Carson-Tahoe a private hospital?
Nevada could lose one of its last, and most profitable, public hospitals today.
Carson City supervisors will decide this evening whether to allow county-owned Carson-Tahoe Hospital to become a private hospital.
While most issues regarding the transfer appear to be waiting for the rubber stamp, one outstanding issue – long-term indigent care – remains a potential roadblock to a haggle-free transfer.
However, hospital officials released a new proposal Wednesday for providing indigent care which is “fair to both organizations,” hospital Administrator Ed Epperson said.
City and hospital officials worked out an agreement by which the hospital would repay its $60 million price tag over 25 years instead of 35. After 25 years, the hospital would provide indigent care into perpetuity “as long as we make a modest bottom line, which we define as 6 percent of our operating margin,” Epperson said.
The proposal has not been reviewed by either the Board of Supervisors or hospital Board of Trustees.
Mayor Ray Masayko said his focus will continue to be indigent care.
“I certainly expect us to get closer together to solve the outstanding issue,” Masayko said. “There is some room for further discussion. Nobody wants to make the situation untenable to the other party. Parties who want to agree can arrive at common ground. I think we’re parties who want to agree.”
Counties are required to provide medical care for those who can’t pay. As an arm of the county, the hospital has adsorbed those costs – estimated around $1 million – without billing the city. Supervisors have been adamant, since hospital officials first proposed the transfer in April, that Carson residents should be protected as much as possible from a future, unfunded indigent care bill.
Hospital officials first offered to purchase the hospital from the city for $53 million. Less debt and liabilities, hospital officials offered $20 million of indigent care for 15 years, numbers which drew frowns from city leaders.
Appraisals over the last few months put the hospital’s worth at $85 million, $60 million minus debt and other liabilities. The new, private hospital had planned to repay the city the cost of the hospital by providing that indigent care for about 35 years. Masayko recently asked that indigent care be provided into perpetuity.
Hospital trustees and administrators worry that requirement could doom the transfer to failure as potential investors would shy away from an investment holding an indefinite liability.
Epperson said because the new proposal puts profit as a trigger, it shouldn’t make investors shy away from investing in the hospital.
“This makes it definable that if we make a modest bottom line, we should and will take care of indigent care costs,” he said. “This says to our creditors we will make a modest bottom line and as long as we do, we’re doing OK, and therefore we can afford to pay for indigent care.”
Just over a year ago, officials entertained offers of affiliating with or selling out to a larger health care system. Earlier this year, hospital trustees opted instead to become a private, nonprofit entity, which they argue will allow the 52-year-old hospital to retain local control of health care and remain a profitable company in an unstable health care market hospital.
Carson-Tahoe Hospital transfer time line:
1998: Carson-Tahoe Hospital trustees decline to sign an affiliation letter of intent with Washoe Health Systems and Lake Tahoe-based Barton Memorial Hospital.
1999: Hospital resumes affiliation talks with Washoe and Barton, but those discussions, too, fall through.
April 2000: Hospital trustees decide to find a partner, looking nationally instead of locally.
May 2000: Hospital sends requests for proposals to 13 regional health care providers.
July 2000: Triad, Universal Health Systems and Sutter are chosen as potential affiliates.
October 2000: Triad offers to buy 80 percent of Carson-Tahoe. Sutter proposes a merger. Universal Health offers $105 million outright purchase of hospital.
November 2000: Hospital trustees cut Triad from consideration and mull staying status quo or becoming a private, non-profit hospital similar to Washoe Health.
January 2001: Universal and Sutter both pitch a new hospital in affiliation presentations.
March 2001: Hospital trustees vote to become a private, non-profit hospital
April 2001: Trustees first present Carson City supervisors with proposal, setting a September deadline for final transfer.
May 2001: City supervisors agree to let the hospital become a private corporation. City and hospital officials sponsor legislation to change Nevada law to help transfer.
June 2001: Final city decision postponed pending negotiations on several fronts.
July 2001: Final city decision of the transfer expected today.
IF YOU GO
What: Carson-Tahoe Hospital Board of Trustees meeting
When: 5 p.m. today
What: joint meeting of the Carson City Board of Supervisors and the Carson-Tahoe Hospital Board of Trustees
When: 6 p.m., today
Where: Both meetings are in the Community Center’s Sierra Room, 851 E. William St.