On June 2, the Eureka Springs Hospital Commission, meeting via Zoom, approved a new contract with Alliance Management Group, LLC. Alliance has completed its six-month contract with the commission to transition operations from the previous service provider to the city’s control and now offers services in a more permanent capacity.
The contract states that the day-to-day operational management of ESH’s critical access, clinical and outpatient services will be provided by Alliance for three years, from June 1, 2020 through May 31, 2023.
According to the contract, operational management includes “full authority to conduct, supervise, direct, and manage the entirety of the day-to-day operations of the Hospital and Hospital Personnel.” The commission, by contract, will not interfere with Alliance, but in the event of a disagreement, the commission can override authority with a unanimous vote.
Alliance agrees “to operate the Hospital in a cost-effective, efficient, orderly, and safe” manner. Additionally, Alliance will prepare an annual budget, and an annual plan of goals for commissioners’ approval with no fewer than monthly reports.
The budget shall include Alliance’s revenue projections, operating expenses, and capital expenditures.
Alliance is to work with the commission to establish a three-year strategic plan for long-term capital improvements, such as building additions and repairs. The agreement can be terminated by either party without cause upon a written notice of 180 days.
The monthly management fee is the greater of $25,000 or 7.5 percent of net revenue provided that it will not exceed $50,000 for any month.
Commissioners approved the contract with one opposed, Dr. Tyson Burden whose contention was with the size of the management fee stated, “It’s too high, it’s crazy high. To me it needs to be something a little more reasonable.”
Mark Stearns of Alliance said he did not believe the fee is exorbitant, adding that the true winners of this contract are the hospital and patients. Darrell Parke was glad to get past the contractual deliberation as he is eager to focus on continued stabilization and eventual growth of the hospital. He said the two members of the executive team of Alliance Management Group, he and Stearns, commute daily to ESH from Tulsa. Parke indicates an interest to relocate to the area.
The next meeting will be Monday, June 15 at 6 p.m., and it is expected to be open to public attendance.
Will all of the current staff switch from being employees of ESH to being employees of Alliance?