Joint committee exploring affiliation options for the hospital district

Charles Warner Editor

October 3, 2013

UNION COUNTY — The possibility of affiliation with another medical institution to improve the Union Hospital District’s financial condition is being explored by a joint committee formed by the district and Union County.

Since the beginning of the current fiscal year last October the district has lost nearly $6 million, more than sixth of it ($1.1 million) in July. The loss the district experienced in July was due to the results of an audit by Medicare ($300,000), higher than average health insurance claims ($200,000), and increased maintenance costs due to the expiration of warranty on the PACS System in the Radiology Department ($112,000).

Another major factor in the district’s losses was the cost of indigent care which in July alone totaled $850,000, including noncollectable and charity care write-offs.

The district has taken steps to try and turn the situation around including successfully applying to participate in the S.C. Department of Health and Human Services Healthy Outcomes Initiative. The initiative enables participating hospitals to receive funding from the state to cover the cost of indigent care and the district is expected to receive approximately $1 million a year through the program.

In addition to the funds it will receive from the state, participation in the program will also mean increased Medicaid rates for the district, enabling it to further reduce its losses.

The initiative got under way at the beginning of the month which will also see the district receive Meaningful Use reimbursement from Medicare and Medicaid. The district is expected to receive $800,000 from Medicare while the amount from Medicaid is still to be determined.

Another step the district is taking to address its financial condition is the formation of a joint committee with Union County to examine the possibility of affiliating with another medical institution. The committee, which was approved by both the Union Hospital District Board of Trustees and Union County Council, is composed of board members Brent Greer and Lynn Lawson and council members Frank Hart and Kacie Petrie with Supervisor Tommy Sinclair as the ex-oficio member.

“The goal is to go out and explore the feasibility of affiliation, what institution the district should affiliate with, and what an affiliation agreement would look like,” Hart said Wednesday.

Hart, who chairs the county Committee on Public Health and Social Services, said the joint committee will explore whether or not affiliation would help the hospital address the financial and other challenges it is facing.

“As a small, rural hospital the district is under a lot of pressure including Medicare reimbursement levels, physician recruitment and Medicare charge backs,” Hart said. “You really have a benefit from economy of scale and partnering with a larger institution could help you achieve that economy of scale.”

Hart said that if affiliation does prove feasible it could take a variety of forms.

“It can go from a purchase agreement for economies of scale to merger and purchase,” Hart said. “Laurens, for example, turned over operational control of their hospital to Greenville and leased the facility to the Greenville system. Laurens still owns it but is in a long-term agreement with Greenville.”

District CEO Paul Newhouse said the goal of the process it to ensure Wallace Thomson’s continued presence in the community and increase the services it provides.

“We want to create a dialog with other organizations to see what their level of interest is and what options make sense for both parties,” Newhouse said. “We want to make sure the hospital is here a long time in the community and we want to partner with an organization that shares that goal.”

Editor Charles Warner can be reached at 864-427-1234, ext. 14, or by email at cwarner@civitasmedia.com.