Four BRHS suitors remain at the table

Published 6:38 am Saturday, November 20, 2010

Staff Writer

Offers from four potential suitors remain on the table as the Beaufort Regional Health System Board of Commissioners enters the next phase of negotiations over the future of health care in the community, according to the board’s chairwoman.
Brim Healthcare of Brentwood, Tenn., Community Health Systems of Franklin, Tenn., LHP Hospital Group of Plano, Texas, and Greenville-based University Health Systems of Eastern North Carolina have been asked to continue talks with BRHS, board Chairwoman Alice Mills Sadler said in an interview with the Daily News late Thursday afternoon.
The four were asked to respond to questions and counter-offers from the BRHS board within 10 business days, after which time a second round of negotiations will begin, Sadler said.
Her comments came following a closed-door session of the BRHS board Thursday when members were scheduled to hear a report from a negotiating committee on five offers from the four potential partners.
A committee comprised of the BRHS board’s executive committee — Sadler, Vice Chairwoman Brenda Peacock and Secretary Hood Richardson — and board member Suzanne Gray is leading the negotiations. Those negotiations are taking place behind closed doors.
Other BRHS board members had no additional comment about the negotiations following Thursday’s board meeting.
In its initial offer, 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 to 3 percent of net patient revenue, according to the offer.
Community Health Systems initially 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.
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.
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, it would be entitled to full and complete ownership of all leased assets. 
In other business, the board:
• Voted 7-1 with board member Edwin M. “Sandy” Hardy casting the sole dissenting vote, to cut the salaries of those employees making more than $10 an hour by 5 percent beginning with their next paychecks. The pay cut replaces a 5-percent salary deferral enacted by the board in October.
• Voted unanimously to direct BRHS Chief Executive Officer Susan Gerard to begin imposing productivity targets for doctors who have contracts with the health system on the anniversary date of those contracts. While some contracts already include such goals, others do not, the board was told. BRHS has had the option of imposing productivity benchmarks in contracts with doctors but in past years has not done so, according to information presented to the board.
• Voted unanimously to buy a mini C-arm fluoroscopic X-ray machine for $18,000. The equipment is used by orthopedic surgeons in the operating room to help with the treatment of fractures and the placement of artificial joints, according to information presented to the board.
• Voted unanimously to pay $200,000 of an estimated $331,000 contract for the installation of a generator that supplies auxiliary power during peak times. The project saves about $25,000 to $30,000 a month in utility bills, the board was told.
Board member Grace Bonner was absent from the meeting.