Whose hospital is it anyway? We begin a series examining its organizational structure | Eastern North Carolina Now

    This is the first in a series of articles on how the health care system is organized in Beaufort County. Specifically, the Beaufort County Medical Center, or Hospital Association, Inc., the Beaufort County Regional Health System or Authority and the affiliates owned or controlled by either of those entities. We look at how these entities relate to the County of Beaufort. In this first article we focus on the "Hospital."

    It has been our experience that when most people, not intimately connected to the health care system in Beaufort County, talk about "the Hospital" they think in terms of a single entity. That is not the case however. The purpose of this series is to attempt to provide a simplified description of the multiple entities of that system.

    The simplest entity to explain is the Board of County Commissioners (BOC). The BOC is elected by the people of Beaufort County and is responsible for appointing the governing boards as described below. The BOC is also the governing body that legally owns "the Hospital." That is the land and buildings on that land are owned by Beaufort County. Moreover, the County carries much of the debt of the health system that has been incurred for facilities. Thus, the taxpayers are ultimately responsible for the Hospital's bond debt. A more detail review of the debt can be extracted from the FY 2009 Audit pages 28-31. As page 31 depicts, the total long-term debt is $18.3 million with significant jumps in debt service payments in 2015-2023. Again, that represents the hook the taxpayers are on. What is also important about all this is that it is the County, through the Board of Commissioners, that will have the ultimate say in what happens with the Hospital.

    But what the above means, looked at another way, is that the taxpayers have an overwhelming interest in the "Hospital." They not only have a tremendous existing investment, but they have a very significant liability interest for years to come.

    Before we go any further the reader should also know that under North Carolina law a Hospital cannot simply "go out of business." Even if the real estate is sold, leased, or otherwise "conveyed" to another party if that party defaults on the performance standards prescribed by the State through the issued "Certificates of Need" (i.e., license) then ultimately the liability to meet those standards (provide the prescribed health care) falls back on the County and thus on the people or taxpayers of the County.

    There are essentially two governing bodies related to what most people consider the Beaufort County Hospital. The core entity is the "Hospital" itself, officially incorporated as the Beaufort County Hospital Association, Inc. ("Hospital"). It operates under a separate set of Hospital By-laws as a 501-c-3 non-profit corporation under N.C.G.S §55A. The simplest way to view it is that "The Hospital" is operated by the "Hospital Association" while the "Hospital" building is owned by the County.

    The Hospital is governed by a "Board of Trustees" appointed by the County Commissioners. The nine trustees are also the same individuals who serve as "commissioners" of the Authority, which will be described in the next article in this series. Interestingly, the Trustees are empowered to "manage" the Hospital although Article IX provides that the President shall serve as the chief executive officer and shall be responsible for the management (Section 9.2) and even "preside at the meetings of the Board whenever possible" notwithstanding that Section 7.2 says "The Chairperson shall preside at all meetings of the Board…"

    With regard to the recent controversy, Section 6.2 provides that Special Meetings of the Board may be called by "The Chairperson, or any three (3) Trustees…"

    The medical staff of the Hospital operates under a separate set of By-laws adopted by the Board, as "recommended" by those with hospital privileges. The medical staff can be viewed as two separate entities: the Hospital employees, some of whom are physicians, and independent or semi-independent physicals who have "hospital privileges." Hospital privileges means that person can admit patients to the Hospital and treat them while there.

    The Medical Staff with privileges is governed by a separate set of By-laws. The most significant provision of those By-laws (as contained in Article XI of the Hospital's By-laws) is that the existing staff has the authority to vote to recommend admitting a physician to hospital privileges. But it is only a recommendation. The Hospital Board of Trustees has the final say in who can practice in the Hospital and under what conditions (Section 11.1). This authority is exercised through The Joint Conference Committee (Section 8.3).

    Note: In a merger or other re-organization one of the issues becomes how the Medical Staff with Privileges shall interface with the governance structure that replaces the existing Board of Trustees. This issue was raised at the July 13 meeting when the Request for Proposals (RFP) was discussed and it was decided that no provision for soliciting how the proposer intends to handle this issue would be included in the RFP. You can hear that discussion in the video in this article.

    In addition, some practitioners have separate contracts with the Hospital. The status of those contracts becomes an issue in a merger.

    Another way of looking at "The Hospital" is to separate the physical plant from the operating system. The County owns the physical plant. That is deemed to be the land, the buildings and anything permanently attached to either land or buildings. The County, through the Board of County Commissioners, leases the land and buildings to the Hospital Association, Inc. which is a non-profit 501-C-3 entity under N.C.G.S §55A of the N. C. General Statutes. The Hospital Association has one member, the Beaufort Regional Health System Authority. It is the Beaufort County Hospital Association, Inc. that operates the hospital that is leased from Beaufort County under a long-term lease.

    Thus, in any reorganization it is presumed that the lease or sale would be negotiated with the prospective lessee but ultimate approval would have to come from the County Commissioners if the hospital physical plant were involved.

    In addition to the "Hospital" there are a number of affiliated entities connected to the health care system. Those affiliates include several doctors' practices. That system is governed by "The Beaufort Regional Health System" (BRHS)Authority. The second in this series will examine the BRHS or "The Authority."

    Delma Blinson writes the "Teacher's Desk" column for our friend in the local publishing business: The Beaufort Observer. His concentration is in the area of his expertise - the education of our youth. He is a former teacher, principal, superintendent and university professor. With his permission, we are more than happy to publish Mr Blinson's most insigtfull articles on the evolving condition of the Beaufort County Medical Center.