Financial hardships at Booneville Community Hospital are not exactly new but in 2013 hospital administrators found a new approach in dealing with the issue.
In October Mercy, Fort Smith announced it would be taking over operation of Booneville Community Hospital. The effective date of the takeover is today (Jan. 1) and the hospital’s story, to include leading up to the agreement, has been tabbed as the number one story of 2013.
The Booneville City Council formally passed, in a meeting held in mid-November — and before a full conference room in the city’s municipal complex — the lease agreement between the hospital and Mercy. The unanimous vote came after the matter had been tabled in late October to give aldermen a chance to go over the 35-page document.
Hospital chief executive officer C. David Hill announced in July the hospital had entered into discussions with Mercy about taking over the hospital.
All of that came on the heels of a dreadful year financially in which the hospital lost about $1.5 million.
At the time the agreement with Mercy was announced, Mercy officials said Mercy would be taking on no debt. Included is a loan with First Western Bank which is currently being retired via sales tax receipt deductions. According to the lease agreement, starting in January sales tax receipts will be turned over to Mercy.
Hill told the council hospital officials anticipate retiring the debt with accounts receivable collections and likely within the first 60 to 90 days of this year.
However, the agreement with Mercy also poses no risk to the city, Hill told the council in November, because all risk and profit associated with the hospital starting on Jan. 1, including monthly bond payments which total almost $1.3 million per year are exclusive to Mercy.
In April to the agreement with Mercy hospital officials explained a $1 million loss as “breaking even” in cash due to several factors including depreciation and a change in the procedure for writing off bad debts.
In May the hospital lost a breach of contract lawsuit filed by former Cannan Champion and was ordered to pay $92,511 as well as attorney fees, leading to a reported loss of $377,383.