Hospital puts hold on new office

Published 5:14 pm Tuesday, February 3, 2009

At a called meeting on Jan. 28, the Memorial Hospital and Manor Hospital Authority voted against a motion to go ahead with the construction of a new medical office building.

Prior to the vote, Assistant Hospital Administrator Lee Harris spoke about impact the new 17,000-square-foot building would have on a number of physicians. He said the hospital administration has met with the medical staff at length discussing inadequacies in their offices.

Harris explained that seven physicians would be moving once the new building is complete. The move would allow for much-needed space for staff work space, specialized equipment, additional exam rooms and physicians who wish to expand their practices, bringing in mid-level providers—physicians assistants or nurse practitioners.

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The new office complex would also provide the space necessary for the hospital to bring in new doctors.

Hospital CEO Jim Peak said the hospital hopes to bring in two new physicians and is looking at family practice physicians and pediatricians. He said acquiring the doctors would be more difficult without the new medical facility project underway, which would free up space for the new physicians.

Chief Financial Officer Billy Walker gave a projection of the 2009 revenue the hospital hopes to receive through cost cutting methods already implemented in order for authority members to have a full understanding of the hospital’s financial standing prior to making their decision.

He reported a 2009 revenue of $1,105,459—after factoring in the 2008 $1,026,862 loss—accumulated if the hospital reaches their attrition goal by offering employees early retirement packages as well as no longer funding school nurses and athletic trainers.

Walker noted the revenue he quoted did not include an estimated $500,000 the hospital expects to receive from the Indigent Care Trust Fund and savings accumulated by contracting with the Med Assets Corp., which will handle a number of financial processes at the hospital and is anticipated to increase revenue acquisition by an estimated $4 million over the next five years.

The low bid for the new office building came from PDC Construction for $2,242,000.

When the motion to accept the bid came to a vote, it was stuck down in a 2-4 vote with Dr. Linda Jones and Mary Breedlove voting for and Dr. Charles Walker, Charles Tyson, Glennie Bench and Johnny Grimsley voting against. Members in opposition voiced concerns about the national economy and desires to take time for cost-cutting procedures implemented by the hospital to prove their worth.

“I’m for the project, but the timing on the project is just not right,” said Tyson.

Grimsley and Bench said they would like to see the hospital at a better financial status before proceeding with the project, allowing time for savings to materialize.

All members of the authority agreed that the new office complex was necessary and expressed interest in continuing with the project in the future.

The board passed a motion to defer the project for a period of no more than six months—effectively placing the project on the shelf to be picked up at a later date. The board also asked the hospital administration to look into immediate accommodations that can be made to improve the situation of physicians with the most urgent needs.

Walker also reviewed the hospital’s insurance renewal premiums, some of which took effect on Jan. 1, and other will take effect Feb. 1. The overall total insurance premiums went down from $502,675 in 2008 to $472,374 for 2009—a savings of $30,301. The authority approved the new premiums.