Tuesday, January 24, 2012

TOP STORY >> City to sell hospital for $10M

Leader staff writer

The firm that has managed North Metro Medical Center for the past three years is finalizing the paperwork on a $10 million local loan to purchase the facility from the city.

Allegiance Medical has worked out the loan with First Arkansas Bank and Trust, but the city had to put up the medical clinic near the hospital that it owns as added collateral.

Attorney Mike Wilson, chairman of the hospital board, told the council Thursday night the sale would include only the hospital building. The city retains ownership of the nearby medical clinic, medical offices at Crestview Plaza and the clinic in Cabot. The city will also have what Wilson called right of first refusal for the next five years in case Allegiance decides to sell the hospital.

But Jay Quebedeaux, the hospital’s chief executive officer, said that was doubtful. “The hospital is celebrating its 50th year here, and we expect to be around with it for the next 50,” Quebedeaux said.

The city council actually approved the sale of the hospital in November 2010. City leaders thought everything would have been ready six months ago, but it has taken longer to secure the financing and get the paperwork in order.

“We expect to close on this deal by the end of the month,” said Wilson. “The sale is going to happen soon—finally,” he added.

Wilson called Allegiance a first-class management team and said the only thing residents, patients and patrons will notice after the sale is “continued improvements. It should be seamless to the public.”

The approximate $10 million price tag would cover the bond the city has on the hospital and other related debts and lines of credit.

According to the mayor’s 2012 State of the City report, the hospital employees about 400 people and has a $17 million economic impact on Jacksonville and the surrounding area.

In the past fiscal year, the hospital had 19,661 emergency room visits, 1,688 outpatient surgeries (an increase of 30 percent), 1,741 admissions and 38,893 outpatient visits.

In September, the hospital opened a surgical inpatient wing — a specialty unit that houses patients in private spacious suites after they have undergone surgery and require inpatient stay.

The hospital also opened an inpatient medical unit with 26 beds, and in November it reopened its heart catheterization and interventional radiology lab.

Mayor Gary Fletcher complimented Allegiance for making improvements at the hospital.

The mayor called the hospital a great asset to the city and that it has come a long way over the last few years. “It’s very important to us and to the air base,” the mayor said.

Under the management of Allegiance the hospital turned a profit in 2010. Before 2010, the last time the hospital operated in the black was 2003-04, when it closed the fiscal year June 30, 2004 with a $652,000 positive income.

The next year, net income slipped to the other side of the ledger with a $98,000 loss. In 2005-06, losses totaled $804,000, and then jumped to $3 million in 2006-07. The 2007-08 fiscal year closed out with a net loss income of $2.38 million.