Hospital Respondents Share Visions With Commission

Huntsville, TN (2011-07-05) Representatives from both parties interested in becoming the next operator of the Scott County Hospital took their opportunity to speak to Commissioners Monday night, hoping to be the company chosen to lead the Hospital into the future.

At the regularly scheduled work session of the Community Development Committee Monday night, representatives from Downey Enterprises, LLC, and Pioneer Health Services introduced themselves to Commissioners, and expanded upon the proposals submitted last month.

Speaking first, Donald Downey, CEO of Downey Enterprises, LLC, introduced himself and two of his partners, Dr. Doug Smith, a surgeon who has practiced in Scott County for many years, and Dr. Glenn Hall, the Cookeville pathologist who examines specimens from St. Mary’s Medical Center of Scott County. Downey began by explaining why he was interested in taking over the Hospital. “When Mercy announced their intention to end the lease, I was a very upset,” Downey said. Downey explained that while he felt Mercy did a fine job of upgrading the facility, Mercy had lost touch with the staff. “You have to have all your physicians behind you to make this work. The Hospital needs the community, and the community needs the Hospital,” Downey stated.

In outlining his proposal for the Hospital, Downey expressed his intention to convert the Hospital away from the Critical Access model, back to a Community Hospital. In addition, Downey plans in the first year to obtain a Certificate of Need from the State to construct a new surgical center in Scott County, moving the OR to an outpatient facility. Downey estimated the cost of the facility to be roughly $5 million. “We would buy the land, but we would need help (from physicians and other investors) on the building,” Downey said. Downey’s long-term goal is to create a number of joint-venture facilities, with physicians having ownership stakes within those areas. “Physicians can own up to forty-nine percent in the businesses (according to Federal law),” Downey said. The ultimate plan would be to construct a 45-bed in-patient facility, which could cost up to $30 million.

After the presentation, Commissioners had an opportunity to ask questions of the trio. “Do you feel right now that you have enough support from local physicians to do this?” asked Committee Chairman Paul Strunk. Downey said the he had few commitments, but he believed that he could make his plan work. “I’m counting on Doug and Glenn, who know the local people, to do this better than I can,” Downey said. Commissioner Brian Armstrong questioned Downey about the viability of having an outpatient surgery center. “I don’t understand how having an outpatient facility is going to help the Hospital,” Armstrong said. Downey explained that inpatients were not always the most profitable. “Even the big hospitals in Knoxville don’t make much money on inpatient care, but they know they can count on their outpatient services to keep cash flow high,” Downey said.

Speaking afterwards, Morgan Dunn, VP of Business Development, and Steve Fontaine, VP of Hospital Operations for Pioneer Health Services explained their proposal as well. Pioneer operates eight hospitals in the Southeast, all of the Critical Access Hospitals like the Scott County hospital. “Our model is based on the Critical Access model. We have very specific services that we like to provide, all of which are available in all our facilities,” Dunn stated. When asked by Strunk why Pioneer felt that Critical Access was the way to saving the hospital, Dunn explained it was about cost reimbursement. “Medicare is the only thing that affects the Critical Access model,” Dunn said. Currently, only facilities with 25 beds or fewer qualify for Critical Access. However, Dunn noted that many hospitals with 26-50 beds were attempting to lobby the government to allow them to qualify as well. “They are trying to get in on the model, because they cannot support the volume without being cost reimbursed,” Dunn explained.

Fontaine noted that Pioneer would also be looking at opening satellite facilities in surrounding counties, hoping to draw some volume from them. “We also believe that having the trust and support of local physicians is important,” said Fontaine.

Some Commissioners questioned the details of the Pioneer proposal as well. “What things in this proposal are open to negotiation, and which are set in stone?” asked Strunk. Dunn stated that only the level of compensation to the County for rent, as well as the reimbursement by the County to Pioneer for indigent care, would not be negotiable. “So basically you’re saying that the $12,000 per year is the one thing you won’t talk about,” stated County Mayor Jeff Tibbals.

Strunk also questioned Dunn about the fact that Pioneer’s corporate office in located in Magee, Mississippi, a good distance from Scot County. Dunn noted that with Scott County having a fine airport, corporate officers would have no difficulty getting to the local area. “Someone from corporate is on every site, every week, from one division or another,” added Fontaine.

The Commission will continue to evaluate the both proposals.