The most important decision in 100 years: Will Jackson County let Singing River sell?

Administrative leaders of Singing River Health Systems discussed its plan for a sale or merger of the county-owned hospital system in a 45-minute presentation at Monday’s meeting of the Jackson County Board of Supervisors.

The county supervisors have not approved or voted on the sale. Supervisor Randy Bosarge said he expects there will be “multiple public hearings” held before a decision is made. The county will also hire an independent company to evaluate the hospital and its proposed sale.

The decision whether to sell could also rest with Jackson County voters if 1,500 signatures are collected in support of a referendum, an effort Bosarge said he would support.

The stakes of such a decision will be high, not only for the 4,000 employees of SRHS but also the citizens of Jackson County.

“It seems like we’re going to step out together on a journey that is probably as important as anything the county has done in the last 100 years,” supervisor Ken Taylor said in the meeting while addressing the SRHS administrators.

Why is Singing River seeking a buyer?

Tiffany Murdock, Singing River’s interim CEO, said the proposal is the result of four years of conversation about the hospital’s future.

Erich Nichols, president of the hospital’s board of trustees, said while the hospital is in relatively sound financial shape today, it is clear that costs are mounting, putting Singing River in need of “a capital partner.”

Nichols described searching for another hospital system to buy or incorporate Singing River as a way to avoid eventually having to ask the county to be its capital partner, which would involve raising taxes on Jackson County citizens.

“It’s in our best interest to start exploring some of the other options while we are strong,” Nichols said. “The worst thing we could do would be to negotiate from a position of weakness, where our assets are further depleted.”

The challenges facing Singing River include factors like rising drug costs and staffing shortages which affect health care nationwide, and particularly burden smaller community hospitals like Singing River.

“The business of health care is changing,” Nichols said.

Because hospital systems nationwide are consolidating, Nichols said, “the county hospital model is sort of by the wayside in a lot of states. And as a lot of these systems get bigger, you have more bargaining power in their ability to deliver health care. We we are at a disadvantage there.”

Millions in Medicaid funding owed

In addition to rising costs, Singing River’s projected financial challenges include liabilities of “close to $25 million” in Medicaid funding it has to pay back because of a change in federal policy which the hospital argues unfairly penalizes it for reducing costs, Murdock said.

Singing River receives millions in federal grants annually under a program benefiting “disproportionate share hospitals” (DSH), because it has a disproportionate share of patients on Medicaid.

But beginning in 2017, the DSH payment program instituted a policy of auditing payments after they were made by evaluating the hospital’s costs to determine if it was overpaid.

Because Singing River implemented cost-cutting measures in 2017, the hospital was determined to have been overpaid each year since then.

The overpayments will be recouped by deducting the amount from future DSH payments to the hospital.

Singing River is taking legal action to appeal the policy change, Murdock said.

Will a sale affect Singing River pensions?

In the period of public comment following Singing River’s presentation, several speakers demanded that some of the profits of any potential sale go toward increasing the pensions of retirees, who settled with Singing River after a long-running lawsuit over a failed pension plan.

Taylor said he thought this was a good idea.

Taylor asked a pointed question of Murdock during her presentation. Noting that the hospital currently owes nearly $70 million to retirees, he asked, “Is any of that in any jeopardy, in your opinion, as you stand here today?”

“No,” responded Murdock. “I mean, no matter what we do, whatever we decide to do, we will take care of that settlement.”

What happens next

At the meeting, Jackson County board attorney Gary Evans laid out the statutory process for how the county would go about deciding whether to sell the hospital.

First, Evans said, the county needs to “make a determination that it may be in the best interest of the people that are being served by the hospital system to sell the hospital.”

In order to do this, the county must hire a firm to “examine the operating conditions here at the hospital” and file a report.

Next, if the county wants to go forward with the proposed sale on the basis of this report, it must hold a public hearing. It is required to give citizens three consecutive weeks’ notice prior to the hearing in the newspaper.

Citizens seeking a referendum on the sale would then have 21 days after this hearing to present the board of supervisors with a petition with at least 1,500 signatures to trigger a public vote. If the signatures are not presented, the county can then put out a request for proposals to seek and evaluate potential offers for the hospital.