Hospital’s future focus of dialogue

Published 7:09 pm Thursday, May 27, 2010

Staff Writer

A review Tuesday of Beaufort County’s spending turned into a lengthy discussion over the future of the Beaufort County Medical Center, whose finances have suffered during the recent economic downturn.
Ultimately, the Beaufort County Board of Commissioners rejected a call by one of its members to cut more than $1 million from the $53.5 million 2010-2011 proposed budget recommended by County Manager Paul Spruill.
That action followed sometimes heated debate of a motion by Commissioner Jay McRoy, a former member of the Board of Commissioners of Beaufort Regional Health System, that called for a quick alignment by the medical center, formerly Beaufort County Hospital, with a larger health-care entity.
Other commissioners hoped the hospital would find a way to remain independent and advocated aggressive cost-cutting measures by the hospital as a way to ensure that independence.
The proposed budget discussed by the commissioners includes a property-tax rate of 52 cents per $100 valuation for the 2010-2011 fiscal year. The revenue generated by three cents per $100 valuation of that proposed tax rate would placed in a “Hospital Debt Reserve.” That reserve would be used by the county to make the hospital’s upcoming $1.57 million debt payment if the hospital is unable to do so.
McRoy also called for eliminating the debt reserve from the county budget and, instead, asked the hospital to guarantee by June 18 a loan that would ensure reimbursement to the county if it makes the debt payment.
McRoy said the hospital’s recent financial problems are primarily the result of insurance and government reimbursement practices that favor either larger hospitals or those in poorer, rural areas. This inequity has been exacerbated by the recent economic downturn, McRoy said.
He said that until the hospital aligns with a larger entity, those unfair reimbursement practices will continue.
Commissioner Al Klemm supported McRoy’s motion.
“The recession has caused problems,” McRoy said. “We’re like Main Street trying to compete with Wal-Mart.”
Commissioner Hood Richardson took issue with McRoy and Klemm, saying that alignment by the hospital with another health care entity would not be the panacea that many in the community believe it would be.
Richardson, who serves on the health system’s board, fears the quality of patient care will suffer if management of the local hospital is placed in the hands of an outside management group.
“The people of Beaufort County are going to get better service in the long run from a hospital they own than a hospital that is run from Timbuktu,” Richardson said.
He also fears that other members of the hospital board are rushing to merge without first considering whether the hospital could survive as an independent entity through cost-cutting measures that would help it weather the current recession.
Richardson recently chaired a health-system committee that identified $4 million in cuts at the hospital to be implemented while a search was conducted for possible merger partners.
Those cuts, along with a $3 million loan the hospital board is pursuing, could help the hospital weather the recent economic downturn and remain independent, Richardson said.
“We’ve got a short-term problem,” Richardson said of the hospital. “Basically, we’re short of cash. But through the strict application of good management practices, that $4 million would allow the hospital to remain in business.”
The board turned back McRoy’s motion 4-3, with McRoy, Klemm and Commissioner Robert Cayton voting in favor of it. Richardson, Stan Deatherage, Jerry Langley and Ed Booth voted against it.
Instead, the board approved a motion by Richardson, amended by Klemm, advising the hospital board to “immediately proceed with an aggressive cost-cutting agenda” and produce a two-year hospital management plan.
At the end of the evening, Spruill’s recommended budget remained largely intact after the commissioners, in straw votes, repeatedly turned back proposals from Richardson that would have cut funding for several nonprofit organizations, local economic-development programs, the Beaufort County Sheriff’s Office and Beaufort County Community College.
The commissioners endorsed a proposal that would return to county coffers any savings achieved by BCCC in the installation of a new roof on a campus building dedicated to continuing-education programs.
Without that medical center set-aside, the proposed budget just misses — by eight-tenths of a cent per $100 valuation — Spruill’s targeted revenue-neutral tax rate of 48.2 cents per $100 valuation.
The recommended 2010-2011 budget calls for $612,682 in what Spruill has described as “aggressive cuts” to help offset $916,182 in increased spending and includes only about a third of departmental expansion requests.
It recommends $63,102 for the purchase of three vehicles for the Beaufort County Sheriff’s Office instead of the requested $231,374 for 11 vehicles; $46,584 for maintenance and repairs to public buildings instead of the $201,300 requested; $9,516 for equipment purchases at the jail instead of the $44,027 requested; $6,620 for equipment and other purchases by Animal Control instead of the $27,840 requested and $67,718 for equipment and building maintenance for the Department of Social Services instead of the $120,292 requested.
The recommended budget Includes $13.9 million in funding for the Beaufort County Schools as required by an agreement signed by the commissioners and Beaufort County Board of Education in 2007. It includes $2.1 million in funding for Beaufort County Community College, an increase of 1.4 percent over the current fiscal year.