Healthcare Authority considers buyback of hospital

Published 12:00 am Tuesday, July 8, 2003

County Manager Alex Dudchock has requested a meeting between county officials and Baptist Health System to discuss the future of the Shelby Baptist Medical Center.

With the recent announcement that BHS will &uot;pursue a relationship&uot; with for-profit Triad Hospitals Inc., county officials are exploring the possibility of retaining control of the hospital, should a sale occur.

The Alabaster hospital was originally sold to BHS in 1996 for $45 million, but the Shelby County Healthcare Authority retained the rights to buy back the hospital should it become part of a for-profit operation.

The BHS Board of Trustees has been exploring a possible sale or merger of the system and its 10 hospitals, and voted June 18 to enter discussions with Triad, a Texas-based company which owns 49 hospitals and 14 ambulatory surgery centers in 17 states.

However, no details have been announced about the nature of the &uot;relationship&uot; between BHS and Triad.

In a written response to Dudchock’s request, BHS President Dennis Hall said: &uot;The leadership of the Baptist Health System is certainly willing to talk with your group. But in light of the status of the current discussions, I would suggest that we wait until we know exactly what strategic direction our Board of Trustees chooses.

&uot;As soon as we have something definitive to share, we will contact you to make sure you have all of the information you need to make an appropriate decision for the citizens of Shelby County,&uot; Hall stated in the letter.

If BHS were to sell and the county wanted to retain control of the hospital, it would have to be purchased by the Shelby County Health Care Authority, said county attorney Frank &uot;Butch&uot; Ellis.

&uot;The Healthcare Authority owned the hospital to begin with,&uot; Ellis said. &uot;They would be the ones to buy it back.&uot;

The Shelby County Health Care Authority was a committee appointed by and operating under the County Commission.

According to the terms of the original sale to BHS, the authority would have six months to exercise their purchase rights should BHS sell to a for-profit group.

However, Ellis said, the authority would have to come up with the finances in order to buy and maintain the hospital.

The Shelby County Healthcare Authority was never dissolved following the sale, but they currently have no assets or legal responsibilities, Dudchock said.

The money generated from the original sale to BHS was placed under control of the Community Health Foundation, a five-member board made up of county commission appointees and representatives from the medical center.

The authority could ask the foundation to help finance a buyback, Ellis said, but he noted the foundation would have no obligation to provide the funds.

Ellis said there are other options such as the designation of a 4-mill tax, like one which was previously given to the healthcare authority to finance hospital expansion.

He said the idea of a buyback is not out of reach, if the hospital is sold to a for-profit group.

&uot;I think its possible,&uot; Ellis said, however, &uot;first thing, there has got to be a triggering event to do that.&uot;