McRoy talks BRHS

Published 12:45 am Saturday, March 26, 2011

Says UHS could soon take reins at BCMC

CHOCOWINITY – Beaufort Regional Health System could cede control over its hospital and medical practices to a neighboring health-care entity by the end of April, a county commissioner said Thursday.

And BRHS operating losses aren’t likely to deter Greenville-based University Health Systems of Eastern Carolina from pursuing a 30-year lease/purchase agreement with the local health system, said Beaufort County Commissioner Jay McRoy.

Jay McRoy

“I think they have made too many plans,” McRoy told more than 30 guests and members of the Down East Republicans on Thursday night at a restaurant in Chocowinity.

“They’re not planning to just walk away from it,” McRoy advised the audience gathered for the club’s monthly meeting.

The commissioner said he hopes all the necessary lease documents will be signed off on by the BRHS Board of Commissioners and the county commissioners before the next month’s end.

“Technically, UHS will be leasing the hospital from the hospital authority, but we have final approval because it is county-owned property,” McRoy observed. “But the negotiations are with, pretty much, the hospital board.”

The BRHS board meets Tuesday, and the county commissioners’ next regular meeting is scheduled for April 4, McRoy pointed out.

“My anticipation is that there will be some documents at that time (April 4) that we hope to approve,” McRoy stated.

He added that UHS “could be in control before April is out.”

McRoy referred to an audit of the BRHS books for fiscal year 2009-2010.

The audit revealed concerns about BRHS accounting practices, and showed the health system suffered a loss of $11.2 million in 2009-2010.

“The part that bothers us about that – I mean, we can’t do anything about what the loss was, but UHS is doing their due diligence at this time,” McRoy continued. “I think they’ve probably about finished their due diligence. And, are they going to try to adjust their offer now?”

The commissioners don’t know the answer to that question yet, McRoy said.

He aired fears the BRHS losses could lead UHS to lower its offer to lease the Washington-based health system.

UHS has offered to lease BRHS for 30 years and $30 million, with an option to buy the property for $10 million at the back end of the lease.

“I haven’t heard what UHS is going to come back with,” McRoy said. “From what I have sort of read between the lines, I’m thinking it’s not insurmountable. Things can be worked out.”

Audience member Rick Gagliano posed this question: “What if they do come back with something that’s unmanageable?”

McRoy replied: “I don’t see that happening because I know they are making plans on how they are going to come in.”

On Friday, Dr. Brenda Peacock, vice chairwoman of the BRHS board, was asked to respond to some of McRoy’s remarks.

The first UHS letter of intent č signifying the health system’s willingness to explore a partnership with BRHS č noted the UHS offer was based on that organization’s “due diligence,” an exploratory process that happened to occur around the same time as the audit, Peacock related.

“It was always understood that they could potentially change their offer if (the auditors’) findings warranted that,” she commented.

Local health-system officials have been in contact with UHS officials, and it’s known that those neighboring officials are pretty much finished with their due-diligence work, Peacock said.

The doctor expects any changes – if there are any č in the UHS offer to be made public after the BRHS board’s Tuesday session.

Like McRoy, Peacock hopes UHS will be in place here by the end of April.

“We’re certainly hoping the sooner, the better,” she said. “They have put an awful lot into it, staying in it through the ups and downs.”

Peacock acknowledged the due-diligence work took longer than the original letter of intent indicated it would, but she doesn’t see the audit results as a deal-breaker for UHS.

“As bad as that audit was, the hospital has been and can be profitable again,” she said.

Also like McRoy, Peacock emphasized what she sees as a need to proceed with all due haste.

“I think most of the board had hoped that this would all be said and done, two, three months ago,” she said. “It does feel like it’s taken an eternity, but it does appear to be in the final stages.”

Contributing Writer Betty Mitchell Gray contributed to this story.