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Hospital board prepares for asset transfer

Last independent hospital in region

by: Photo by Holly M. Gill - Jeanie Gentry, CEO of Mountain View Hospital

It's crunch time for the Mountain View Hospital Board of Directors, which is working on an agreement to transfer its assets to St. Charles Health System by Jan. 1, 2013.
   Under terms of the tentative agreement, the hospital district would hand over its facility and 17.75 acres -- which the Jefferson County Assessor's Office shows have a combined real market value of about $11 million -- to St. Charles.
   St. Charles Health System would take on the district's liabilities, including a USDA loan, and agree to make significant investment in the hospital, which would become St. Charles Madras on Jan. 1.
   St. Charles Health System, which owns the Bend and Redmond hospitals, and leases and operates Pioneer Memorial Hospital in Prineville, currently provides management services for Mountain View Hospital, including the hospital's chief executive officer and chief financial officer.
   The seven-member MVH board has been looking for a solution to financial problems since earlier this year, when several factors changed the financial outlook for the hospital.
   A reorganization of the way Oregon pays for Medicaid, as well as reductions in federal payments for Medicare and Indian Health Service patients, and the loss of two doctors and a surgeon have substantially reduced revenue for the hospital since the beginning of the year.
   In addition, the hospital will be forced to convert its records to electronic records by 2014, which would cost the district $3.5 million on its own, compared to $500,000 to $800,000 in cooperation with St. Charles.
   At the end of the 2011-12 fiscal year, the hospital faced an expense to revenue deficit of $434,601.25. Counting other expenses and revenue -- and some one-time costs from the hospital's construction plans -- the hospital was in the red to the tune of $3,162,836.65.
   In July, the hospital board announced that it was working with St. Charles as it considered three options: an asset transfer, a lease, or a merger.
   By August, the board had held two public forums, and settled on the asset transfer -- the route taken by the Redmond hospital in 2001 -- as the best solution.
   Some in the community have questioned the legality of turning over a publicly-owned hospital district, supported by taxpayers over a 45-year period, to a not-for-profit corporation.
   "We are working with a number of attorneys, and they are making sure that everything we do is legal," said Jeanie Gentry, hospital CEO.
   Others, including longtime physician and emergency room doctor, Bud Beamer, have suggested that the district pursue a several-year lease to see how the arrangement works before turning over assets.
   "It's possible for the district hospital to do that, but it is more difficult, and it would keep St. Charles from investing in the asset, because they wouldn't own it," said Gentry.
   Beamer, who was vocal in his opposition to the asset transfer, has been on unpaid administrative leave from the hospital since August, when he took a syringe of ketamine from the ER to treat his dying dog. He returned the vial unused, but is under investigation, and has been told that he will not be able to return to the hospital.
   Regarding Beamer's dismissal, Gentry said the hospital board will not discuss personnel issues in a public meeting. "I don't know when a final decision will be made on the issues; there's more than one issue at play here," she said, but declined to elaborate.
   The hospital district also has considerable assets -- such as equipment -- and owns the Madras Medical Group building and property, which has a real market value of $724,636, and the hospital thrift store, which has a real market value of $363,346.
   "Our market values are for tax purposes only," cautioned Jean McCloskey, Jefferson County assessor, regarding all estimates. "If you wanted current market values, a fee appraisal would be in order."
   The hospital board will meet Tuesday, Oct. 23, at 5:30 p.m., in the Metolius Room at Mountain View Hospital.
   Members of the elected board include Chairwoman Janelle Orcutt, Tom Kirsch, Rich Candland, Lee Bissell, Jim Quaid, Bev Schultz, and Mack Gardner.