Negotiations with hospital suitors getting underway

Published 4:47 am Thursday, November 11, 2010

Staff Writer

Negotiations between members of the Beaufort Regional Health System Board of Commissioners and its four potential suitors are in progress, it was announced Wednesday.
A BRHS negotiating committee met Tuesday with representatives of Greenville-based University Health Systems of Eastern North Carolina to discuss the UHS offer, according to Pam Shadle, director of marketing and public relations for BRHS.
The committee is scheduled to meet Tuesday with Community Health Systems of Franklin, Tenn., and Wednesday with LHP Hospital Group of Plano, Texas, Shadle said.
A meeting with Brim Healthcare of Brentwood, Tenn., is being planned, but it has not yet been scheduled, she said.
A four-member committee comprised of the BRHS board’s executive committee — Chairwoman Alice Mills Sadler, Vice Chairwoman Brenda Peacock, Secretary Hood Richardson — and board member Suzanne Gray is leading the negotiations.
The negotiations are taking place behind closed doors.
Richardson, in an interview with the Washington Daily News on Tuesday, said “generally we were pleased with the process.”
Richardson said he does not know when the committee might make its recommendation to the BRHS board.
“There are still a lot of things to talk about,” he said.
In its response to the BRHS request for proposals, University Health Systems offered 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.
Community Health Systems, which returned to the negotiations last week, offered a 30-year least 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.
Brim Healthcare offered 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 30-year lease plus two 10-year renewals at fair-market value and a joint venture with LHP investing $24 million in cash and having an 80-percent interest in a new joint venture with BRHS.