They know what they want, but they don’t know how to pay for it.
The Charlton Medical Services Committee (CMSC) heard a presentation at their third meeting last Wednesday by Alan Richman of InnoVative Capital. His Pennsylvania-based company is a FHA mortgage lender, municipal advisor and USDA banker which helps find financing solutions and capital for rural and critical access hospitals, such as Charlton Memorial.
Richman told the group a systematic approach was needed to “try and figure out what will work for your situation”. He suggested a complete look at the operations of the hospital and a market analysis to determine where Charlton Countians go for their medical care and why.
“Unfortunately, many counties don’t need a hospital, but it’s very hard to make that determination without having all the facts,” he said. “Hospitals close all the time because they wait too long and never do an analysis of what is needed by the community.”
“After we figure out what your county will support, we can determine the appropriate amount of healthcare for your community — what’s appropriate and what’s cost-effective. I ain’t going to own your hospital and I ain’t going to run your hospital for you. I will figure out if you can do it.”
After a comprehensive review of the situation, Richman said he will make recommendations to the CMSC which it could then work to implement.
“Your hospital has got a lot of issues: payroll taxes, it’s closed, no doctors in the county, competing hospitals in the region,” he said. “You need to be really careful, because you can’t afford to fail twice. It’s not a foregone conclusion you can’t have a hospital, but you can’t under these circumstances.”
InnoVative Capital will provide the market analysis, study Georgia data, do a financial model, hold strategic planning sessions, and present options and costs to the committee for a fee of between $50,000 and $80,000. Additional costs will apply if the CMSC decides to move forward with the recommendations.
Richman said he could have a presentation of the options ready for the committee within 45-60 days.
He also said the hospital would need to be “clean” before it could move forward with any recommendations and urged the group to hire an attorney who specializes in finances and debt.
“Your current entity is not credit worthy,” Richman said. “It will have to be disassociated from any new entity that might be formed. There will have to be remediation and repair of past errors so there are no concerns this situation will repeat itself.”