Murray Medical enters ‘new era’

CHATSWORTH — CHATSWORTH — With an agreement signed by Murray County Sole Commissioner Greg Hogan and representatives for Murray Medical Center, the Murray County Hospital Authority and Hamilton Health Care System, one leader spoke of a “new era” for the Chatsworth hospital as it attempts to stand alone as a health care facility.

“I’m excited because we’ve got a new era for the hospital,” said Roy Orr, a former employee of the hospital who was tapped to become the CEO on Monday night by the Hospital Authority. “It’s a new beginning, a new chance.”

Orr, who worked at the hospital from 2000 to 2002, has been back at the facility for the last eight months as a consultant.

At the public meeting hosted by Hogan on Tuesday, the particulars signed a term of release that also approved a guaranty of $2.5 million on a promissory note from the Hospital Authority to Hamilton Health Care, approved a transaction term for Hamilton to hold a second lien on Authority assets, and gave the go-ahead for a line of credit of $2.5 million for the Authority.

Authority Chairman Randall Richards, who took over the chairmanship from Rick Bagley, said the hospital, known as Murray Medical Center Inc., would now drop the “Inc” and be known as Murray Medical Center.

“At 12:01 (Wednesday) morning, Murray Medical Center took over operation of the hospital ... (and will be) operated by the Murray County Hospital Authority,” Richards said after the agreement was signed. “We’re working on being able to work on all insurance. We need the support of Murray County, and we feel like we can provide good service to our citizens and they’ll feel like they’re with people who love them.”

Richards was asked if the new MMC was looking to partner with any other hospitals or health system corporations.

“At this point, we’re simply looking at taking over the hospital, running it on a day-to-day basis, being sure that we keep our cash positive and being sure we run it so everybody’s happy,” he replied. “We want to get our customer satisfaction up and cause people to want to go to the Murray County hospital when they need that service.”

Orr said the Authority owes Hamilton Health Care “some money” and the second priority lien on Hospital Authority assets gives Hamilton “assurances.”

“The county has first lien on the hospital property, but Hamilton wanted second lien rights to protect that note,” he said.

Hogan told Richards he wanted “stipulations in place” regarding the line of credit and added he was willing to work with the Authority and the bank.

“I want to know what’s going out and when it’s going out,” he said. “I’ve got faith in this hospital that it can make money. Murray County needs a hospital.”

County Finance Director Tommy Parker asked Orr and Richards if “receivables” had been defined in the agreement. Richards responded they were and that the new Murray Medical’s computer system would take over at midnight and Hamilton would not have access to their system.

The $2.5 million line of credit — which must be repaid by the end of the year — will help Murray Medical with cash flow since Medicare takes 90 days to receive a bill and then return payment on it, Parker said.

The county was represented by attorney Greg Kinnamon and Hamilton was represented by John Minor V.

The background

In June of last year, Hamilton Health and the Hospital Authority mutually agreed to part ways after the Chatsworth hospital had been managed by Hamilton for more than a decade.

“We hope to improve the financial situation of the hospital,” Bagley said at the time. “Last year around this time, we were in something of a crisis. The hospital had been losing money.”

At that time, Murray Medical was on a path to lose $2.4 million for the year. In August of 2010, officials cut 16 positions in an effort to reduce costs. And the Hospital Authority agreed to pay $255,000 to cover the hospital’s operating deficit.

“We have not had to put in any additional money since that time,” said Bagley in June. “Things have turned around enough that the cash flow covers the operational needs of the hospital.”

But the review the two sides conducted in 2010 led members of the Hospital Authority to believe Murray Medical might be better off as an independent. An agreement was hoped for in December, but both sides agreed they needed extra time to work out more issues included in the dissolution agreement.

Staff writer Charles Oliver contributed to this story.

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