October 28, 2016 9:55:29 AM
Oktibbeha County Hospital's future is yet again the subject of community discourse. This is a seminal aspect of our identity and the surrounding discussion and ultimate decision is one of the most critical we will have from the Board of Supervisors in the foreseeable future.
We have a new board and new possibilities but this needs to be the final time in the near term this issue again becomes a public football.
The best way for closure is for the supervisors to throw it to the residents for a vote. Unlike a bond election requiring 60% approval to pass, this is a straight up democratic, majority vote decision.
As the supervisors contemplate options for the hospital they carry with them Starkville and MSU. It is no small decision. It is no simple decision.
Complex issues go well beyond the 48 pages in the consultant's report. I don't know there to be enough information at this point to move beyond just getting more information.
I have always believed initiating a status report was the proper and prudent thing to do. In fact, it ought to be something that is done every 10 years or so by the county in conjunction with the hospital board and the hospital administration. In fact, it ought to be an even more frequent internal review by the appointed hospital board and hospital administration.
It is a strategic planning tool. Perhaps had we been doing that all along we might have been on the front end of the healthcare curve instead of the back end.
This report seems slanted in the direction of a sale or lease but still provides data that deserves consideration. The consultants identified strengths and challenges for OCH as it currently operates.
What is the rest of the story?
The consultants are estimating the hospital is worth between $20 million and $60 million. There is about $38 million in debt pending. Depending on the sale price that could mean the hospital is worth about the amount of debt it carries.
What about the bonds that are outstanding? Can we just pay them off with the proceeds? Nope. Investors have been promised interest on those bonds for a guaranteed time. We can't "call" those bonds until a set date out in the future. What is that date and what does that mean to a sale price?
Who knew there were such things as doctor incentive commitments? Think of them as a signing bonus for an NFL football player. The hospital has those commitments. Maybe they can be modified, maybe not. Something else we don't know. Somebody should have that answer.
In the meantime we are obligated to pay the interest. There is also a possible premium to be paid when you pay them off early. The report doesn't address that.
What about the suggestion of reducing operating costs? About 60% of that is people. What is that trickle-down effect?
I am guessing that some of the supervisors have cash sugar plum fairies dancing around in their heads. They envision the same kind of deal Lowndes County got and it just isn't going to happen. That was a deal for the ages.
They see newly blacktopped roads and a new embankment for the county lake without a tax increase. They see the Oktoc Road mess fixed.
Having the land along Hospital Road back on the tax rolls would be a definite boon to city coffers. A reasonable guess is about $130,000 a year. It isn't chump change, but it isn't large enough to make it the tipping point for such a major community shift. It also isn't a guarantee because that only happens if they sell to a for-profit hospital group.
What do we do with this information? What information is missing? Where is the response of the hospital administration to these findings? All of this data needs to be put out there through public meetings with knowledgeable officials on hand to educate the community as to what it means.
The county's auditors and bond experts and hospital administrators and consultants should be in attendance to provide the rest of the story.
We have to determine if we want the hospital to be more of a community hospital or a place to make you well? Are the doctors part of our community fabric or are they more an interchangeable service provider? Do we believe we can be relevant to our needs as an independent or do we risk the market forces in a network health care industry?
This should be more than a financial decision. This is a community decision and should be part of a longer and more detailed public discussion. Educate yourselves and us and then step back and let the county vote.
Lynn Spruill, a former commercial airline pilot, elected official and city administrator owns and manages Spruill Property Management in Starkville. Her email address is [email protected]
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