What is the future of JCH?

On Wednesday evening (05-13-2015) a work session of the County Commissioners, County Council, and Hospital Board of Trustees was held at the Jasper County Fairgrounds to discuss the future of Jasper County Hospital. Tim Schreeg, CEO of the hospital provided background information, saying that the process actually started in 2010 with a strategic planning meeting at which the hospital was trying to figure out how to stay independent. It was not until 2013 that the trustees decided that they needed to start talking to others and they began with four groups but soon focused on two, IU Health and Franciscan Alliance.

He said that the number one problem facing the hospital was the lack of local doctors. In two years the community lost nine and the hospital currently only has six on the staff. The doctors provide patients to the hospital. People seeing a doctor in Lafayette are unlikely to be admitted to JCH. Recruiting family practice doctors is very difficult. 90% of new doctors do not want to be in private practice but want to be employed by someone else.

The second big problem is one that all hospitals face. Health care is changing and much of that change is not technological but regulatory. Larger hospitals are being penalized for a variety of things and health care is being pushed to home care and out-patient facilities, which is something that Schreeg says the JCH does well. It is important to be in networks and the networks are narrowing. Small hospitals are increasingly partnering with larger health care systems.  JCH had a payroll of $16 million last year and has facilities in Rensselaer, Wheatfield, and Brook.

The advantage of partnering with Franciscan Alliance is that JCH has worked with them for years in the form of cooperation with St. Elizabeth's in Lafayette. In addition, Franciscan Alliance runs St. Anthony's in Crown Point and people in the northern part of the county prefer to go north rather than south. Rensselaer is about equally distant from either hospital.

The other main speaker was Mr Woodhouse who was with a firm that negotiates affiliation agreements. (He said that they were working on three others, two involving county hospitals.) After talking about the process and the statement of goals, he got to the specifics of the proposed agreement. A new entity would be created as a subsidiary of Franciscan Alliance. It would take over both the assets and liabilities of JCH, with the possible exception of a few liabilities. Included in those liabilities would be about $20 million in debt of various kinds, about $14 million owed as a result of the recent hospital expansion. The county does not have to keep any liabilities because of the law regarding county hospitals.

Current hospital employees will be hired by the new entity and will get benefits comparable to what they are getting now. The current medical staff will also be maintained and any changes will be made when their contracts are up for renewal. Service provided at the hospital will be subject to the Catholic directive of the Franciscan Alliance (which means there will be no abortions performed at the hospital). The agreement contains a standard no-compete clause meaning that the county cannot compete for seven years. I believe that the employees are guaranteed employment for 90 days.

Then the floor was open to questions by the county officials. Once the notice of the public hearing is published, the affiliation document will be available in the auditor's office. The reason for choosing Franciscan Alliance rather than IU was that IU was not as good a fit as Franciscan Alliance. In the future the hospital may directly employ physicians and a reason it has not up to now is that there was fear of friction between physicians employed by the hospital and those in private practice. Franciscan Alliance will help recruit doctors for Rensselaer. There was some discussion of the hospital in Crawfordsville, which is the hospital most like JCH currently in the Franciscan Alliance. It is unlikely that the OB unit will be reopened because there are not enough babies being born in Jasper County and because most family physicians no longer want to deliver babies. However, it is quite possible that OB/Gyn services will be provided at least once a week on an out-patient basis.

There were questions about whether the hospital would pay property taxes and whether the value of the hospital was larger than its liabilities. The hospital has not been profitable for the past six years and in the opinion of the hospital management, it will have to close within a very few years if it continues to be independent because it is not financially viable.

The Jasper County Hospital Foundation is not a party to the agreement and it was hoped that it would continue to support the work of the hospital. It currently has in the neighborhood of $1.5 million in assets.

There was a decent sized audience at the meeting, many of them employees of the hospital. Change is coming to the hospital one way or another--the status quo is not sustainable. Let's hope that it is good change.