This is the second installment in a five-part series exploring the future of Durham Regional Hospital, which may enter into a partnership with another company to provide health care in Durham. This installment examines Health Management Associates' bid to manage Durham Regional. Tomorrow's story looks at the offer by Tenet.
Health Management Associates has made its bid to manage Durham Regional Hospital for the next 30 years-and Senior Vice President of HMA Gary Bell is confident that its offer is the best of the three.
"HMA has the best track record of any hospital operating company for increased utilization, which means we are providing more care to more patients than any other hospital operator," Bell explained.
"Our five-percent increase in admissions over the past six months is greater than any other company," he added, noting that Durham Regional has had an eight-percent decrease in admissions during the same time period.
HMA has remained a contender since county commissioners began soliciting competing bids early last fall, even after the board whittled down the options in January.
The proposal HMA has on the table calls for the company to prepay $150 million for a 34-year lease, which would leave Durham County with funds to invest immediately into the community. HMA is also offering to pay the annual $1.6-million property tax that Durham Regional would pay if it were classified as for-profit.
In a letter to County Manager Dave Thompson in November, Bell said the prepaid lease would free the county from the burdens of its large debt.
First and foremost, however, Bell said HMA brings to the table the ability to improve hospital service in Durham by making its primary concern the satisfaction of patients, employees and physicians.
"Patients have a choice where they want to go to the hospital, employees have a choice where they want to work and physicians have the choice to send their patients where they want to," he said. "We will provide the very best care: outstanding care at a reasonable cost."
Bell also highlighted HMA's commitment to high quality patient care in his November letter. "HMA provides for all patients in need at each HMA facility regardless of their ability to pay," he wrote. "This commitment provides for those seeking care through the emergency room or through admission by their physician." Explaining that the company is committed to indigent care, Bell noted that last year HMA provided $47.5 million in charity care over and above federal state and managed care discounts and allowances.
The HMA bid also calls for the continuation of direct funding of the $3.1 million Durham County subsidy to Lincoln Community Health Center and Emergency Medical Service. Bell explained that the money that has been earmarked for LCHC would go directly to LCHC, whereas heretofore it has been given to Durham Regional to help them offset the services they provide. Under the HMA plan, Durham Regional would continue to provide charity service at no further charge to the county, Bell continued, so LCHC would come out with more money than it would under either of the other two options.
"Essentially we will continue to provide these services, but LCHC will receive money from the county," he said.
HMA has also vowed to manage the Durham County Emergency Medical System for no fee, and has agreed not to charge the county for either direct or indirect costs.
The summary of the HMA proposal provided to the county commissioners by the Public Consulting Group, an independent policy analyst, highlights several key advantages of the proposal made by HMA, including the company's commitment to avoiding employee layoffs for three years and maintaining charity care at its current levels or higher.
The company, Bell said, is also committed to improving operating margins through efforts such as maintaining extensive cost savings and increasing inpatient services and ambulance use, thereby increasing revenue.
The summary also pointed to a number of key considerations that could tip the balance toward the Naples, Fla.-based company.
Its plan, according to the consultants' report, offers the best financial arrangements for Durham County and gives County Management the opportunity to establish a "community fund" to meet future health care demands.
"HMA-affiliated representatives confirmed that HMA not only lived up to but exceeded their obligations-HMA delivered on their commitments," the report states.
Bell emphasized that the quality of his company's proposal is far superior to the other two competitors. "Our proposal... provides for both the present and the future health care delivery needs of Durham County and its health care service area," he said.
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