Monday, August 2, 2010

Savannah Doctors to Buy Screven County Hospital?

The Sylvania Telephone reports in a move that some people are characterizing as the only reasonable way to keep a hospital open in Screven County, county commissioners and the hospital authority appear poised to sell the hospital to a group of doctors based in Savannah.
The new owners would invest in improvements to the 59-year-old building and its technology and would bring in additional doctors and services, said David Boddiford, chairman of the hospital authority.

George St. George, who has been chief executive officer of the hospital for 13 years, said the hospital authority has been looking at ways to keep the hospital going for several years and this may be the only viable option.

The transaction would call for all 105 hospital employees, including 77 full-time workers, to be retained at the same salary and similar benefits, St. George said.

“Without a transaction, it is very questionable whether we could have continued operation of the hospital for more than two to three more years,” St. George said. “Continuing the way we’ve been operating, we’d have to go out of business. We need to find a partner. We need to find someone to operate the hospital.
”We think it has a tremendous amount of potential benefit for the community,” St. George said.

Boddiford said the hospital authority is glad the doctors, who operate Southeastern Orthopedic Center in Savannah, are interested in the Screven facility. No other investors have expressed an interest in buying the hospital.

“I don’t know of anything else we can do that we haven’t done,” he said.
The new owners have a better chance of making a profit from the Screven hospital than the hospital authority because they will be better able to attract physicians to the area, county commissioners said. The goal would be to attract as patients Screven County residents who currently are leaving the county for medical services, as well as patients from other, nearby counties.

Proponents of the transaction listed a number of benefits, including: at least doubling the number of physicians based here; adding more services to patients; keeping current employees; adding new employees; the county getting rid of $1.2 million in current and long-term debt; making renovations to the 1959 structure and improvements to aging technology; putting the hospital back on the tax rolls, to the tune of about $35,000 a year; saving more than $300,000 in SPLOST money that had been earmarked for hospital improvements; and collecting sales taxes from the hospital.

Keeping a hospital in the community is vital to attracting new industry, said Boddiford, who also is vice chairman of the Industrial Development Authority.
The same group of about 40 doctors bought the Tattnall County hospital in December 2008 and is in the process of buying the hospital in Jenkins County.
Details such as the price the doctors would pay were still being worked out, said St. George. The hospital authority was expected to decide whether to go through with the sale at its meeting at 7 p.m. tonight.

As part of the deal, the county commission is being asked to spend $600,000 a year for 10 years to help pay for indigent care. In recent years, the county has contributed the following amounts to the hospital for indigent care: 2007, $700,000; 2008, $800,000; 2009, $720,000; and 2010, $600,000.

County Commissioner Gregg Ellison said the estimated cost to the county for indigent care next year, if the sale doesn’t go through, would be $800,000 to $900,000.
“Over the past several years, we’ve seen tremendous growth in the dollar level of free care that the hospital has provided,” St. George said. “The county subsidy through ad valorem taxes has been extremely generous, but it is not sufficient to offset the growth of free care.”

St. George said the $600,000 a year for 10 years would only cover about half the cost of indigent care during that time period.
County commissioners held a special meeting Monday and, with Dennis Lawton absent, unanimously agreed to the $600,000 a year for 10 years, with the caveat that the action must be something they can legally do. By Tuesday, the commission had learned that the move would not be legal because they cannot commit future commission members to such an agreement.

County Manager Rick Jordan said lawyers were considering other ways to achieve the same results -- $600,000 a year for 10 years – that would be legal. He said another special meeting to discuss the issue likely would be scheduled soon, possibly as early as next week.
St. George said the timing of the transaction is fortuitous for him since he wants to retire soon anyway. He said he would stay on through the transition and then retire. “It’s a good time to leave and clear the way for a new ownership person,” he said.

The hospital’s two doctors also would remain and at least two more likely would be recruited, Boddiford said. Just what specialty the Screven hospital might emphasize has not been announced, but the hospital may try to attract a gastroenterologist, urologist, cardiologist or ear, nose and throat physician, St. George said.
The transaction has been in the works for three months. If it goes through, it would be completed before the end of this year. Since the hospital is a public asset, the state attorney general’s office would review the proposed sale and would hold a public hearing about it, to make sure it’s in the community’s best interest. The hospital authority also would hold a public hearing.

Tattnall County has been very happy with improvements at the hospital, now called Doctors Hospital, since the new owners took over, said Tattnall County Manager Faye Hussey.
The sale has been “absolutely wonderful” for the community, she said. The hospital had closed briefly and gone through previous private owners who weren’t able to make money. The new owners “have upgraded the hospital extensively,” she said. “They’re doing major surgeries daily.”

Southeastern Orthopedic Center includes Sylvania native Dr. Don Aaron Jr. The CEO of that group is Michael Kleinpeter.

If the new owners decide down the road that the deal isn’t as beneficial as they’d hoped and they decide to close the hospital, the county would have the option of stepping back in and taking over. Boddiford said he thinks the deal would be a good one for the county’s residents, but he won’t know for sure until about 10 years pass.
Commission Chairman Will Boyd said the transaction seems like the best option. “I feel like we need to keep a hospital and this is the cheapest way we can,” he said. “I’m optimistic that we’ll have a better facility than we have now for the same money and a lot more services offered. … It’ll be five years before we know if we made the right decision.”

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