Hospital board rejects Banner buyout offer
Via Christi proposal
is on the s'back burner'
Saying negotiations were unproductive, Marion County Hospital District No. 1 board on Thursday officially rejected an offer to buy out its lease with Banner Health System.
It means the hospital will remain with Banner through Dec. 31, 2004, when the current lease ends. It is not expected to be renewed.
Banner leases St. Luke Hospital and provides management services. The company announced late last year that it was divesting itself of rural facilities in favor of aggressive growth in urban areas.
St. Luke is profitable but it wasn't profitable enough for the plans of the Banner team, officials said.
Banner wanted to end its lease early this year, but its agreement with the board had no early-termination clause, officials said. The company then offered an undisclosed sum of money if the board would end the lease early.
Doug Newman, hospital administrator, said Banner's offer "was inadequate to sustain operations for 120 days, which was the target."
"It's important for the public to know that it was our decision to reject their offer and continue with the existing lease," said Peggy Blackman, board member. "It was the choice that was best for the district."
Reporting to Greeley
Ellen Cooke, Banner vice president, said the corporate office overseeing St. Luke would be in Greeley, Colo., by mid-March.
"They're excited to have Marion in their region," she said. The division has 10 rural hospitals in Colorado, Wyoming, and Nebraska.
Employees will see little change but department heads will be contacting new people in Greeley, Cooke said. The transition has started already, and face-to-face visits and training are expected through the rest of the month and into February.
Most of those facilities of which Banner is divesting itself are company-owned, Cooke said. Of the handful of leased facilities, some are ending leases early through buyouts or termination clauses.
The other Banner facility in Kansas, Decatur County Hospital, Oberlin, will become fully independent in March.
Via Christi option
Discussions of a proposed lease agreement between St. Luke and Via Christi remain an option, Newman said.
"We will keep meeting but it will be on the back burner for a couple of years," he said.
Newman noted that Via Christi, which owns all its facilities, was impressed by St. Luke and intrigued by the possibility of entering an agreement with a stable facility. However, the company was not yet ready to provide the specific type of corporate assistance in which the board was interested, such as managing payroll and benefits.
"Their facilities are so decentralized, it would be tough for them to add us right now," Newman said. "I think this has led them to do some thinking — do they really need seven of everything?"
In the meantime, the board will spend the next three years investigating all options so when the Banner lease ends, the facility can flow seamlessly to its next arrangement, whatever it may be.
"We need to look, and I mean starting tomorrow," Blackman said. "That time will get away from us."
