Discussions continue about the fate of Copper Basin Medical Center. Trustees of the hospital district emphasize that it is not for sale, but it is facing the same financial troubles that plague small hospitals across the county -- charity care and bad debts. The hospital currently operates under a lease with Copper Basin Community Hospital, Inc.

Financial information provided last week showed the hospital has more than $1.9 million in receivables -- money owed to the hospital,  and more than $1.3 million in payables--bills that it has not been able to pay, not counting short-term notes and long-term debt for equipment which bring the total debt to more than $3.3 million.

Mike Stevenson, chairman of the hospital board, said it has been profitable lately but it is difficult to catch up with past-due accounts. David Hyatt, who has served as interim CEO, said steps are being taken to collect money owed to the hospital as well as operate more efficiently.

Stevenson stressed that the hospital Board and Trustees need to work together toward the day when the lease is up in 2011, although the Trustees have said the lease is in default and should be terminated. First, though, they want the lease be amended to take out a clause that the debt as well as the assets will return to the hospital district when the lease is up. Stevenson said he would not agree to that.

He told the trustees last week that there needs to be a discussion about the future, with the hospital board, trustees and medical staff working together. He suggested teaming up with a large hospital that can provide expertise and savings through its purchasing power. “That doesn’t mean it would be owned,” he said, noting there are several ways to form a partnership. The most common, he said, is a management contract whereby the large hospital puts in management, resources, and billing expertise. The small hospital would give them more volume for their purchasing. Stevenson said this is sometimes done without a management fee over and above salaries.

“I think we have a very short time frame,” Stevenson told the trustees, stressing the need to focus on collections. “The clock is ticking,” he said.

Trustee Bea Tallent said the hospital is not going to close, adding, “It’s not for sale.” Stevenson said he respected the trustee’s feelings but added the hospital is sick in financial terms. “We need to look at a relationship to get on a sound footing.” He said he did not know if a partnership would have to be with another Tennessee hospital and suggested sending a letter to hospitals they might be interested in working with.

Tallent asked Stevenson if he was saying they don’t have the knowledge to manage the hospital and Stevenson said, “It’s very thin,” adding, “We need expertise. We don’t want to keep sliding.” He said a price increase is planned but he didn’t know how much it will help the bottom line. Hyatt said around 70% of their patients are on Medicare or Medicaid and around 17% of the rest are on contracts with health insurance.

Attorney Jim Johnstone, representing the trustees, said the trustees first priority is to be protected against the $3.3 million debt at the end of the lease. “This has to be addressed,” he said, with an amendment so the hospital district doesn’t pick up the tab for indebtedness incurred by Stevenson’s corporation. Stevenson pointed out the indebtedness is intertwined with the assets. Johnstone said the trustees were totally in the dark about how bad it was and approved the new lease under duress. This issue is a clear conflict between the two sides, he said. “Talking about a partnership makes sense but we won’t want our folks picking up the tab at the end of the lease.” Stevenson said the debt could be down to a reasonable level with a good partnership. He said another advantage to a partnership would be the ability to get credit from a bank for a debt consolidation loan to make progress on the delinquencies.

Johnstone said they need to establish priorities with the debts, noting there is an emergency situation with employees’ health insurance. The hospital has a partially self-funded program whereby it pays employee medical bills up to a certain level, but some of those payments have not been made and the employees are being contacted by collection agencies. Hyatt said he is working with other hospitals to get the liability off the employees.

Stevenson asked several members of the medical staff how they felt about a partnership, adding it would be important for the medical staff to be able to work with a new partner. Dr. Tim Jabaley pointed out that the hospital does not have a powerful hand for negotiations. There were several comments about the need to partner with another not-for-profit hospital. Stevenson said the for-profits would want to own the facility or else get a management fee.

Hyatt said they might want to consider getting a consultant to give advice rather than form a partnership.

Dr. Siddiqui said there is a rumor that the district Board is talking to people that might be interested in buying the hospital. Tallent said that is not the case at all.

Hyatt recently resigned as interim CEO, suggesting the hospital board try to find someone who knows the ins and outs of administration at a critical care hospital. He said he would prefer to serve as assistant, adding, “We need to recognize the need to look out for the well-being of the hospital.”