The Effingham Hospital’s move to a non-profit corporation could happen soon, Hospital Authority Chairman Stephen Mobley said.
Mobley said the hospital’s push to have a non-profit corporate board — made up initially of current hospital authority members — run the day-to-day operations of the 40-year-old hospital soon.
“This is a positive thing for Effingham County,” said hospital Chief Executive Officer Norma Jean Morgan at Tuesday’s first public hearing for the proposal.
The hospital authority law was written back in the 1940s and has not progressed the way health care has progressed. It’s not easy to change it.”
Currently, hospitals operating under the auspices of a hospital authority cannot sell durable medical equipment such as wheelchairs and crutches and cannot operate home health agencies.
“You want to be able to expand your service lines beyond the limitations of the hospital authority law, you want to be able to expand your geographical potential and you want to be able to enter into joint ventures with doctors,” said Joseph Ross, an attorney with Morris, Manning and Martin.
“More importantly, you want to have a hospital, you want to be able to modernize and you want to expand its availability. You want to keep the health care dollars in Effingham County and you want to be able to keep those jobs in Effingham County that can be associated with a vigorous health care environment.”
Ross, a former senior vice president and general counsel for Memorial University Medical Center, said there are drawbacks to restructuring, particular for the Savannah hospitals.
“I guess Memorial and St. Joseph’s/Candler wouldn’t see as many Effingham County patients, but their services would still be needed,” he said.
“Many of us have family members who are alive today because they received care in this facility that saved their lives,” said Dr. Joseph Ratchford. “We’re faced with another decision concerning the future of health care in Effingham County and we’re being called on to make the right decision for our children and our grandchildren. Many would have you believe that Savannah hospitals can provide all the necessary services. They only come with extended waits.”
The set up of the corporate board — initially to be made up of the current hospital authority — drew some questions during Tuesday’s meeting. Over time, Ross said, the hospital authority members will be replaced on the corporate board, with at least one hospital authority member serving at all times. The corporate executive staff will be Morgan, current hospital chief financial officer Ed Brown, James Edwards, the director of quality and patient safety, human resources director Victoria Little, chief nursing officer Elizabeth Tallent and Marie Livingstone, the hospital’s chief legal counsel.
How long it would take to wean the hospital from the county’s millage rate, Ross didn’t know. The hospital can get as many as 7 mills and currently receives 1.975 mills.
Keeping health care dollars in Effingham
Authority members said the move is needed to bring the current hospital in line with modern facilities.
“It’s outdated. It’s 40 years old,” hospital authority member Tommy Exley told the Effingham IDA on Thursday. “We’re in the process of updating the hospital and making it viable for the 21st century.”
Exley said there’s about $60 million in health care in the county, with the bulk being spent at Savannah’s three hospitals.
“We want to attract doctors to perform those operations here,” he said. “You’ve got to make money on those to offset the indigent care and uninsured patients and the underinsured patients.”
Exley said the number of underinsured patients is rising as companies continue to up the co-payments on their coverage plans.
He also said the move would be a boon to the county’s economy.
“If we do what we set out to do, we’ll create another 200 high-paying health care jobs,” he said.
The hospital is trying to obtain the property at the corner of Highways 119 and 21 in Springfield from the county in order to build a new physicians’ center. The current physicians’ center is a mobile home, and it’s hard to lure doctors to that, Exley said. The doctors who move to the center would own a percentage of the building and under the current operating structure of the hospital, that’s not possible.
“Improving our facility will assist in recruiting efforts for primary care and specialty physicians,” Dr. Ratchford said. “Effingham County is a medically under-served community.”
Imaging center led to new vision
What sparked the interest in the non-profit corporation method was the hospital’s building of its imaging center. Hospital leaders learned that, because of their tax status, they couldn’t enter into a partnership for financing with a doctors’ firm for the imaging center, specifically Radiology Associates of Savannah.
The hospital authority made the decision to plunge ahead with the imaging center because time was of the essence, Morgan said — they discovered that if they didn’t do it, somebody else would.
“We have spent a number of years now planning,” Morgan said. “We have reviewed what is the opportunity here in Effingham County. We considered our options — we could do nothing and die on the vine, which is what we were doing under the management of an outside entity. We could do nothing to modernize the facility and stay as we are, improving on equipment but having no real opportunity to recruit physicians.
“Or we could become visionary and have a goal of becoming a best practices community hospital. With that comes the opportunity to recruit more physicians, modernize the physical plant and become a destination for quality health care here at home.”
The hospital authority also is in the process of securing a HUD loan between $25 million and $30 million to renovate the hospital and build a state of the art operating room.
“Ultimately, we hope to be able to develop a business plan to be self-sufficient,” Exley said.
Jimmy Lewis of Hometown Health said Effingham Hospital was “in the catbird seat.”
“When we started the work in respect to Effingham Hospital, it was very close to a closure situation,” he said. “The decision was made locally to retain control of the hospital and to lay out a plan to move forward.
“You’re at the stage now where it’s yours to decide how you carry the operation forward,” Lewis said. “The nature of the population is, if you don’t do it, someone else will. The next time around, if you lose control of the hospital, you won’t get it back. You will be at the mercy of whoever is the acquirer.”