Ahead of Tuesday’s public hearing with the health care consulting firm Stroudwater and Associates, District 2 Supervisor Orlando Trainer said new data could emerge in the group’s second presentation on OCH Regional Medical Center’s future, but a firm spokesperson said no such additions are planned.
Yesterday, Trainer said Stroudwater Principal Douglas Johnson mentioned a possible update to his firm’s previous presentation as supervisors approached the Tennessee-based organization about conducting a follow-up meeting with the public. Trainer said he was unsure of the specifics surrounding the possible changes but figures they’ll be added to next week’s public meeting, which is scheduled for 5:30 p.m. at the chancery courthouse.
Johnson, however, on Friday said his organization was not planning on adding new information to its report. OCH Regional Medical Center Chief Executive Officer Richard Hilton also confirmed his organization has not supplied the consulting group with any new data since it worked with the hospital on the report this summer and fall.
In October, Stroudwater recommended supervisors “explore transactions as soon as practical” while the county-owned hospital continues to improve its sustainability in case a sale or lease option isn’t immediately available.
OCH leadership and staff have publicly opposed a sale or lease to a private entity.
The county will pay Stroudwater $8,500 for professional services, plus travel and out-of-pocket expenses, for its participation in Tuesday’s public hearing. The original OCH study contract with Stroudwater called for professional fees between $45,000 and $50,000 for its services, and the group could be utilized in the future if the board pursues a sale or lease of the hospital.
District 3 Supervisor Marvell Howard previously cast the lone vote against contracting Stroudwater to conduct a second public hearing. Supervisors have taken no further action on the report since it was presented, except for scheduling that meeting, which will feature a refresher presentation from the firm and a question-and-answer session for the board and general public.
At Howard’s request, the board agreed to allow OCH to make its own 10-minute presentation and field questions from attendees.
“This is an extremely important decision, so I think you need to allow another angle on it … rather than information from one direction. That goes a long way for transparency,” he said. “I think we owe that to hospital personnel, hospital supporters or whomever — to present both sides and information from both directions.”
Hilton said he had yet to receive a formal notice from the board about the presentation opportunity but added he would begin crafting the hospital’s message today.
“The hospital welcomes the opportunity to be able to tell its story. I’m not opposed to answering any questions at any time, whether in a formal meeting or outside of one,” he said.
Due diligence
Trainer asked supervisors if they would be ready to move forward with the hospital issue, but supervisors did not say if they would be ready to settle the matter. Stroudwater previously recommended seeking requests for transaction proposals from interested groups.
“In times like these, where you could be dealing with major transactions or other undertakings, I don’t think we can spend enough to have the proper due diligence done, and that’s whether we take action or not. You get what you pay for,” he said. “This is an investment we needed to make, and this public hearing will help get more answers to the public. Both sides will be at the table and able to answer and expound on any information that’s presented.”
Stroudwater’s report stated a lack of service scale, weak market positioning and margins, outmigration and quality scores versus cost position are all “compromising OCH’s future trajectory,” but investments in satellite clinics and systems needed for new payment models, operational improvement and the development of aligned clinical services in specialty areas could mitigate risks associated with the hospital’s long-term viability.
The firm estimated bids for the hospital could draw offers between $20 million and $60 million, but the revenue generated from such a deal by law must first be applied to OCH’s $24.8 million in outstanding debt obligations.
A petition signed by 1,500 qualified Oktibbeha County voters could block a board-approved deal and send the issue to the ballot box at a later date.
Editor’s note: Friday’s update adds input from Stroudwater principal Douglas Johnson, who was unavailable for comment Thursday.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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