50 Years, 50 Stories

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Published March 31, 1981, in The Ledger Independent

The Hayswood Hospital board of trustees has reached the decision that it cannot finish the new regional medical center as originally planned.

“We simply cannot do it by ourselves,” said Donald L. Wood, board chairman, yesterday.

Accordingly, the board entered into negotiations with Hospital Corporation of America last week for the purpose of obtaining outside help.

Hospital Corporation of American, base din Nashville, Tenn., is a “for profit” hospital as opposed to the Hayswood “non-profit” status. The national organization owns and/or operates about 190 hospitals nationwide, including seven or eight in Kentucky.

Part and parcel of Hayswood’s problem is profit or, more specifically, lack of profit. As a matter of fact, a projected profit for this past fiscal year turned into a loss.

“A non-profit hospital operates under far different rules than one which is run for a profit,” Wood explained. “As am illustration, we lose money on every Medicaid and Medicare patient — or about 62 percent of our workload. The figure in the Lexington hospitals is more like 30 percent.”

He continued: “In addition, since we are non-profit, since we use federal Hill-Burton funds, we are required by law to provide a certain amount of free bed care. Add to that bad debts and you can see where we are making money on too few patients.”

How much money was lost this past year? Razem is the speaker:

“I can’t honestly say because we haven’t seen the final audit figures. We had a target goal of $200,000 in profit for this past fiscal year. A ballpark figure would be that we missed that goal by about $400,000.”

Why? “A whole combination pf very complex reasons,” Razem answered.

“I think one of the things…we started out supporting and financing a secondary level of medicine which meant a lot of new equipment and new employees. Last fiscal year for example, we increased our personnel by 100; we increased our emergency room coverage; we purchased new equipment and supplies. In one short period of time, we put too much operating capital into increasing the level of care. We went from primary to secondary care and didn’t have the operating capital to support it.”

Why did the board decide to seek outside help.

“They (the board members) have been talking with many companies since last fall. On Wednesday, they decided to talk with one (HCA) to see how they could help us get the new hospital and operate this one (Hayswood) more efficiently. Mind you now, the board has not made a decision to go with HCA, but just to narrow it down to one. If we don’t get anywhere with them by April 30, we’ll go back to the others. We have not made any decision on whether it will be a lease or a sale of maybe a rental agreement.”

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