The Future of Beaufort County Hospital | Eastern North Carolina Now

    In response to the article in Sunday's (5-30-10) Washington Daily News on the future of the Beaufort County Hospital, (which we found to be well done) the Beaufort Observer asked Hood Richardson to share his thoughts at this point with our readers. Richardson is a County Commissioner and a member of the hospital board. Here is his response:

    "The future of the Beaufort County hospital is of great importance to every citizen of the County. Providing the highest quality of health care at the lowest reasonable prices with the greatest amount of convenience to the citizens of Beaufort County is one of the greatest imperatives Beaufort County faces.

    The hospital is owned by the citizens of Beaufort County. More specifically, the real estate and buildings are owned by the citizens of Beaufort County. The hospital is then leased to a non-profit operating entity that is governed by a Board of Commissioners which is appointed by the Beaufort County Board of County Commissioners. (Yes, there are indeed two "Boards of Commissioners.")

    In recent years the hospital has acquired a number of doctors' practices. And the hospital recently added a new addition to upgrade its surgical facilities. Both of these were designed to enhance operating revenues. But because of changes in the health care industry the amount of money the hospital actually receives for the services it renders from Medicaid, Medicare and insurance companies has declined while a number of costs have increased. This has created a cash flow problem. But the real problem is that there are no cash reserves. The hospital has never tried to accumulate a cash reserve to see it through hard times. We are in hard times.

    A Committee on Cost Containment was appointed by the Board. I chaired that committee which was made up of three board members and an experienced hospital consultant. We held meetings from February through April of 2010 and identified a number of areas that expenditures could be cut for the short term. At the same time the Board hired Health Care Appraisers, Inc. to develop, what amounted to was, a solicitation of bids from various hospital operating companies or organizations who might be interested in leasing, buying and operating the hospital. That firm has now sent out a Request for Proposals to about 30 firms or organizations. Once the recipients of the proposals submit their response Health Care Appraisers will assess the proposals and will advise the Hospital Board on the merits of each offer, including putting a value on the assets the Health System Authority now owns. The idea here is that we will have an expert assessment of the proposals and what the assets are worth before we enter into negotiations to sell or lease to another operating entity or decide whether to continue to operate the system locally.

    As I see it, if the Hospital is going to continue to be managed and operated locally the Board needs to know whether that is fiscally realistic or not. To make that decision we need sound, solid information and data. We know we will have to cut costs. We need to know the point at which cutting costs becomes counter-productive to the long term viability of the operation.

    But if we are going to sell or lease the assets we need to know how much they are worth and the best arrangement to structure the operations that manages those assets, keeping in mind that quality of health care is the dominant criteria.

    There are other options. Some good and some bad. We can make hospital operations efficient. The medical practices are estimated to be loosing four million dollars each year. If we had half of that money the hospital could survive as is, all other things being equal. We can down size. This simply means that some services provided by the hospital would not be available. We could also reduce spending in a variety of ways. But we need to be careful in such cutting and be sure that we make prudent decisions both in terms of fiscal management and in terms of quality of care.

    We all also know the health care industry is in more of a state of flux right now, and will be for the next few years, than it has ever been. We need solid data and information about what those changes mean for Beaufort County, and it is my perception that many of those answers are not currently available although they may begin to become clearer over the next few months.

    At this point the majority of the County Commissioners would prefer for the hospital to continue to be owned and run locally. They are willing to lease the hospital only after being shown there is no reasonable way to save it.

    There is a group of Hospital Board members who are anxious to find an arrangement for someone else to own and run (the lease) the hospital business. Eight doctors have publicly expressed their desire to lease the hospital. More than 30 doctors have not publicly expressed an opinion. There is no doubt that new management and ownership of the hospital business will make changes is operating rules, conditions and employment. It would be unreasonable to expect new owners to keep things as they are and continue to loose money. But we want to be as sure as we can be that those changes will be in the best interest of the people of Beaufort County.

    It seems to me that we don't need a "rush to judgment" before the study is complete and we know what kind of proposals we will have submitted. I would expect that even when the proposals come in that there will be a need to negotiate some of the specifics.

    Why should we rush into a decision?

    If the Hospital can cut costs in the short run and possibly use some of the assets it now owns to leverage more time until we get solid information and a clearer picture of what the trends are going to be in the industry over the next few years then it seems to me that the wisest course of action is for the Hospital Board and the County Commissioners to not leap-frog over a sound planning process and make decisions that we do not now have the information needed to make."

    Beaufort County Commissioner Hood Richardson is a 4 term county commissioner, who is running for higher office: N.C. Senate, 1st District. Visit Commissioner Richardson's website to gain further insight into the man, the candidate.