Duke University has won its latest battle for control of neighboring Durham (N.C.) Regional Hospital, but it hasn't won the war.
Duke, which runs 888-bed Duke University Medical Center in Durham, beat out for-profit hospital chains Tenet Healthcare Corp. and Health Management Associates for the exclusive right to negotiate a long-term lease of 216-bed Durham Regional.
Durham County has three acute-care facilities: DUMC, Durham Regional and 382-bed Veterans Affairs Medical Center, all in the city of Durham.
The Durham County Commission has the final say on a lease deal. It voted 3-2 April 6 in favor of Duke, which has been trying to work out a deal with the struggling county hospital for nearly two years.
Durham Regional lost an estimated $3.2 million in the first six months of this fiscal year. The hospital's total debt is about $42 million.
Duke has changed its original proposal in response to the county's concerns, making several major concessions:
* Adding a "walk-away" provision that would give either party the option to dissolve the arrangement if it isn't working after 10 years.
* Considering a 20-year lease instead of the proposed 34-year lease.
* Prepaying the first 10 years of the lease.
* Paying the county's annual $1.5 million bill for emergency medical services.
* Paying $2.1 million a year to a county-owned clinic.
With an annual lease payment of $3.5 million, Duke will be handing over a total of $7.1 million annually to Durham County under its current proposal. At the closing of the deal, the university also will pay $26.9 million so the county can retire its loan on the hospital's debt and $18.1 million toward working capital.
Tenet offered to pay $7 million per year for a 34-year lease, prepaying the first three years and adding $13.5 million for working capital. HMA wanted to pay the entire 34-year lease upfront, shelling out $150 million and adding $18 million for working capital.
Both Duke and county officials stressed nothing is written in stone. "The details are still fluid," said Ralph Snyderman, M.D., chief executive officer at DUMC.
A county spokeswoman added: "This will have to go through all the hoops, including antitrust clearance and final approval of the trustees at Duke and Durham Regional and the county commission."