At its meeting at the St. Clair County Courthouse in Pell City, the County Commission voted 3-2 to table action on an agreement with St. Vincent’s Health System. The agreement would allow St. Vincent’s to begin construction on a $28.4 million facility on the Jefferson State Community College campus near Interstate 20.
Per the motion of Commissioner Paul Manning, who made the motion to table, the commission recessed its meeting until Friday at 9 a.m. when commissioners will re-visit the motion and likely take action.
“St. Clair County and the (county) Health Care Authority [are] putting $20 million into this project,” Manning said after the meeting. “I just feel like that’s a lot of money for a project to a customer or business to come into our county.
“I just feel like that we’re putting more than our share into the project.”
Commission Chairman Stan Batemon did much of the talking during a work session and meeting regarding the project, and was one of two commissioners to vote “nay” on the motion to table. He told the commission he was happy with the proposal.
“I think this process has been a really good process and I think Jack Welch from GE would be proud of us for going through this process and working it out to this point,” he said during the work session.
The chief sticking point in the proposal is in the last nine years of the lease agreement, when St. Vincent’s would be using the facility rent free. According to a clause in the proposed agreement, St. Vincent’s would pay 10 percent of profits derived from the hospital to the HCA during the nine-year period, with a minimum distribution of $200,000 and a maximum of $400,000.
St. Vincent’s CEO John O’Neil said no money is available to accommodate that stipulation.
“You ask for a preferred distribution,” he said. “We’ll go for that.
“Now let me ask you? If we have any deficits and my auditors prove to you that we’re a well-run organization, will you make up the deficits? I don’t think you want to take that risk. Quite honestly, I wouldn’t take that risk, if I were you.”
O’Neil, along with St. Vincent’s vice president of business operations Kirk Allen, told the commission the negotiations are time sensitive. According to Allen, St. Vincent’s must appear before its parent company (Ascension Health) for final approval on Tuesday, Sept. 1.
“This is not just about a hospital,” O’Neil said. “This is about this community. We all know from an economic development standpoint, people who look at this community in the future are gonna look at education, they’re gonna look at taxes, they’re gonna look at real estate and they’re gonna look at health care.
“You have St. Vincent’s sitting here, ready to make a 29-year commitment, to put $16 million into a facility we are not gonna own. … We’ve put a proposal on the table, quite honestly, that is unprecedented. We’re looking at an opportunity for you to have a hospital here that, literally, could be unmatched by any community this size, anywhere in the country, as it now sits.”
A potential solution, as suggested by Batemon during the work session, may be to dissolve the Health Care Authority entirely at the end of the 20-year lease period. Batemon said the preferred distribution option was proposed because “we didn’t want to leave the Health Care Authority as just an empty-shell entity.
“I know we’ve got a significant number of members of the Health Care Authority that would like to see the Health Care Authority concept go away, but still have a non-profit hospital operating,” he said. “If that ends up being our goal, and we accomplish that, we’ll have accomplished what some of the people want — the county is not in operation of the hospital anymore, other than the lease arrangement.
“My fear was the Health Care Authority wouldn’t have that, but that goes away if we don’t have a Health Care Authority. In my mind, I can resolve that fear. The county then would have the wherewithal to re-market the hospital after 29 years.”
Some of the other commissioners weren’t as amenable to such an arrangement. Commissioner Ken Crowe — one of three who voted to table action until Friday — told the other commissioners he didn’t believe in dissolving the Health Care Authority entirely.
Completion of the hospital project is something that all officials will be vital to future economic development. Pell City Mayor Bill Hereford said he’d lost sleep over the matter.
“I think you’re so close, that the thought this won’t make it, I can hardly bear it,” he said. My great concern is how a failure to do this might affect the VA (nursing home) project. I literally lose sleep thinking about the wonderful opportunity over there, at a time we desperately need it in this part of the county.
“I don’t want to commit myself any further. We’ve gone out about as far as Pell City can go. But we as a mayor and council, and I think as a city, believe in this project so strongly. I hate to say this, but if there’s one other thing that’s on one of your minds — ‘If Pell City would just do this some small something’ — we’re so committed to this project that I’d hate to think there’s something on somebody’s mind that we could do and I didn’t know about and didn’t do it.
“We’re out here, and I guess my attitude is, never say never. If we can help further to make this come to pass, I’ll be happy to go to my council.”
O’Neil informed the commission that it is building more than just a hospital.
“We’re talking about a health system,” he said. “We’re talking about a hospital next to a huge nursing home, combined with new physicians in this community. Without this hospital that nursing home is in jeopardy, and you’ve got Jeff State, and don’t underestimate the need for physicians in this community.
“We need new physicians. This community is very blessed with the primary care physicians it has right now, but it needs additional specialty care. You will not bring those physicians out here, because they’re not gonna come to a facility like the way it is now.”
Allen told the commission that in the last three years, St. Vincent’s Health System had spent more than $21 million for St. Clair citizens (at all of its facilities) for “charity care and uncompensated care,” and that type of care is mostly to blame for the $3 million loss at which the current hospital facility operates.
“St. Vincent’s Health System is at full risk for the operation of the facility,” he said. “If we come in, and year three, four, five, and make our lease payments to you, and we lose $4 million a year, that’s our risk. That’s not a shared risk for the city and the county.
“We’re not coming to you asking for subsidization of charity care. What we’re asking for is the ability to partner in creating a solution that will attract not only those patients who need charity care, but also provide the facilities and equipment to serve those who have the ability to pay, so that we can have a sustainable core for a hospital in St. Clair County.”
Following the meeting, O’Neil said he believed the overall tone was positive.
“I think it’s a great discussion,” he said. “I think this is a huge decision for the county to make, and they’ve certainly spent a lot of quality time in their discernment.
“I think it’s a very positive sign that they’re doing the due diligence so they feel really good about the decision they make. We respect their decision, we respect their process. Hopefully we can answer any other questions they have and it’ll be positive and we can start building a new hospital.”
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