L&D looking at co-op
Published 3:24 pm Friday, May 6, 2011
A committee charged with finding a way to salvage the hospital’s labor and delivery has taken a huge step toward doing just that.
Friday the committee was presented with an idea best termed as a “cooperative” between the City of Demopolis, the county, the hospital and the doctors.
Under the terms of the agreement, the doctors who practice in the labor and delivery unit would agree to put up $100,000 collectively; the city and county would put up $100,000 collectively and the hospital would continue to pursue $75,000 to $100,000 in expense reductions.
With all players in the game “all-in”, the hospital would agree to keep the unit open for the immediate future.
“What this would do is give us some breathing room,” said board member Jay Shows who proposed the idea. “It takes the deadline off the table and keeps the unit open while we work on other expense savings and revenues.”
Shows said he envisioned the idea as a one-year stop gap, giving the hospital time to realize expense savings currently underway while giving revenue generation strategies time to be implemented. Even though the monies raised through the cooperative were less than the operating loss of labor and delivery, Shows said he felt that offsetting much of that loss, combined with increased revenues and expense cuts over a 12-month period, would position the board of firmer financial footing.
“I think, and I’m not speaking for the board, but I think we would be in position to absorb a $200,000 loss knowing we’ve got other things in the works in other areas,” he said.
The meeting broke with each interested party agreeing to meet with their respective constituents and peers and report back at their next meeting in two weeks.
The only party who made a commitment Friday were the doctors, who agreed to enter the partnership.
The hospital’s labor and delivery unit was marked for closure as part of a $3.2 million expense reduction plan in March.
The idea of a cooperative is an offshoot of the idea of forming a Limited Liability Corporation (LLC) between the doctors and the hospital, which was presented at the board’s last meeting. Forming an LLC was complicated by consulting and legal fees upwards of $250,000, which would be necessary prior to operation. Projections for the first year of a maternity care LLC show the venture was likely to lose more than half a million dollars in it’s first year.