OKTIBBEHA COUNTY – The county is moving forward with requesting proposals for the sale of OCH Regional Medical Center to a larger, private health care system.
Supervisors voted unanimously to proceed with the next step in potentially privatizing the county-owned hospital following a more than 90-minute public hearing Thursday evening in a packed chancery courtroom. They authorized Raymond James Financial Services and the Butler Snow law firm to develop the RFP.
“It’s just time to turn the page, I believe,” District 5 Supervisor Joe Williams said during the meeting.
Prior to the vote, Mississippi State University and the Greater Starkville Development Partnership both formally endorsed selling OCH, and two Starkville physicians also voiced support for a sale.
To force a ballot initiative, a petition signed by 1,500 registered voters must be presented to the circuit clerk’s office by 5 p.m. Oct. 10. In 2017, the last time supervisors attempted to offload the hospital, voters overwhelmingly chose to keep it county-owned.
Feasibility study
Jim Birdwell, managing partner for Raymond James, presented the audience highlights from a feasibility study the firm conducted on OCH, which showed a hospital mired in financial uncertainty.
Supervisors commissioned the study in April. When Raymond James presented its findings to the board in late August, it recommended the county sell the hospital.
“OCH is a market leader in Oktibbeha County in terms of health care services,” Birdwell said during Thursday’s public hearing. “But growing competition from other larger acute care providers, urgent care facilities and other outpatient facilities is slowly eroding (its) market share.”
Each year between 2019 and 2023, OCH operated at a negative margin, Birdwell said. In 2024, it operated at a $5.4 million net positive, thanks to a $13 million infusion from a federally-backed supplemental impact payment program pushed by Gov. Tate Reeves in lieu of the state accepting Medicaid expansion.
That program is set to expire June 30, Birdwell said, with no guarantee of renewal.
“If that money goes away, or is even reduced, the expectation would be that OCH would go back to having a negative operating margin,” he said.
Between 2019 and 2023, inpatient admissions at OCH dropped 14.4%, and inpatient operations were down 9.2%, the study said. Outpatient procedures were down 33% over the same period.
“That’s pretty contrary to what the national experience has been for hospitals where outpatient revenues have been going up, especially coming out of COVID,” Birdwell said.
Capital improvements are lagging at OCH, with Birdwell noting the hospital has no strategic plan to address them. OCH recently was approved for a $9.5 million federal grant to deal with some of those concerns, he said.
Birdwell cited OCH’s struggles to recruit staff, particularly specialists, as a barrier for generating revenue. The hospital has the volume to support one cardiologist, for example, but it would need to hire two to avoid the same cardiologist being on call constantly – something he said OCH can’t really afford.
He also offered, as a “cautionary tale,” when OCH hired two orthopedic surgeons. Both were top 10 revenue generators for the hospital before one died unexpectedly and the other one left. OCH has contracted those services since.
The 96-bed hospital uses an average of only 52 beds, according to the study, with part of the first floor and all of the third floor “shelled in,” Birdwell said. OCH once bought land to build an urgent care clinic, he said, but never developed it and later sold it. Now, four urgent cares, all run by competitors, operate in the county.
Birdwell said OCH has 100 days’ worth of accounts receivable, compared to 50 to 60 days at peer facilities, and the Center for Medicare and Medicaid Services rates OCH 2 out of 5 stars for overall quality, which could affect its insurance reimbursements in the future.
“Overall, quality needs to come up,” he said.
That will take significant investment, Birdwell said, which the study finds would best come from a new capital partner.
Proceeds from any sale would have to first pay off the hospital’s $15.6 million debt balance, which the county now services through property tax millage.
‘The status quo is just not an option’
Reading a letter endorsed by a unanimous vote of his board, Partnership Executive Director Mike Tagert said selling OCH to a larger system would ensure the hospital’s continued existence.
“We are very concerned about the future of health care in Starkville and Oktibbeha County,” Tagert told the supervisors. “… We’re here asking you to consider a new way forward. … We don’t want to just survive from a health care standpoint. We want to thrive in our community.”
Likewise, MSU Provost David Shaw said a lack of top-tier health care has become a significant hurdle in recruiting faculty and staff to the university.
“The status quo is just not an option,” Shaw said. “… Selling the hospital to an entity with the necessary resources to provide excellent staffing and cutting-edge technology is not only a good option, it is probably the only viable pathway forward.”
However, Shaw cautioned supervisors to find the right buyer, not just the best price.
“We have seen other communities in Mississippi make that same mistake – selling to the highest bidder only to watch their hospital flipped and the quality of care deteriorate,” he said. “That cannot be our fate.”
Dr. Kristen Fyke, an obstetrician/gynecologist in Starkville,mentioned a nursing shortage at the hospital due partly to the county-owned model not offering competitive wages. Instead, OCH has turned to using more travel nurses, who actually cost more while contributing less to the local economy, she said.
Dr. Emily Landrum, who co-operates a family clinic in Starkville that recently affiliated with North Mississippi Medical Center, more directly pressed for selling OCH.
“Medicine is very complicated,” she said. “The business of medicine is even more complicated, and it’s going to continue to be that way. … I think it’s something a county board of supervisors doesn’t have the expertise to continue to manage and move forward at the pace we need for our town and our citizens.”
‘Don’t forget about the employees’
Some advocated Thursday for keeping OCH county-owned. Most of those either worked for OCH or served on its board.
Audra Gines, the hospital’s public relations and marketing director, raised concerns that privatization could lead to higher patient costs, lower staff wages and reduced care.
Amy Loggins, OCH’s quality director, simply appealed to the board to consider the staff.
“Please, in your quest, don’t forget about the employees,” she said. “All I hear are ‘Dollar signs. Dollar signs. Dollar signs.’ … I’ve put 22 years of my time, my energy, my love and my identity into OCH. … We’re part of the community.”
Board of supervisors president Marvell Howard told her continued health care, not money, is the county’s priority.
Hospital board member David McGee said the public should put aside any fears the hospital would close with privatization. But he challenged supervisors on how selling the hospital would improve physician and staff recruitment.
“Because of the unknown, sometimes people are reluctant to move forward,” Howard responded. “But I don’t think it’s fair, just because we don’t know the future, for us to just hunker down and not do anything.”
OCH wants input in buyer
Reading a letter on behalf of the OCH board, Chairperson Kimberly Brooks simply asked supervisors that hospital leadership have input in developing the RFP and selecting a buyer.
Speaking to The Dispatch after the meeting, OCH CEO Jim Jackson said he isn’t surprised by the county’s reassessment of the hospital, adding that the COVID-19 pandemic caused many of the issues OCH now faces.
He seemed unsure whether a ballot initiative would come forward this time to keep OCH county-owned.
“A lot of thought and effort were put into this process this time,” he said. “I think this issue rests with community leadership to assess its need.”
Zack Plair is the managing editor for The Dispatch.
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