The OCH Regional Medical Center Board of Trustees has come out unanimously against selling or leasing the hospital following a board meeting earlier this week.
Trustees voted to keep OCH a county-owned facility, and the move comes as the Oktibbeha County Board of Supervisors mulls future options for the hospital. The vote was in direct response to supervisors hiring an outside consulting firm to assess the potential sale, lease or affiliation of the hospital. In October, the report issued by Tennessee-based consulting firm Stroudwater, suggested county supervisors to field sale and lease proposals for OCH.
On Nov. 8, the county approved hosting a public hearing regarding the report at 5:30 p.m., Dec. 6. After the public hearing, supervisors could take action to pursue the sale, lease or partnership further by issuing a motion of intent for requesting proposals.
Hospital trustees are appointed by the county, and the seven member board represents each supervisor's respective district, with two members appointed at-large. Trustees serve five-year terms.
"The support of our hospital's board members speaks of the importance in maintaing the hospital's local ownership," said OCH Chief Executive Officer Richard Hilton following the trustee's vote. "OCH continually works to advance healthcare services in our community, as well as having a good financial performance."
Trustees issued a news release Wednesday stating the board would continue to support the medical staff's efforts to oppose the sale or lease of OCH. Over half of the hospital's medical staff recently signed a letter against the sale or lease of the hospital, and physicians asked the board to halt the assessment process.
"The Medical Staff believes that ownership by a private corporate entity may lead to a tendency toward less flexibility and independence of medical practice, profit-driven reductions in services and employment, and even a reduction in access to healthcare services for those lacking adequate insurance coverage," the resolution said.
"The OCH Board of Trustees and Administration have done an extraordinary job of carrying the hospital through the needed changes over the years," said OCH Chief of Staff Harry Holliday in an issued statement. "Our leadership is in tune with the needs of our community and continues to stay abreast of the changing climate in the field of medicine. A sale or lease of the hospital would be a huge setback for the healthcare community, and could result in a loss of jobs and services."
The report said supervisors should ask OCH to make systemic improvements to give the hospital a competitive edge in the proposal process. The report also recommends the county not pursue service-line agreements or joint operating agreements, since both could hurt the hospital's future potential.
The competitive process would ensure all options were explored, while finding "a successful lessee or acquirer that is best equipped to meet OCH's and the community's needs," the report added.
Comparable transactions place the sale or lease of the hospital around $583,929 per bed, with OCH being a 98-bed facility, totaling just over $60 million for a hypothetical agreement. In 2013, Capella Healthcare approached a previous board with an offer to discuss a 50-year lease proposal for OCH—but no action was taken.
One major strength of OCH was its adequate cash flow to service existing debt—around $13 million—on a stand alone basis, but a gap averaging $3 million holds the facility back from making "needed investments in equipment, technology and physician staff development," according to the report. OCH has an operating revenue of approximately $72 million, according to hospital budget figures.
Following the October presentation, Hilton said he felt the report misrepresented the hospital's debt service obligation ratios. The hospital leader questioned the report's findings related to bed occupancy, and said the report omitted numbers of overnight stays from ambulatory procedures, or individuals that had not met discharge requirements. The report also left out infusion services in regards to bed occupancy, he added.
OCH's inpatient admissions are declining more rapidly than the national average—creating operating and financial risk for the hospital. To offset decline, OCH should expand swing bed programs and hospice care, according to the report.
Other challenges facing the hospital include the loss of individuals to larger systems in Columbus and Tupelo, while noting the hospital's surgical volumes are on a slow, downward trend. OCH has lost a significant market share from its primary service area from the two neighboring hospitals, coupled with the lack of satellite clinics.
The hospital has made significant investment to its acute care campus, built on a "loyal and committed medical staff," the report noted. Starkville's continued growth is another asset for the primary service are of the hospital, the report added. Patient care rounded out the positives in the report, with the hospital receiving a 3 out of 5 rating average.
To view the report ahead of the public hearing, visit oktibbehacountyms.org/?q=node/694.