For almost a year, the community of Cookeville, Tenn., has been embroiled in a vigorous and complicated debate over whether Cookeville General Hospital should be leased or remain under local control and governance. On Nov. 5, the voters of Cookeville will decide the issue. This commentary places the Cookeville situation in a national context.
In the past few years, quests for dominance of local healthcare markets have caused upheavals in the delivery of community-based healthcare. Because of an insatiable desire to grow, hospitals wishing to build large statewide systems have been offering huge, unsolicited amounts of money for small or medium-sized publicly owned hospitals.
For nearly a year, I have been caught up in such a situation, ever since the Cookeville City Council agreed to accept bids for city-owned Cookeville General Hospital, where I am administrator.
As happened in our community, elected officials are often dazzled by dollar signs and lose sight of the long-term effects a sale or lease will have on patients and the community. They're often willing to trade local control of healthcare for the chance to provide other community services without raising taxes.
At first, community hospitals that sought outside buyers or tried to lease were financially weak and looked to new owners for survival. Most of the buyers were for-profit conglomerates. Now, however, as in our situation, not-for-profit corporations also are bidding on community-owned facilities. The more prosperous the hospital, the more desirable it is.
We have tried to assess the long-term economic impact of a sale of our hospital on the Cookeville community. Economists can debate the validity of our consultant's model until the cows come home, but the basic premise is sound: A large urban hospital is going to expect a return on its investment in Cookeville, and that return will come out of our pockets, not theirs. The only difference between for-profits and not-for-profits is the size of the return they expect.
According to our suitors, our 227-bed hospital was worth $16 million in 1989, $65 million in 1993 and $144 million in 1996. In the past four years, our annual earnings have increased to $7.8 million from $1.6 million. Our bond rating has improved to A from A-, and 35 physicians have been recruited to Cookeville. We have been granted four major certificates of need, including a cardiac catheterization lab, a $20 million expansion program, a comprehensive cancer center and, most recently, open-heart surgery services.
This is not the first time Cookeville General has been pursued. A consequence of our development as a regional medical referral center has been a greater vulnerability to being placed on the auction block. In an era when any community hospital is eyed as a piece on the chess board, quality institutions with demonstrated profitability at below-market hospital rates are prime takeover targets.
I have been asked how all this affects the way I do my job. MODERN HEALTHCARE recently reported that more than 81% of hospitals report morale problems among their physicians, up from 69% just three years ago. Much of this discontent stems from threats of changes in hospital ownership. The same uncertainty affects hospital employees, who fear that their jobs will be lost or changed.
In a takeover situation, the administrative team has to be more vigilant than ever in communicating the necessary facts to employees and helping them to continue to focus on quality patient care.
Under these trying circumstances, an administrator has to make his best judgment whether patients can be better served under the current structure or under new ownership. I am convinced that local ownership and control is the right path for Cookeville General.
This stance has definitely put me in the hot seat in Cookeville. But I believe that everyone involved should know exactly where the administrator stands. He should demonstrate that through speech and action.
This can be very difficult when an issue becomes highly divisive. Tempers get hot in campaigns where consultants are paid more than $500,000 to get the hospital leased and thousands of dollars are spent by each side on newspaper and radio advertisements. The administrator becomes an easy target when more than $100 million in potential revenues to the city is at stake, and he or she is perceived as the glue holding together the effort to keep the hospital locally owned and controlled.
Several things have come to my mind during this trying journey. One is that healthcare ownership and control should be local. Another is that in the last few years the patient has been taken out of the spotlight in our healthcare system and must be reintroduced as the central focus. Third, although some hospitals are owned by governmental entities, they really belong to the people who depend upon and use them when they are sick and hurting and looking for help. Fourth, our situation has proved that if you take care of the people, they will take care of "their" hospital's future.
A final observation is that in this great country, working men and women eventually get to voice their opinions, and when given the opportunity, they make the correct decisions, a principle that has held true since America was founded.