Franklin hospital seeks new parent

Published 6:00 am Wednesday, January 21, 2009

Franklin County supervisors agreed Tuesday to lease FranklinCounty Memorial Hospital to a larger hospital or managementcorporation, offering to give up control of the locally operatedfacility for a chance to save it, officials said.

FCMH Administrator and Meadville Mayor Sonny Dickey saidsupervisors decided to send out a request for proposals to seeksuch organizations to take over the hospital. The deadline forproposal submission is Feb. 20.

“It’s open to any entity to make a proposal to the county,” hesaid. “The early phases of this are a very confidential thing,where people that might be presenting a proposal will be doing duediligence over the next 30 days.”

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Dickey said supervisors chose to lease out FCMH because theywere unsure if it would survive much longer on its own. Theembattled hospital has suffered alongside similar rural hospitalsin a bad economy with lower-than-ever patient volumes, complicatedby Medicaid reimbursements that are sometimes untimely.

In June of last year, FCMH was forced to institute a small roundof layoffs and reduce hours for its employees after Medicaidreimbursements were months late, a serious problem for a hospitalthat sees 88 percent Medicaid recipients.

Though Medicaid payments eventually arrived, the economicallyhard summer months of 2008 – the same that began a slide that ledto layoffs for the much larger King’s Daughters Medical Center inBrookhaven – have forced FCMH into a tough spot, Dickey said.

Now, by seeking a lease agreement, FCMH is hoping to move underthe financial protection of a larger hospital or a managementcompany.

Lawrence County Hospital in Monticello went through a similarprocess years ago and now exists as an extension of SouthwestMississippi Regional Medical Center in McComb. Natchez RegionalMedical Center is also seeking a lease agreement.

“It just became very obvious … that we weren’t going to beable to make it long term by ourselves,” he said. “Being a small,rural facility, it’s getting tougher and tougher to make it on yourown. It seems like more and more of the small, rural facilities aretrying to come under somebody else’s umbrella. It makes it moresecure and stable.”

Dickey said any lease agreement made concerning FCMH should notaffect the hospital’s workforce.

KDMC Chief Executive Officer Alvin Hoover, who is employed byQuorum Health Resources – a hospital management company – said theleasing of the small county hospital would bring it an advantage inresources.

“Right now, you’ve got a standalone hospital that is beingmanaged by a CEO who’s on his own,” he said. “Dickey is a realsharp guy, but he’s got a lot of work to do. You bring in ahospital management company and they have additional resources theycan bring in on how they collect money, charge, do billing – lotsof things they can bring to the table.”

Hoover said the downside to a lease for FCMH would be giving upcontrol of the facility. He said there probably six or sevenmanagement companies that would be interested in taking over thehospital’s operations.

“If it works, it’s a real positive. If not, they’re still introuble,” Hoover said.

Hoover added that KDMC would not be among possible organizationsseeking to take over the management of FCMH. Officials at SMRMC inMcComb could not be reached for comment regarding their interest inthe Franklin County facility.

District 92 Rep. Becky Currie, in whose district FCMH exists,said a lease agreement with another company would be a good thingfor the hospital.

“I think it will be an opportunity for them to be able to growand have the financial backing they need in order to do that,” shesaid. “If you have the resources of a bigger hospital, your small,rural hospitals are better off. We want to make sure the people ofFranklin County have access to healthcare.”

Franklin County Board of Supervisors President George Collinscould not be reached for comment.