Nicky Boyette – Chair Michael Merry spoke to city council Monday to explain the state of the hospital commission, saying that in 2006, the commission’s job was to run Eureka Springs Hospital, but the task became too expensive. Commissioners contracted management of the facility to Allegiance Health Care, a for-profit company based in Shreveport, La.
Merry said Allegiance has not divulged how much it costs to operate the facility, but business is good enough they recently brought in a 32-slice CT scanner, a machine that produces better images than almost any other in the area. Even though Allegiance has upgraded other services so more patients can get services they require without leaving Eureka Springs, the management company so far has not lived up to the promise to build a new hospital in town.
Each year, the commission receives $375,000 from Allegiance and Louisiana Home Health Care, and Merry expects the commission will end 2016 with $2,280,917 in their several accounts.
“What do we need the money for?” he posed. He said if Allegiance filed for bankruptcy tomorrow and left the scene, the commission would use its resources to pay staff and bills while it looks for another management company. He mentioned he has been approached by other companies with an interest in running ESH, so he’s confident the commission could find a replacement if they had to. However, if the commission ever let the doors close, ESH would never open again because of recent legislation limiting critical access hospitals from being within 15 miles of each other.
Nevertheless, Merry said he is confident Allegiance will stay. The final automatic five-year renewal of their contract triggers during 2017.
Alderman David Mitchell pointed out Allegiance would need to give only a six-month notice to get out of the contract, and he was not convinced the commission would be able to operate ESH. He urged commissioners to develop a plan for such a scenario. He also suspected another combination of medical services, maybe not a hospital, might in time replace ESH.
Merry agreed a different configuration of medical services might operate there some day, but assured Mitchell the commission’s funds were in place to protect the hospital. He reiterated that Allegiance has been bringing in new services so patients can stay in the area.
Alderman Kristi Kendrick re-emphasized the point the commission should have a plan in place for what would happen if Allegiance left town. Kendrick also brought up the city could use an influx of money and the commission is sitting on more than $2 million. She asked if the commission needed to pay the bills at ESH temporarily, would it need all its funds.
Merry responded the commission is limited in what it can do with its money. The commission abides by a ruling from the attorney general that mandates funds must be spent on medical services for citizens of Eureka Springs. “I don’t want to go to prison for mishandling funds,” Merry commented. He said the city would have to get laws changed to have access to the commission’s money.
Kendrick mentioned she was a lawyer and definitely believes in doing things legally, but told Merry she intends to explore further to see what the city’s options were. Merry had no objections.