Board exploring hospital’s future

Published 1:17 pm Wednesday, April 28, 2010

Staff Writer

The Board of Commissioners of Beaufort Regional Health System, which includes Beaufort County Hospital, hired a consulting firm to help the health-care provider plan its future operations — a plan that may include affiliation with another hospital system.
Tuesday, the board unanimously voted to approve a contract with HealthCare Appraisers Inc. of Delray Beach, Fla, to explore options, including an arrangement whereby Beaufort County Medical Center would “lease its facilities to another hospital system that would assume future operational responsibilities for the hospital.”
Bill Bedsole, BRHS’ chief executive officer, said in an interview after the board’s vote that affiliation with another hospital is just one of the options the commissioners and the consulting firm will explore as they plan for BRHS’ future in a difficult economy.
One recently published report characterizes the predicament for smaller, rural hospitals as a “fight for survival.” In that report, Mark Pascaris, a vice president and analyst with Moody’s Investor Services, said consolidation is key for many small providers to remain viable.
“I would be the first to say we are struggling,” Bedsole said. “That’s what we’re in right now, a fight for survival, and we have to decide how best to do that.”
The yearlong downturn in the economy has created financial difficulties for the hospital as people in the community delay medical treatments as part of their own cost-cutting measures, reducing the demand for hospital services, he noted.
Despite cost-cutting measures of its own, the medical center has lost about $1 million to date this year, Bedsole said.
In January, the health system’s board began a study of ways it could improve profitability, including the possible affiliation of the local hospital with a larger hospital — a move that is part of a national trend for hospitals of a size similar to the 142-bed Beaufort County Medical Center — and possible additional cost-cutting measures.
“We need to look at where we are and where we need to be to meet the health-care needs of the people in the community,” he said. “We’re not committing to anything.”
A group of 11 doctors at the hospital — including Chief of Staff Thomas Penders and Vice Chief of Staff Rachel McCarter — stopped short of endorsing an affiliation with another institution in a letter dated April 26 and sent to Edwin M. Hardy, chairman of the health system’s commissioners. But they told the commissioners “to maintain the highest standard of care Beaufort County Medical Center will require ongoing investments in infrastructure and staff. … In the current era of decreased reimbursement and increasing regulatory oversight any existing financial issues will likely only be magnified in the future and it is our feeling that a long term solution which allows for continued investment into this institution is in the interests of the patients, staff and community.”
Hospital consolidation was pushed in the early 1990s by managed-care contracts. Today, health-care experts expect that trend to continue as a result of the recent passage of health-care reform legislation.
In North Carolina, UNC Health Care purchased Rex Hospital in 2000 and Chatham Hospital in 2000, while Duke University Health System purchased Raleigh Community hospital in 1998, renaming it Duke Raleigh Hospital. Duke also holds the contract to manage Durham Regional Hospital, while WakeMed Health &Hospitals manages Harnett Health System. University Health Systems of Eastern North Carolina has aligned itself in recent years with a number of hospitals in eastern North Carolina.
HealthCare Appraisers was one of four consulting firms evaluated by the health system’s commissioners to undertake the study, which will be conducted in three phases. In the first phase, HAI will seek hospitals that may be interested in leasing operations at the Beaufort County Medical Center. In the second phase, HAI will help the health system prepare the needed information in order to seek bids. In the third phase HAI will help the commissioners evaluate any bids that are submitted, according to the contract.
The contract includes estimated fees for each phase as follows: $16,000 to $20,000 in hourly fees for the first phase; $22,000 to $30,000 in hourly fees for the second phase and $16 to $24,000 for the third phase.
“We can stop at any phase,” Bedsole said.