KREMMLING — Although the Kremmling Memorial Hospital District board is still expecting to create a management agreement with a larger health system, they’ve put off making an official decision for another month.
Talks of a management agreement followed financial troubles that have bogged down the district soon after its Middle Park Medical Center facility opened in Granby in January 2012. It means a larger health system, most likely Centura Health, will assume leadership and direction of the district through its own chief executive officer. The district’s board of directors would still retain authority, however.
Although the board was expected to sign off on the management agreement during its regular meeting last week, district officials are still waiting for direction from its bondholders before proceeding. Two board members met with bondholders on March 10 and went over revenue, cash cycles, system upgrades and the Centura relationship. They also discussed a forthcoming report by the bondholders’ consultants which will give the formal “seal of approval” on the management agreement.
Those bondholders own the municipal debt the district used to construct the Granby medical facility, debt with liquidity covenants the district has had trouble fulfilling. Last Novemeber, the hospital district went into an “event of default” when it missed its base rental payment and had to draw funds out of its reserve. Earlier this month, the Sky-Hi also found the district wasn’t meeting its “cash on hand” obligations.
“As you are aware, health care is a difficult industry to navigate and more and more hospitals are finding it increasingly difficult to meet all the requirements and demands that are being placed on them,” the district’s CEO, Cole White, said in an email. “Affiliations, partnerships, joint ventures and management agreements are being used to help improve operations, reduce costs, improve compliance, advance clinical outcomes, and improve overall performance.”
White said the board expects to finalize an agreement with Centura Health sometime this month, either at its regular monthly board meeting, scheduled for 6 p.m. on April 23, or at a special meeting.
According to White, the management agreement contract means Centura will employ the CEO and possibly the CFO. The CEO will be required to report to both the hospital district board as well as Centura.
Leia Larsen can be reached at 970-887-3334 ext. 19603.