kevin Cooper is publisher of The Democrat. He can be reached at 601-445-3539.