clear
Thursday May 7th, 2015 5:48AM

Habersham Medical Center finances described as 'untenable'

By Rob Moore Reporter
Related Articles
CLARKESVILLE - The Habersham County Commission took steps Monday night to make sure it can back financially-challenged Habersham Medical Center.

In his report to the commission, Hospital Authority of Habersham County Chairman David Kerby shared with commissioners some of the financial struggles faced by the hospital.

"The hospital completed its annual audit and our auditors gave us a clean audit, but that doesn't mean that everything's good," Kerby said. "Their conclusion was that the financial situation of the hospital is untenable and that it cannot stay operating in the financial situation it's in now for an extended period of time. Hence, our working with Northeast Georgia Medical Center with some sort of alliance where we can share expenses and streamline some of our operations."

Kerby explained some of the challenges hospital management faces in achieving institutional financial goals.

"Some of our problems stem from reimbursements being down," Kerby said.

"That is payments that we receive from second- and third-party insurers such as Medicare," Kerby said. "For example, we're down because utilization was down. That's driven by several factors. One is the unemployment, which we just heard - they're a lot of people in dire financial straits that can't afford treatment; and, two, the Center for Medicare Service has decreased the amount they allow us to charge for certain things, and under some circumstances they can even take the money back."

Additionally, lower salaries than in other locations results in employees leaving frequently.

"Our employees' salaries are lower than average for the jobs and so consequently we have some high turnover, which again adds to your costs," Kerby said. "So we're looking for ways to mitigate our turnover."

During an added agenda item during the new business portion of the meeting, the commission voted to approve seeking requests for proposals for a line of credit for the county should it have to step in to meet the hospital's financial obligations.

"We're hoping and praying that we don't, but we want to be prepared just in case there was a need to dip into this line of credit," said Chairman Chad Henderson.

"This is just authorizing us to proceed and send out the request for proposals," said Roger Murray, bond attorney for the county. "We'll get the proposals back, then I'll come before the board again. You'll have an opportunity to authorize the final firm and the final transaction."

"We are not voting to borrow money right now," Henderson stressed.

Murray gave some history of the county's obligation to back the hospital.

"Back in 1978, the county entered into an intergovernmental contract with the [hospital] authority, and that contract has been continued all the way up until 2007," Murray said. "Under the terms of that contract, the county agreed to provide to support the operations of the debt service of the hospital authority."

"The county's in the position right now where it has to provide money to the hospital authority, but the exact number is unknown," Murray said, noting when it's going to be due also is unknown.

Murray proposed that he and County Manager Phil Sutton solicit proposals for a line of credit.

"If the money is needed to pay hospital operations or debt service, you can draw down on the line of credit and repay that over an extended period of time as opposed to having a shock to your budget or your cash flow," Murray said.

Following the meeting, Henderson commented further on the issue.

"In anticipation of there being some shortfall due to a letter that we were sent by the hospital authority and by the finance director of the hospital back several weeks ago, I went to [County Manager Phil Sutton] and asked him to come up with contingency plans just in case we weren't to actually meet the financial obligations of the hospital," Henderson said.

"We got with our bond attorney, Roger Murray, and asked Roger for several different options to be able to take a look at what we might need to do to shore up that institution," Henderson said. "We were looking at several different scenarios, one being on a short timetable, one being on a little longer timetable. What we've come up with would be to look at and RFQ for a line of credit that would allow us to finance what we would need to in the short term. When I say the short term, it would be for up to a five-year period, and that basically is buying us time."

"We will continue to work with the hospital authority and hope that this isn't actually needed, however I just felt as though it was something we needed to make sure we put in place in case we do run into a situation where the county does not have other money to meet those obligations," Henderson said.

In response to a question from Commissioner Sonny James, Henderson said the line of credit would be used only if required and would not cost anything unless utilized.
© Copyright 2015 AccessNorthGa.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Medicaid growth creates gap of 5M without coverage; 409K in Ga.
About 5 million people will be without health care next year that they would have gotten simply if they lived somewhere else in America.
7:30AM ( 1 year ago )
Vandals spray graffiti against Kerry in West Bank
Suspected Jewish vandals set fire to three vehicles in a West Bank village early on Tuesday and sprayed threatening graffiti referring to U.S. Secretary of State John Kerry ahead of his expected visit to the region, police said.
7:28AM ( 1 year ago )
Feds announce test sites for drone aircraft
The Federal Aviation Administration announced six states on Monday that will develop test sites for drones, a critical next step for the march of the unmanned aircraft into U.S. skies.
2:23PM ( 1 year ago )
Politics
Georgia sheriff charged in shooting of real estate agent
LAWRENCEVILLE, Ga. (AP) — A Georgia sheriff has been charged with reckless conduct in the shooting of a real estate agent as prosecutors look into his statement that he was conducting police training...
4:26AM ( 1 hour ago )
Deal signs watered-down craft breweries bill
Gov. Nathan Deal has signed a watered-down bill allowing craft breweries to let customers take home as much as 72 ounces of beer, or the equivalent of a six-pack, but only as a "souvenir.''
6:09PM ( 11 hours ago )
Brush fires along I-85 in Gwinnett Co. cause problems for motorists
The brush fires that were burning along an estimated six-mile stretch of I-85 southbound have now been extinguished and the road is reopened.
By Staff
4:00PM ( 13 hours ago )
Ride-hailing regulation bill gets Gov.'s signature
Ride-hailing services such as Uber and Lyft, which connect riders with drivers by means of a smartphone app, will soon have to comply with some Georgia regulations under legislation signed Wednesday by Gov. Nathan Deal.
By Associated Press
2:37PM ( 15 hours ago )
Fire destroys Jackson Co. home
A Jackson County family lost everything in a house fire Tuesday afternoon, according to EMS Director Steve Nichols.
11:59AM ( 17 hours ago )