The Pineville Hospital, currently operating as the Southeastern Kentucky Medical Center, may soon be closing its doors. But the City of Pineville and Mayor Scott Madon are working hard to try and keep that from happening.
Basically, the city would be willing to step in and help manage the hospital on a temporary basis while seeking new permanent owners. But there are several factors at work that complicate the issue and they will have to come together in a short time for the city to step in.
The hospital been dealing with financial trouble from some time and things appear to be coming to a head as employees at the facility haven’t been paid in over a month. An emergency city council meeting was called for Thursday morning after Madon learned that most of the employees were threatening to leave if they weren’t paid. Without employees the hospital would be forced to close it’s doors.
“The hospital is in dire straights. We’re in the worst situation that we’ve ever been,” Madon said on Thursday. “The employees have not been paid again and (Friday) will make two pay periods. We’ve got a decision to make — we can either step in and try to prop it up until we can get somebody to run it or we can let them close it in the next few days.”
The council authorized Madon to gather information and seek approval from bankruptcy court in an effort to keep the Hospital from closing.
Mark Hunter, who oversees the radiology department at the hospital was at Thursday’s meeting.
“I think it’s going to be a moot point after (Friday). If we don’t get a paycheck I would assume that most — I mean all of my employees have told me they won’t be back,” he said. “I’ve been taking care of people around here for about 28 years. I do understand people saying ‘Why are you still there?’ (But) we need our hospital.”
If enough employees decide not to come back to work the hospital would be forced to close and it might not be possible for it to re-open.
“If the hospital were to close for 24 hours, it would have to go through a re-inspection from top to bottom and the chances of it passing are not very likely,” said Alicia Slusher, who handles public relation for the hospital and is also on the city council. “Even if someone was interested and the hospital closes for 24 hours it would have to go through that inspection. It could cost $30 million just to fix the building and get everything up to code.”
Americore Health, the company that had been running the hospital has been dissolved. CEO Grant White still holds the Certificate of Need for both the Pineville Hospital and nursing home.
“We’re to the point where he has agreed to surrender those but there are some stipulations he has asked for. I’m not real happy about them but if we can negotiate to try and get what we want I realize we’re going to have to give something up,” Madon told the council. “I’m not ready to share those until we have everything in writing and we get it to Grant and we have the exact terms of what he’s asking for.”
Madon also told the council he had spoken with First State Bank about the city borrowing money to meet the hospital payroll and keep the facility running until a new owner can take over.
Along with White and the city agreeing to terms, the transaction would also need to be approved by bankruptcy court.
“I just got off the phone with the bankruptcy lawyer that represents the Trustee. They would have to approve us, if they didn’t and we got involved it could be money down the drain,” Madon said. “The dark side of this is if we go borrow the money and this thing goes down the citizens of Pineville will have to pay it back and we’ll have to raise taxes considerably. That’s the danger.”
Madon said he had contacted people that were interested in purchasing the hospital to see how quickly they could move forward. His plan would be for the city to step in for just a short time to stabilize things at the hospital and then pass the hospital on to a new company.
“I would be trying to update them and hook them up with somebody to pass the torch with and get it out of our hands. I don’t think any of us have any desire to manage the hospital,” he said. “We had a group that was very interested two months ago, but when things get put off for so long people lose interest. We might possibly be able to get them back to the table.”
The hospital is currently $400,00 behind on its payroll and Madon said there are currently 135 employees working there. He talked about borrowing $1 million but said he wasn’t sure of the exact amount the city would have to put into the hospital.
“My first goal would be to try and get the employees paid. Again, I have to take direction from the bankruptcy court to see what we should be paying and what we shouldn’t be paying. There’s a large bank note that’s due monthly and other than that we’d be looking at just the basics,” he said. “I can’t really put a dollar figure on that and it would also depend on how long the city would be involved. It could get up there real quick, that’s the danger of trying to get involved.”
But without stepping in, the city risks losing the hospital forever.
“We all know how important the hospital is to this community. It’s not only our largest employer, but most folks don’t understand the trickle down it has for our local economy,” Madon said. “It’s not just the Pineville Hospital, it’s our restaurants, it’s our gas stations, it’s our schools and our businesses, our property values. This is bigger than just (Grant White) and the things that could happen.”
The council has not committed to borrowing any money yet. They simply authorized Madon to continue exploring what the options are to for the city to help. Patricia Bingham made the motion, Shawn Fugate seconded it. They and council members Scott Jeffrey and Ben Madon approved the motion with Slusher abstaining. Tuck Woolum was not present at Thursday’s meeting.
At Monday’s meeting, Madon and council met in executive session for about an hour discussing the situation. No action was taken on the matter when the meeting was opened back up to the public.
“The council is in agreement with me to continue to work toward finding a resolution for the Pineville Hospital. At this time we’re not ready to make a decision whether to take the over or be part of it. We’ve taken no action on the hospital,” he said.
As of Monday evening the city’s lawyers were waiting to hear back from Grant White’s lawyers to see if the two sides could come to an agreement on the framework of a deal to put the hospital’s Certificate of Need in the city’s hands.
Last week Madon spoke to officials at First State Bank, who holds the lien on the hospital, and got their input on the situation. He also met with the hospital adminstration to go over financial records and make plans to boost revenue at the facility.
“We have things in place at this hospital that we could engage and start increasing revenue that would make it a viable hospital. But it’s got to have some stability and it’s not had that in a long time. These workers have got to have some calm about them to know that every day they come to work might not be their last day,” he said.
As of Wednesday the hospital and its emergency room were still open but the city council had not scheduled a special meeting to take further action. Madon acknowledged that each day that passes makes it less likely that the city will be able to step in.