‘Verbal agreement’ could save North Metro
By Peg Kenyon / Editor / pkenyon@jacksonvillepatriot.com
Wednesday, December 31, 2008 11:04 AM CST
Mayor Tommy Swaim has told city aldermen that the city has reached a “verbal agreement” with a management group to try to resolve the financial crisis facing North Metro Medical Center.
Swaim gave aldermen a quick update about the progress in the negotiations to save the hospital. The city owns the property and leases it to private management groups.
“We have come to a verbal agreement,” Swaim said at the Dec. 18 City Council meeting. “The agreement is solid but it is not a done deal.”
Swaim, who serves as chairman of North Metro’s board, and other board members are seeking a lease pact with Allegiance Health Management Inc. that would include an option to buy North Metro.
The medical center employs approximately 450 workers and has an annual payroll of $18 million.
Only one doctor is included among the 450 hospital workers, Swaim said. Numerous other physicians work on an independent basis within North Metro.
Two other hospitals — St. Vincent’s North in Sherwood and Baptist Health in North Little Rock at Springhill — are six or eight miles away, Swaim said.
He deems North Metro a “very vital” part of the community but says the hospital must undergo a change to become viable in increasing its net profits in the future.
North Metro operates as a nonprofit organization with a hospital board, but its board members previously entered into a lease with Quorum Health Resources to be in charge of operating the medical facility. The hospital opted to become a nonprofit entity in the 1990s, Swaim said.
Swaim says “There’s no money mixing,” between the city and the hospital, he says. “It has always been a stand-alone operation and there was never any intent of it being an operation of the city.”
Swaim also indicated the city merely owns the real estate — the land and its structure. The city of Jacksonville’s budget has neither received hospital revenue nor expended any cash to bolster North Metro’s financial slump due to its losses over the past four years.
North Metro’s last experience of a net profit took place in the fiscal year ending on June 30, 2004. North Metro rang up a $652,000 net profit, according to Swaim, but he also reiterated that the hospital is a not-for-profit entity, which means it does not seek profit, as private hospitals must. However, a net-project deficiency trend began in the fiscal year of 2005 with a minus $98,000 figure. Between the fiscal years of 2006 and 2007, it jumped from a minus $804,000 figure to approximately minus $3 million figure. A glimmer of hope did surface when the hospital experienced about a $2.3 million loss in the 2008 fiscal year for the hospital. Swaim provided those net profit/losses. Swaim also added that the hospital started to recover in the 2008 fiscal year.
Further details about the negotiations could not be released because of a letter of intent with Allegiance, according to Swaim.
At the Dec. 4 City Council meeting, Swaim advised aldermen that the hospital’s loss last month was about $450,000 and that it could only operate another six months experiencing this type of loss.
Asked if a state legislative audit had recently been conducted, Swaim replied that since a health management group runs the hospital’s operation, it is not subjected to this type of government audit. Swaim also says that the hospital is audited each year but copies of those audits cannot be released through the Freedom of Information Act.
Reasons behind those financial losses included the increasing number of charity cases, Medicare changes during the past several years and patients not paying their hospital bills, according to Swaim.
In January, a name change took place at hospital, which is now called North Metro Medical Center. For about 50 years, the city’s hospital was known as Rebsamen Medical Center.
However, this wasn’t the only the change at Jacksonville’s only hospital as officials mapped out a new plan earlier this year. According to the hospital’s Web site, the new name signal a “reinvention” for the medical facility.
For the past two years, the hospital has presented 50 workshops and monthly department goal meetings. The basis of the improvements began with a new outlook in providing better customer service.
Other changes included numerous facility improvements, which involved renovation of the public waiting area, and adding a new mammography suite as well as a physicians’ lounge. The hospital also obtained a 40-slice CT Scanner and a Philips Ultrasound.
North Metro also previously planned a labor and delivery suite in January. Later in the year, however, the hospital terminated birthing services. At the Dec. 4 meeting, Mike Wilson, who serves on the hospital board spoke of his hopes in the maintenance of existing services as well as reinstating “OB/GYN” services.
Wilson is also determined to provide a “walk-in clinic” for future North Metro patients. Swaim explained that it would be an “after-hours” clinic for nonemergencies. The walk-in clinic could alleviate crowds forming at North Metro’s emergency room, Swaim added.
