Stephens Co. Hospital Asks Commission to Back $15 Million in Bonds

Stephens County Hospital is asking the Stephens County Commission to back $15 million in bonds in an effort to try and turn around the hospital’s financial situation.

The county commission and Hospital Authority met Tuesday night in a called meeting.

Hospital officials are asking for $5 million of that $15 million to be in the initial form of a short term loan borrowed by the hospital and backed by the county to help cover immediate operational costs. Meanwhile, another $3.8 million of that $15 million would be re-financing of current hospital bonds, leaving the hospital the rest to invest in technology, equipment, office space and other needs that the hospital said it needs to try and be more profitable.

This comes after the hospital lost more than $4 million last fiscal year and has not yet received money from Medicare and Medicaid that the hospital said should total $4 million, creating a short-term cash problem now.

Along with that, the hospital has continued to report negative bottom lines each month.

Hospital Authority Chair Mark Wilkinson said moving forward with the bonds would give the hospital some flexibility, rather than forcing its hand now to look for buyers.

“$15 million, when everything is said and done, if we see we are getting close to that and we do not do it, we are going to look hard to sell it,” said Wilkinson. “We cannot go out of business because we do not have any money. If we have a fire sale, everybody is going to get burnt.”

Stephens County Commissioner Dean Scarborough said his main concern is the sustainability of the hospital.

“What is the sustainability versus selling now?” asked Scarborough. “That is my biggest question.”

“Are you telling the citizens of Stephens County you want to sell right now?” asked Wilkinson.

“No,” said Scarborough. “I have looked at this … I do not see a way out of it.”

Wilkinson said the hospital needs an opportunity to try.

Hospital officials said they are already working on cutting costs and trying to bring in more revenue by adding doctors, but those revenues take time and the start-up costs of adding doctors has been costly to the hospital.

In the worst case, Wilkinson said that the bonds would buy the hospital time to explore partnership and sale opportunities if they could not turn it around.

Hospital Authority Member Stan Roberts said that a sale would in all likelihood pay off any debts that the county would be on the hook for.

“I cannot imagine us not being able to survive that and to be able to sell where the county did not have to pay anything,” said Roberts. “I think that is where we are all coming from. In the absolute worst case, the county is probably going to end up with some money in their pocket if we have to sell, if we cannot get it turned around … I realize that is not a guarantee.”

Wilkinson said that Habersham Medical Center, with 40 fewer beds than Stephens County Hospital and more debt, is selling for $24 million to Northeast Georgia Health System.

County commissioners approved a motion unanimously to move forward with the intent of backing up to $15 million in bonds, $5 million of which would initially be a short term loan borrowed by the hospital and backed by the county.

Commissioner Stanley London made the motion.

“Honestly, when I came into this meeting tonight, I did not think I would be saying this,” said London. “I think that it is a win-win for the county. Hopefully, this makes it as Stephens County Hospital. Regardless, with the additions to the bond that they would be retired immediately upon the sale, I think it is a win-win.”

Wilkinson said the county’s support gives the hospital options and time.

“This will help us to try to get our feet back on the ground and see what we can do and we have a lot of different options we are looking at and see if we cannot get it turned around for the hospital,” said Wilkinson. “All options are on the table.”

He said the Authority’s goal is to have the best hospital in Stephens County for the people of the county.

The commission’s motion does not grant final approval to anything, but just allows the hospital to move forward understanding the commission’s intent.

The final terms of any loans or bonds backed by the county must come back before the commission and be approved before anything is finalized.