BRHS negotiating committee takes shape, CHS rejoins talks

Published 3:23 am Friday, November 5, 2010

Staff writer

=The group that will negotiate the future of Beaufort Regional Health System with its suitors started to take shape Thursday as one potential partner, Community Health Systems, has decided to rejoin the discussion.
Negotiations could begin as early as next week, according to Alice Mills Sadler, chairwoman of the BRHS Board of Commissioners.
A committee comprised of members of the BRHS board’s executive committee — including Sadler, Vice Chairwoman Brenda Peacock and Secretary Hood Richardson — and one board member to be named later by Sadler will serve as the team that will meet with each of four suitors, Sadler said in a statement released by the local health system Thursday.
“This team will keep the full Board closely informed of any and all developments associated with the negotiations and the progress so that the board is fully engaged and involved in the process,” said Sadler in the statement.
On Monday, the Beaufort County Board of Commissioners declined an offer from Sadler to join the negotiations, saying such a committee would violate state statutes.
Meanwhile, Sadler said that CHS is “back in the process and interested in participating in this next phase of negotiations.”
The move by CHS to rejoin the negotiations with BRHS comes just one week after it signaled that it was withdrawing its offer.
The CHS proposal initially before the BRHS board offered a 30-year lease plus two 10-year renewals at fair-market value for a prepaid lease payment of $30 million. The offer included a $25 million capital-expenditure commitment during the first five years of the lease.
Richardson, who also serves on the county Board of Commissioners, told the Washington Daily News the action by the county commissioners helped bring CHS back to the table.
“This gives us somebody to negotiate with that is not interested in buying the hospital,” he said. “I think it’s a good thing for the people of Beaufort County.”
The BRHS board is considering offers from Greenville-based University Health Systems of Eastern Carolina, LHP Hospital Group of Plano, Texas, and Brim Healthcare of Brentwood, Tenn.
University Health Systems made an offer for a 20-year lease/purchase arrangement. It offered a prepaid lease payment of $18.1 million and promised a minimum of $21 million in capital expenditures over the first five years of the lease. The UHS offer also said that at the end of the lease, UHS would be entitled to full and complete ownership of all leased assets.
Brim Healthcare presented an offer for a management-services arrangement for three years plus one two-year renewal. The chief operating and chief financial officers of the local health system would be Brim employees, and the health system would be directed by the local governing board as currently seated. The offer proposed a starting point for discussions of its management fee at 1 percent to 3 percent of net patient revenue, according to the offer.
LHP Hospital Group presented two options — a proposed 30-year lease plus two 10-year renewals at fair market value and a proposed joint venture with LHP investing $24 million in cash and having an 80-percent interest in a new joint venture with BRHS.
In recent weeks, a number of people — most within the local, regional and national medical community — had begun to express concerns about the CHS offer and its operations, particularly in regard to its employees.
One CHS employee traveled from Spokane, Wash., to attend a public hearing on the merger proposals now before the BRHS board and tell board members that CHS would not live up to the promises it had made in its offer.
At that hearing, most speakers told the BRHS board they preferred an alignment with UHS.