On the day the town of Ville Platte took control of its hospital from Columbia/HCA Healthcare Corp., Linda Deville, the hospital's chief executive officer, started crying before she finished her speech.
"We had many obstacles facing us," she told the crowd through tears. "It seemed like every Friday we had a different hoop to follow, and after a year and a half, we managed to go through all the hoops."
That's putting it politely. Gregory Ardoin, M.D., an internist and pulmonologist at Ville Platte Medical Center, was more blunt. When Columbia started erecting those obstacles, Ardoin told Columbia, "If you don't let us do this, we'll do all our business across the street and this hospital won't be worth anything to anybody."
Astonishingly, he was in a position to make good on his threat. Ardoin had enlisted the help of John J. Burdin Jr., CEO of Lafayette (La.) General Medical Center, 30 miles down the road. Burdin offered to build an outpatient treatment center for the Ville Platte doctors to practice in.
"Finally the man in charge of this project for Columbia realized we were serious about making this a public fight and possibly using an outpatient center and abandoning the hospital," Ardoin said. That particular dispute was resolved within a week, he said.
That's how it went with Columbia in the Ville Platte negotiations, Ardoin and Deville said: tough, exacting, a surprise around every bend. Without leverage from various quarters the community group would have been outgunned, outfinanced and outhospitaled, they said.
"We had one thing in November, then another thing in December and another thing in January," Deville recalled.
Deville attributed all these turnarounds and surprises to the hospital's financial success.
It was "because the hospital was doing very well," she said. "We had 20% growth (in patient census), and Columbia was just loving it." Once the bond issue passed, the locals acted as though they already owned it and shifted their business away from outlying hospitals.
Three other for-profit companies had bid for the hospital, but the community group was the one Columbia chose to negotiate with.
Columbia spokesman Jeff Prescott said that doesn't necessarily mean the community group made the highest bid. "There are things other than the raw dollar amount that go into the determination of what was the best offer to pursue. This was the one that looked best to us," Prescott said.
Nevertheless, Columbia didn't make it easy. At one point the company was so intransigent, "we had to threaten to call the Federal Trade Commission," Deville said.
Without the FTC's oversight, she said, "I don't know that the deal would have gone through. They were fast and furious in their negotiations. `We're going to put your assets in here, and do this and that.' I think they would have pulled us over the wool had it not been an FTC order.
"They thought that with the community buying us, too, we would be less of a threat to them. `You won't have the capital, the finances to back you up. You won't have access to managed care.' That was not the case," Deville said.
The first crisis came, Ardoin said, when Columbia dragged its feet on providing a sale price. To schedule the bond election on the September ballot, the ad hoc committee needed a dollar figure in July.
"We had to have a price," Ardoin said. "Columbia actually was not willing to do that. They gave us a deadline of March 1996 to be finished. They wanted to make the transition in January 1996. They would not come to the table to let us do that."
That's when the group produced the offer from Lafayette General to build an ambulatory surgery center across the street from Ville Platte hospital.
"Had Columbia reneged or not continued to commit to that community, they were going to sell to another proprietary," said Burdin of Lafayette General. "I compete with Columbia pretty aggressively here. Strategically, from our standpoint, if Columbia was going to sell that to a friendly for-profit competitor, I wanted a not-for-profit option in that market and I wanted to work with those doctors in that community."
Burdin wanted Columbia to know he was prepared to create that option with a new outpatient clinic for Ville Platte's medical staff.
"They came in the next week," Ardoin said. "We negotiated from 8 a.m. to 2 p.m. and finally came up with a deal that satisfied all parties. That was July '95.
"Two weeks after we did the deal, Columbia called and said, `There's a problem. We underbid for $1.5 million.' We would have to come up with 1.5 million more dollars, which was not possible. They knew what our maximum was. We said, `You can renege if you want.' They said, `No, we won't,'*" Ardoin said.
"In the end they came through and did the right thing," he said.
Prescott said the negotiations lasted "about the same amount of time that typically we take. It wasn't an inordinate amount of time to negotiate this. The price was set through an open bid process. We put it out for bid and the bids came back. We didn't drag our feet on pricing."
Medicare recapture tax was another area of confusion. That's a "shared responsibility," Prescott said. "Pending the final completion of all the Medicare forms, that is still an issue that is not determined."
At first, Columbia wanted to do a stock sale, where there is no recapture tax, Deville said. But counsel advised that was not possible with a bond sale.
The actual amount of the Medicare recapture tax won't be known until the final cost report is filed, within 150 days of the end of the fiscal year, Deville said. It is projected to be between $500,000 and $1 million. Columbia and Ville Platte agreed to split it, up to $500,000. "If it's more than that, they have to eat it," Deville said.
"They were delaying and delaying," she recalled. "We have a little money left over. We capped it at $500,000. They got a half a million more than they should have gotten."
But that wasn't the end of the story, Deville added. "They called me. They said, `You owe the federal government another $2 million.' We almost had another major dispute at that point in time," she said.
In November Columbia announced it wanted to close the deal by Dec. 31, 1995. For Ville Platte, that posed an accounting difficulty because the employee benefits hadn't been added up. So Columbia agreed to make a provisional arrangement to, in effect, allow the hospital to rent the employee benefits and pay them later.
"On Dec. 15 we get a call from a lady in data processing at Columbia," Deville said. "She said, `On Dec. 31 all your benefits are going to be terminated.' We were scurrying around*.*.*.*"
Fortunately, the federal government was shut down at the time, so the Internal Revenue Service was behind in processing the hospital's new tax status. That allowed time to work out that problem.
The tortuous turns of the negotiations were especially hard on Deville. As a lifelong resident of Ville Platte, she wanted the community purchase to go through, yet at the same time she was a Columbia employee.
"I was like, `If y'all don't like what I was doin', y'all just terminate me.' I was at that point in life where I could be a little independent. If they would have put another administrator in, they said it would have been detrimental to the facility. It was stability within the organization" that Columbia needed at the time, she said.
"I felt like I was very fair to both. I don't have any regrets over some of the decisions that were made. We protected their assets. We felt like we did a darn good job," Deville said.
At the end, just before the handover on Sept. 1, Columbia asked Ville Platte to reword the press release, saying that "anything in the national media could affect the stock price," Deville said.
"They don't want this to be very public. They don't want them to know that a small community is succeeding," she said.
