Commissioners had one more chance to ask questions about Copper Basin Medical Center’s future during a workshop last week. Members of the hospital district board and Brim, the hospital management company, met with Greg Brooks, Daren Waters, Daniel Deal, Mark Bishop, John Pippenger and Wanda Cheek. Commissioners not in attendance were Buster Lewis and Fred Wilcoxon.

At issue is a request that the county, along with Ducktown and Copperhill, co-sign a $1.4 million line of credit so the hospital can get back on its feet. The hospital trustees feel the best way to turn the hospital around is a management contract with Brim. The hospital is currently operated under a lease with Copper Basin Community Hospital, Inc. The line of credit would be used to pay off back bills, open the surgery center, and provide operating capital.

Daren Waters asked what would happen if the commission turns it down. District board member Bea Tallent said they would have to look elsewhere; “we have no choice.” Keith Ballew said, “We won’t let it close.” Attorney Joe Johnstone said this is the best way to do it, the least expensive in the long run, and the quickest. Ford said Brim would try to help look for other sources of financing but there is not a lot of time. Waters said he had talked to a  lot of people, including another potential lender. Ballew said they need the cheapest rate they can get, and they can get a low rate with the government’s backing.

Mark Bishop asked if they have looked at the possibility of selling the hospital. Ray Ford with Brim said it could not be sold because of its financial situation, noting one of the hospitals Brim worked with wanted a turnaround so it would be sellable. Bishop pointed out that Bradley Memorial Hospital was sold and is now getting a major addition. Ron O’Neal said Mike Stevenson with Copper Basin Community Hospital has first option if the facility is to be sold.

Ford presented information about Brim’s successes in turning around  other hospitals and spelled out some key financial concerns at CBMC, including a $100,000 delinquent loan to a radiologist, around $100,000 owned to its attorneys (not the trustee’s attorney), unpaid health insurance premiums for employees, delinquent payroll taxes, a decrease in cash on hand, and no audits because the auditors have not been paid. He said there had been discussion about an earlier request for a debt consolidation loan but noted the hospital would not be able to get a loan because of its financial condition. “That’s why we’re talking about a guarantee.”

He said it’s a complicated problem that takes a complicated solution, adding time is of the essence. Two key goals are to pay off the vendors, which will make the hospital eligible for discounts on purchasing, and open the surgery center, which will generate more money. Ford emphasized that the steps they would take are not something a small hospital can take because of the needed expertise. “If we do it right, we get excellent results,” he said, noting Brim has a staff of specialists.

Ray Ford told the commissioners that Mike Stevenson, CEO at Murphy Medical Center and chairman of the board for Copper Basin Community Hospital, Inc., has said MMC will settle for $300,000 of the more than $1 million in debt if CBMC gets access to a line of credit and Brim is brought on board for management.

Following the presentation from Brim, commissioners raised some questions of their own and from the community. Among the answers:

• Answering concerns by physicians, Ford said Brim would not raise their rent. Dr. Allen Uhlik, Chief of Staff, said the doctors’ goal is to keep the hospital open and affordable. “Nobody’s going to leave whatever gets decided.” Ford agreed the hospital has good doctors. “They need a facility, nurses, and support. If you keep digging a hole, they won’t have it.”

• Brim does not feel the hospital is overstaffed, so overall reductions are not anticipated, but specific changes would be up to the management.

• Even with the reduced debt to Murphy Medical, Brim would rather not reduce the line of credit at all and would not be willing to go lower than $1 million. Ford said the hospital will always need access to credit for cash flow but he said the loan guarantee may not be needed in two to five years. Mike Stinnett commented that the county is still on the hook because it is a county facility.

• Recent collection efforts are making a difference but the bills are still coming in. John Freeman said they can do better with oversight, systems and processes and place. Ford said one person can’t do it all. Mark Bishop said the financial picture might have changed significantly with the recent efforts.

• Brim hopes to get the operating room up and running in 60 days. Dr. Uhlik said the surgeons from Cleveland, where patients currently go, would have to be satisfied with it before they would begin operating there. It would start with minor surgery.

• Brim would hire at least an interim Chief Financial Officer and Chief Executive Officer. Having a seasoned CFO is a core issue for Brim. Ford noted the key is how much he would save the hospital. There is no CEO currently, as David Hyatt is an assistant administrator.

• The contract with Brim includes all its management fees, which cover the core services other than travel. The initial 90-day contract is for a transitional period, during which they will negotiate a long-term contract. The transitional period will be more expensive because of the volume of work to be done immediately. Ford said they could start with a long-term contract, with $25,000/month for the first three months and then $15,000.

• The hospital trustees looked at various possibilities. Brim is the only management company that works to turn around non-profit hospitals. Most companies want to buy hospitals.

• Uhlik was asked if the hospital could operate to the level Brim is offering if the line of credit was available. Uhlik said they can do anything with the proper CEO. He said Brim would be faster but is also more expensive. “It can be turned around,” he said, adding that a cash infusion and opening the surgery center are necessary regardless.

• Attorney Jim Johnstone has torn up his proposed contract and will work for the district on an hourly basis. Greg Brooks asked him if he had been handing out business cards to employees considering suing the hospital and Johnstone said no. He said he has not talked to any individuals, although a lawsuit by the district was a possibility before the current agreement was reached.

• The district board is not looking at the idea of taking over the hospital after Brim’s 90 days is up. Joan Pack commented, “We would be back to square one,” adding they are looking toward a long-term contract.

• Brim is not charging a fee for the work it has done in the last few months. “It’s a cost of doing business,” Ford said. The hospital district is paying travel expenses, so far using the money Ducktown had originally provided for legal fees.

Ducktown Mayor James Talley said he understands there could be some good months but noted “We can’t predict the future.” He said he is concerned “the sky if falling if we don’t get it turned around,” adding he has concerns with putting additional money with the current management. He said the district board has put a lot of time into studying the possibilities and suggested the county allow them to do what they think is best. “I’m afraid something bad will happen if we drag it out.”

Uhlik suggested another session with Stevenson, Hyatt and finance manager Felicia Deal to get everything out in the open.

Brooks asked if the three governments could each guarantee 1/3, rather than the county co-signing for 50%.

Daniel Deal asked how long they were going to keep putting off a decision. “Nobody wants to sell it. We need to come to an agreement.” Brooks said they should put it on the October agenda and vote it up or down.

At a hospital district board meeting following the workshop, Tallent report that David Hyatt said the hospital will be caught up with employee health insurance premiums and payroll taxes in 90 days. Ballew said Copperhill, which had approved money for legal fees, had declined to let the board use that for Brim’s travel expenses, as Ducktown had allowed. He did not know if there would be enough.

The district board will meet again after the commission’s Oct. 16 meeting.