Hospital's trauma status slips temporarily

Hospital's trauma status slips temporarily

Nov. 7, 2000

By Jim Mimiaga
Journal Staff Reporter

Lingering problems recruiting additional surgeons at Southwest Memorial Hospital have caused managers to temporarily lower their trauma-care capability status a notch, hospital CEO Bob Peterson said Monday.

Quorum slated to be sold to Dallas-based company

By Janelle Holden
journal staff writer

The company that provides management services to Southwest Memorial Hospital, Quorum Health Group, is set to be sold to Triad Hospitals.

Quorum signed a sales agreement last month with Triad, a company based in Dallas, Texas.

Currently, Southwest Health System, Inc., the private not-for-profit company created to manage Southwest, pays approximately $300,000 a year for Quorum’s managed-care expertise. In addition, Quorum provides economy of purchasing for the hospital by allowing it to buy health equipment and supplies in bulk.

If the $2.4 billion deal goes through, Triad Hospitals would become the third-largest investor-owned hospital company in the country. Both companies were spinoffs of the Hospital Corporation of America in 1992.

Triad would acquire Quorum’s 22 hospitals in the South and Midwest, as well as Quorum’s Health Resources consulting operation, a subsidiary that provides management services to more than 200 hospitals nationwide, including Southwest Memorial.

Quorum is based in Brentwood, Tenn., and in the past few years, has faced lawsuits and allegations of Medicare fraud within its owned hospitals.

Triad’s stock fell after the deal was made, dropping $2.06 to $28.69 on the Nasdaq Stock Market. Quorum shares fell 42 cents to $13.20, also on the Nasdaq.

Bob Peterson, CEO of Southwest Memorial Hospital and an employee of Quorum, said Monday that the deal should have little effect on Quorum Health Resources.

"It is primarily aimed at the owned hospitals. We’re not even sure at this point in time what will happen to the management company," said Peterson.

"It could be spun off into its own company, at which time the senior management could take it over," he speculated.

Pat Ball, a spokeswoman for Triad, said Monday afternoon that that was a possibility.

"We are looking at possibly divesting a piece of that investment," she said.

Quorum has gone through restructuring in the past. In 1992 it bought HMP, another management company, and "very little changed," said Peterson. He expects the deal to close next year, with few, if any changes locally.

"We foresee very little change, because our understanding is that Triad’s not interested in the managed-hospital part of the company," he explained. "We don’t see any restructuring taking place (of personnel) under any of the scenarios."

The sale includes about $1 billion in debt, but Triad said it wouldn’t affect earnings per share in the first year and would increase earnings after that.

Triad currently owns 31 hospitals with 4,835 beds, 15,900 employees, and revenues of $1.26 billion last year.

But despite the decision to go from a Level 3 to a Level 4 trauma center, local care and services will stay about the same, Peterson said during the hospital’s quarterly financial report to the Montezumna County Commission.

"Severe, multiple-trauma patients will have be rerouted elsewhere," he said, adding that regularly scheduled surgeries will continue as usual, as will less-severe emergency needs.

" ‘Multiple’ means patients with serious injuries to more than one bodily system."

In 1998 the Colorado Department of Public Health and Environment began ranking hospitals based on their trauma-care capability. That way, emergency patients are transported to hospitals with trauma centers equipped to handle that particular severity of injury.

For instance, severe head injuries require a Level 1 ER facility with neurologists. Hospitals in Denver, Grand Junction, Farmington and Albuquerque can provide Level 1 services. Patients needing some sort of immediate emergency surgery require at least a Level 3 ER.

A Level 4 covers less-severe injuries like broken bones and lacerations.

The problem is not that Southwest doesn’t have the facilities or equipment to handle Level 3 emergency, Peterson explained, but that there aren’t enough doctors and nurses to cover ER on-call shifts around the clock. Therefore, Southwest does not qualify for the higher care status.

"We only have two surgeons, but we need at least one more," Peterson said. "Without more we cannot cover all the shifts. We’re interviewing two general surgeons this month that we are very hopeful about."

During the uncovered surgeon shifts in the ER, managers contact emergency dispatchers who announce what is called a "surgery divert" for rescue personnel dealing with situations where there are serious injuries, such as a big car wreck.

The announcement happens rarely, Peterson said, noting that there were no surgery diverts between July and September.

Whether or not a patient will be diverted depends on the circumstances. It was noted that Southwest usually does have the expert staff on hand to deal with a multiple-injury situation, so physicians here will be conferring with physicians at a higher trauma center to determine if moving the patient is the best solution.

Despite the lack of staff, Southwest is on track to make a profit this year, according to Finance Officer George Brisson. Net revenue came to $472,664 for the end of the third quarter for the fiscal year 2000.

The recent reintroduction of a 2 percent match for pension contributions and a 2 percent across-the-board raise has improved employee morale, administrators reported. Brisson said that a better pension package for employees is being considered for next year’s budget.

It’s all for nothing, though, if a privately run surgical center opens in the area, Peterson said in response to queries about the topic from the commission.

"That could be very damaging for the hospital, and I understand that it is being discussed," he said.