Hospital seeks support from city for sale

By John Howell
The changing landscape of the nation’s healthcare brought Merit Health Batesville CEO Travis Sisson to Tuesday’s meeting of Batesville’s board of mayor and aldermen seeking a letter of city support for the hospital’s acquisition by Curae Health, Inc. from Community Health Systems, Inc (CHS).
The city, county and South Panola School District are facing a total $336,296 loss in ad valorem taxes with the sale to the non-profit Curae Health.
Sisson requested, on Curae Health’s behalf, a letter to the United States Department of Agriculture (USDA) stating the city’s support of the acquisition. Curae is seeking the USDA loan “to provide the acquisition capital for Curae, the parent company, to acquire our facility and the other three facilities that are part of this package,” Sisson said, responding to a question from Alderman Ted Stewart. Loan proceeds will “also provide initial capital for any improvements that we need to do,” Sisson said.
Curae Health announced September 29 the acquisition of Merit Health Batesville along with Merit Health hospitals in Amory and Clarksdale and the Highland Medical Center in Sebring, FL.
“This letter that we’re asking for is simply a letter of community support saying that you like having a hospital in your community,” the hospital administrator said Tuesday. The letter places the city under no obligation.
Mayor Jerry Autrey said that officials from Curae Health had met on Monday with him, SP Schools Superintendent Tim Wilder and Panola County Board of Supervisors President Cole Flint.
“They are non-profit, but there are a lot of different ways they can help the city and the county,” Autrey said he had learned during the meeting.
“One that they discussed is about the prisoners out at the jail. They spend a lot of money out at the hospital tending to them, and they might get some kind of program going,” Autrey said.
“How will it help the city?” Alderman Bill Dugger asked. “That helps the county.”
“My understanding is that the difference — profit versus non-profit — is that a non-profit’s obligation is to reinvest in the community where it’s almost a parity compared to the loss of tax revenue,” Alderman Eddie Nabors said.
“I’m not sure it’s codified that way in the law, but that’s the essence of the way we would intend to operate the hospital,” Sisson said, “is to be a good partner and community citizen and reinvest the earnings that the hospital has in keeping the hospital healthy in support of the community rather than the earnings from the hospital leaving and going to another community.”
The mayor said that the hospital with about 400 employees is among the county’s largest employers. “This is another way to make sure the hospital stays here,” Autrey said.
“I agree with that because we sure don’t want to lose them,” Dugger said.
The CHS’s divestiture decision was prompted by a $1.43 billion loss in the second quarter this year, according to an industry publication, HealthLeaders Media. CHS shares dropped from $47.24 last October to $11.24 on the day the divestiture was announced.
CHS is negotiating to divest 17 hospitals, home care businesses or non-hospital real estate properties CHS CEO Wayne T. Smith told analysts Thursday, according to HealthLeaders Media. The  sale, expected to generate $1.2 billion for CHS, includes the four facilities being sold to Curae Health.
In early October, Curae Health CEO Steve Clapp told HealthLeaders Media  that he believes small community hospitals will benefit from “an affiliation with a smaller company that specializes in rural settings.”
Clapp told HealthLeaders Media that the newly formed non-profit planned to adopt “cost reduction strategies that are not available to the for-profit sector.”
“The second strategy has been focusing on the revenue opportunities  and volume retention inside the community,” Clapp continued. “Our company is purely focused on what services we can provide and what patients we can retain in our communities.”
Aldermen voted unanimously for the letter of support to USDA.