Cox says hospital loan 'on track'

Eureka Springs Hospital Administrator David Cox continues to assure members of the Hospital Commission that "everything is on track for the loan" to build a new hospital.

Meeting Monday morning for the first time in almost a year, Cox told four members of the commission and Mayor Kathy Harrison, "The loan is progressing well. The USDA (United States Department of Agriculture) has every bit of information needed to process the loan.

"I have been told by a member of the USDA team the paperwork has gone to Washington, D.C., for review and final approval.

"We won't have a loan until we get a conditional letter from Washington, but we have no reason to believe it won't be approved."

The $9,625,000 loan is to build a 22 bed hospital on Passion Play Road, adjacent to the Eureka Family Medical Center.

Cox said Monday approximately $3 million would be for land and clinic acquisition, architectural plans and specifications, loan fees, etc. The remaining $6 million would be for actual construction.

Architect Laura Morrison and Project Manager Charles Morrison of Morrison Architecture of Holiday Island presented some "very preliminary sketches" to the hospital commission in May of last year.

In their plan, the new building will be on two levels. The patient rooms, surgeries and emergency areas will be on the level where the existing clinic is now.

The kitchen, mechanical rooms and support spaces will be on the lower level, at the back.

"There will be about 19,500 square feet on the main level, and about 4,800 on the lower level," she said.

"We will be remodeling part of the existing building to add more space to the x-ray/imaging department. There will also be a small gift shop space and possibly a snack bar."

That was as far as Morrison was allowed to go with her designs.

Cox and the hospital commission have been nearly silent on the project since.

Cox has refused Freedom of Information (FOI) requests, saying "the information is privileged because it is proprietary and the hospital is in negotiations for the loan."

No plans have been completed for the project, although Laura Morrison was named last summer as a member of the board of directors for Community Health Resources, Inc., the name of the loan applicant.

Other members are Dr.Dan Bell Bill Bradley, CEO of Northwest Medical Center in Springdale and Bentonville, competing hospitals; and Mark Bevers, administrator of Northwest Medical Center.

The initial loan application was denied in September of 2003 by Tom Tougaw, a rural development manager in the U.S. Department of Agriculture (USDA) office in Harrison.

He said he saw a "lack of repayment ability and lack of community support."

An appeal hearing was held in Maumelle, Ark., in October and the denial was eventually overturned. The waiting has continued.

An opposition campaign to the new facility has been mounted by representatives of St. John's Hospital - Berryville. That 50-bed facility is having financial difficulties.

Several Carroll County officials have said the county "cannot support two full-service hospitals and expect either one to prosper."

Cox presented a financial report to the commission Monday morning showing a net income of $177,824.53 for 2003.

The hospital had a total gross revenue of $6,014,230 for the year. With deductions for contractual and other adjustments, the figures show a total revenue of $4,282,377.44 for the year.

Total expenses for 2003 were $4,112,223.87, including more than $2 million for salaries, wages and employee benefits.

Asked if the $177,824 would be enough to pay back a $9 million loan, Cox said, "No, but we expect to be able to generate more revenue with a new hospital and more doctors. We hope to have several consultants who will use our new hospital.

"We will also review and adjust our charges for services. We are at the bottom end of the fee schedules for hospitals in Arkansas," he said.

Acting Commission Chairman Bill Fort commented, "We have several doctors waiting in the wings to come to the new hospital."

A large portion of the funding for Eureka Springs Hospital comes through the Medicare Critical Access program. It is a federal program designed for small rural hospitals that allow a greater Medicare reimbursement on charges.

Cox said the new hospital would also be eligible for federal grant programs.

"Carroll, Madison and Newton counties are classified as medically undersized," he said. "We qualify because so much of our patient dollars go out of Eureka even though we have good medical services here."

There is one position vacant on the commission. Anyone wanting to serve should contact city hall about filling out an application. The mayor nominates commission members and the city council appoints.

Diane McClelland, commission member for more than 20 years, resigned March 16.

Fort said pressures "over this situation" and her duties with her job as a vice president of the Bank of Eureka Springs were the reasons for her resignation.

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Cox says hospital loan 'on track'

Eureka Springs Hospital Administrator David Cox continues to assure members of the Hospital Commission that "everything is on track for the loan" to build a new hospital.

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