HCMC assets sold; purchaser will build new facility


The City of Hillsboro and the Hillsboro Community Medical Center
announced this week that they have entered into an agreement with
HMC/CAH Consolidated Inc. of Kansas City.

The deal includes the acquisition of all the hospital’s assets and liabilities and the development of a new hospital.

This means the current bonds and other debt would be cleared, and
HMC/CAH, as part of the agreement, will build a new state-of-the art
hospital in Hillsboro.

“There are still a few i’s to dot and t’s to cross,” said Michael Ryan,
HCMC administrator and CEO. “But what we do know is this is an
incredible opportunity to facilitate growth in the availability and
quality of healthcare services for Hillsboro and the surrounding
communities.”

Wendell Dirks, the chairman of the HCMC board, noted “that an
exciting opportunity exists for the community. Hillsboro Community
Medical Center brings an excellent reputation with a long history of
community service and HMC/CAH can bring much needed private capital to
ensure hospital services stay in the community through a state of the
art facility. We look forward to solidifying the future of healthcare
in Hillsboro at an affordable level.

The two organizations have been working through a period of “due
diligence.” HCMC board and administration have met with the principals
and staff of HMC/CAH and have visited a couple of HMC/CAH hospitals in
Missouri and Oklahoma.

At this point HMC/CAH, HCMC and the City of Hillsboro have approved
agreements providing for the sale of the hospital to HMC/CAH and for
the acquisition of property for the construction of a new hospital.

“I am sure everyone has questions, and we will schedule community
meetings to answer as many as we can within the next few weeks,” Ryan
said.

Here are some common questions and answers in the meantime:

1. Why would HMC/CAH Consolidated Inc. want to purchase the existing hospital?

The principals of HMC/CAH have a 30-year history of working with rural
hospitals, both consulting and managing. They understand rural health
care and what it takes to survive long-term. The technology involved in
the delivery of hospital services has changed over the years and our
physical facilities need to be responsive to those changes. They know
that when outdated facilities are replaced with new, state-of-the-art
facilities, utilization and revenue increase. In addition, a new
facility helps in recruiting physicians and new staff members. The
problem with most small rural hospitals is that they can’t access the
capital required to update or replace their facility.

2. What happens to Salem Nursing Home?

Salem Nursing Home will continue to operate and serve the community
of Hillsboro and the surrounding area. The staff would remain the same
with residents continuing to receive outstanding quality service. As
the hospital operations are relocated to the newly constructed
hospital, nursing home leaders will benefit from the opportunities
presented by having a larger campus to utilize.

3. Would the company replace existing staff members with people who already work for them in other locations?

No. absolutely not. HMC/CAH knows that the current hospital staff
provides a very high quality of patient care, so they have no reason to
fix what is not broken.

Finding and hiring qualified hospital personnel is difficult at
best; one of the major benefits of purchasing the hospital is that a
highly qualified staff already exists. If the company started from
scratch they would have the very challenging and costly task of finding
and hiring the right people.

4. Will building this new hospital make my taxes go up?

No, actually, quite the opposite. Building this hospital will be
done completely with private financing. No taxes will be assessed to
build or operate this new facility. In fact, the new hospital will be
placed on the Marion county tax rolls, thus helping to ease the tax
burden for all county residents.

5. Where will the new hospital be located?

The new hospital will be built on property at the southwest corner
of U.S. Highway 56 and Industrial Road. We wanted to locate on property
that would be accessible to all residents of Marion County. The
visibility of the highway location may result in other health-care
related businesses deciding to join us on our new campus.

6. Will the community give up local control of the hospital?

The company realizes that success is not possible without community
support. HMC/CAH is motivated to make sure the community continues to
feel like the hospital is part of the community. Therefore, the current
hospital administration will continue to run the hospital on a
day-to-day basis; nothing will change in that regard. The company also
asks that the current hospital board members continue as members of an
advisory board to provide input related to new added services or
changes in the existing service mix, and to provide community input on
any number of issues where community approval and acceptance is
required.

7. What other benefits will the hospital receive, in addition to the new facility?

Being a part of a larger organization gives the hospital access to
greater purchasing power and lower prices for supplies. In addition,
the hospital is able to bargain with insurance companies as part of a
larger group to set rates and attract new carriers so patients with all
types of health insurance can use the inpatient and outpatient services
provided by the hospital without paying for any higher out of network
co-pays or deductibles.

The company also has resources that normally the hospital Would have
to purchase, such as educational and consulting services. Employees of
member hospitals share information and expertise with each other on
both a formal and informal basis. These resources can be related to the
quality of patient care or operational issues such as billing and
reimbursement.

8. Are their other benefits to the community not necessarily related to patient care?

Yes, definitely. There are some significant benefits related to the
economic health of the community. The first two factors many companies
consider when deciding to relocate or expand to another community are
the quality of the schools and the quality of the health care available
for their employees and their families in case of sickness or injury.
These are the same concerns for any individual moving to Hillsboro. The
parents of a prospective Tabor College student want to know if quality
medical care is available nearby. A new hospital will add new jobs and
expand the economic base of the community, benefiting everyone
including those seeking employment, as well as retailers, banks and
other businesses in the community.

9. What can you tell us about the company HMC/CAH?

The parent corporation of HMC/CAH is Hospital Management Consulting,
which has provided a variety of hospital services to more than 800
hospitals across the United States since 1982. The principals of
Hospital Management Consulting formed HMC/CAH for the express purpose
of purchasing rural hospitals and then replacing the old dated
hospitals with new, state-of-the-art facilities. The delivery of health
care has changed dramatically over the past 50 years and the physical
lay-out of hospitals can impact that delivery to a great degree.

In closing, Ryan thanked Mayor Dalke and the HCMC Board of Directors
for their untiring efforts in making this effort a reality.

“These agreements represent the culmination of thousands of hours of
work. The community is the real winner in this opportunity for economic
development and improved health care.”


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