Public can weigh in on Tennessee firms proposed lease of Monroe hospital
Before that happens, the public will get a chance to hear a report by an outside consultant about the deal and ask questions about its findings during a meeting scheduled for 6 p.m. today at the hospital.
The report by Wipfli, a consulting firm of certified public accountants, is expected to be posted on the hospital's website Tuesday.
If approved, the deal between the Monroe hospital and Franklin, Tenn.-based Capella Healthcare would mark the first time that organization has partnered with a public hospital, said Mike Liepman, Valley General's chief executive.
"This is the best possible scenario if the (public) wants a hospital in this community," Liepman said.
Valley General has been plagued with ongoing financial problems, losing $3 million in 2010 and an estimated $3 million to $4 million last year, he said.
Capella Healthcare operates 15 small-to-medium sized hospitals in seven states, including Capital Medical Center in Olympia.
The deal calls for Capella to lease Valley General for 40 years for a lump sum payment of $33 million.
The hospital's taxing district would receive $29.9 million. Most of that money will be used to pay off $20.6 million in the hospital's outstanding bonds, Liepman said.
About $3.3 million will be used so that the hospital can buy a 10 percent stake in the financial deal, he said.
The rest of the money paid to the hospital district will be used for future charity care, or the medical bills of people who either have no health insurance or are not financially able to pay off their share of hospital bills.
Capella has also promised to spend at least $14 million over the next four years for capital improvements, Liepman said.
Capella reinvests profits back into the hospitals it owns after charging management fees for the services it provides.
The business partnership must be approved by the Valley General's three-member hospital board. Final action is scheduled for a 6 p.m. meeting Feb. 27. The public can also comment on the proposal at that meeting.
If approved by the hospital board, Capella would take over management of the hospital on March 1. The hospital would be governed by a six-member board that includes Capella and community representatives, Liepman said.
The hospital district's current taxing rate is 8 cents per $1,000 of assessed property value. The owner of a $260,000 home pays about $21 a year in taxes, Liepman said.
That taxing rate would stay in place, at least initially, if the agreement with Capella is approved, Liepman said.
Sharon Salyer: 425-339-3486; email@example.com.
Valley General Hospital's board members will discuss a report on the proposal for a business partnership with Capella Healthcare and take public comment during a meeting scheduled for 6 tonight.
The meeting will be in the Godard Room on the hospital campus, 14701 179th Ave. SE in Monroe.
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