The Hospital Commission met April 15 in the basement of the Eureka Springs Hospital where discussion moved immediately to the “financial issues” with Allegiance Health Systems, the company contracted to manage the hospital. Chair John House said the commission received numerous reports of hospital vendors not receiving payment for goods or services contracted by Allegiance.
It was also noted that the Emergency Room physicians had not been paid by Allegiance for their payroll salaries in a timely manner. House asked the Commission, “When do we say, ‘correct this or get out?’”
Commissioner Michael Merry answered that while the Hospital Commission would like to be able to step in and pay the salaries and vendor invoices that were in arrears, legal counsel has advised that it would be contrary to state regulations to use public taxpayer funds to benefit a for-profit organization such as Allegiance.
Commissioner Peggy Duncan stated she uses the hospital services on a regular basis and the last thing she wants is for there to be no ER doctors on staff when she needs them.
Commissioners agreed that top-notch service is paramount and the staff deserves to be paid on time. Commissioner Christopher Baranyk pressed the issue of collecting documentation of these financial events and moving forward with legal proceedings against Allegiance saying, “I think they know they are on borrowed time.”
Commissioners came to two unanimous decisions: 1) Put aside $50,000 to cover emergency room physicians’ salaries in the event their employer does not pay on time with the intention of seeking reimbursement from their employer, and 2) In the event the $50,000 is ever used the commission will initiate legal proceedings against Allegiance holding them in default of contract.
Surely there is a clause in the contract that allows the hospital commission to rescind the contract if they are not paying their bills. This goes beyond vendors not getting paid and could result in inadequate supplies for people staying in the hospital or using the ER. We need to negotiate with a large healthcare provider about taking over the ES Hospital as the hospitals that are doing the best are part of larger organizations that allow cost and staff sharing, and economies of scale.