Tuesday, January 03, 2006

Where are we?

Essent can't be held blameless for what they face, the previous management certainly provided the components for disaster. Essent just bought the package and stirred it.

When Christus St Jo bought Big Mac, the formula for disaster was essentially complete. Why anyone would think that one hospital that was losing money could buy a second (that was also losing money) and end up with a viable enterprise, is beyond me...and was beyond Christus, obviously, since they sold it.

'Essent'ially, you have one hospital financing the overhead of what would be two. And, the evaluations placed on the properties weren't terribly favorable to Essent. In going from a non-profit to a for-profit, what's good is bad. While a non-profit enterprise inflates the value of the real property to look larger for "status" among its peers in the same organization, they don't pay property tax. When a for-profit purchases the same enterprise, it is in their best interest to have it under evaluated for the lower tax liability. All those under-occupied/empty facilities that the hospital owns are where the employee raises have gone. Essent might have tried for a tax reassessment, but apparently did not.

There was talk of a new hospital/expansion of the "North Campus" prior to the sixth floor revamp. We haven't heard much on that vein lately. With the financial wreckage of Crossroads Medical Center in Missouri hanging over the corporation, it would seem unlikely. They lost money in four out of five years that they owned it and probably unloaded at a loss.

What is foretold in our future? We currently have one hospital that runs at approximately 80% capacity where we used to have two running at over that mark. That doesn't bode well for a significant raise--hence the exodus of qualified personnel. If they sell the hospital(s), the new owners will, in all probability, have to watch their pennies because of the initial outlay. Again, no or low raises, and more qualified people leaving. The nursing shortage has already periodically closed floors and ER-2, on occasion.

A lot of people feel that Baylor or Presby, or Methodist would be a good choice as a buyer: deep pockets and an excellent referral program...the referral base is what we would become. Rather than growing, the specialties would diminish, with the patient referrals moving in one direction: West.

It's really a shame that a hospital with a servicing population of approxiately 125,000 can't stand on its own. And it's also a shame that someone doesn't exist that could pull off what was done so many years ago when McCuistion was created.

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