The Durham County (N.C.) Commission is expected to decide the fate of the county's struggling 216-bed hospital this week.
Duke University Medical Center, the favored bidder in the three-way race to manage the county hospital, has been wooing Durham Regional Hospital and county officials for more than three years.
But the not-for-profit academic heavyweight, which owns and operates 888-bed Duke University Medical Center in Durham, is contending with two established hospital chains: Santa Barbara, Calif.-based Tenet Healthcare Corp. and Naples, Fla.-based Health Management Associates.
Nashville-based Quorum Healthcare Group and University of North Carolina Hospitals also had bid on a long-term lease of Durham Regional, which lost an estimated $3.2 million in the first six months of this fiscal year, the Raleigh News & Observer reported. The five-member county commission eliminated Quorum and UNC from the running in January. Quorum had proposed a 50-50 equity partnership with the county, and UNC wanted a management contract that would keep the county responsible for the hospital's debt.
Duke has offered to pay $3.5 million per year for a 34-year lease and would pay another $40 million upfront to eliminate most of Durham Regional's $42 million debt.
Tenet, doubling Duke's offer, wants to pay $7 million per year in a 34-year lease and would make the first three years' payments in advance. It also would kick in $13.5 million for working capital.
HMA has proposed paying the entire 34-year lease upfront, which would add $150 million to county coffers. It would pay another $18 million for working capital.
Commission members are expected to discuss the proposals and vote on the lease at this week's meeting.
Some commission members and the county manager have visited HMA and Tenet hospitals in other states over the past two months to see how they are run, said Durham County public information officer Deborah Craig-Ray. The county hopes to have a transfer of management secured by July 1, when its new fiscal year begins.
Durham Regional's 15-member board, which had approved a deal with Duke nearly eight months ago, voted unanimously on March 25 to lease the hospital to Duke. But the county commission has the final say on the lease of the county-owned facility.