Management Contract

Questions and Answers

Sierra Vista Regional Health Center and Southeast Arizona Medical Center Sign a Management Contract

Hospitals Working Together to Preserve Healthcare in Douglas

Douglas – July 14, 2011  - Southeast Arizona Medical Center announced today the execution of a management contract with Sierra Vista Regional Health Center effective July 14, 2011.  The management contract allows both hospitals to collaborate on the best practices in hospital management to ensure the preservation of health care in the Douglas community.

Sierra Vista Regional Health Center (SVRHC) operates a Joint Commission accredited 88-bed acute care hospital in Sierra Vista with an outpatient surgery center and imaging center located on their east campus.  In addition, the hospital has an outpatient rehabilitation clinic; an outpatient laboratory/infusion/hospice center in Sierra Vista; and operates three outpatient clinics located in Sonoita, Tombstone, and Douglas.  Southeast Arizona Medical Center (SAMC) is a 25-bed acute care critical access hospital in Douglas.  The hospital provides inpatient care; emergency room services; full service laboratory and respiratory therapy departments (both Joint Commission accredited); physical therapy; and radiology services.  SAMC also performs cataract and retina laser surgery at the hospital, and has an in-house Patient Focused Clinic to assist patients with health concerns. 

The recent reimbursement cuts in Medicaid and Medicare have resulted in major challenges for smaller rural hospitals.  In studying how to best approach these challenges, SAMC’s CEO Brian Bickel reached out to SVRHC’s CEO Margaret Hepburn who understand the current challenges facing rural hospitals.  Their discussions led to the development of the management contract.  This collaborative effort will allow SVRHC to share their best practices with SAMC.   Working collaboratively sharing resources, ideas, knowledge, and experience will prove beneficial to the communities served.   

SAMC and SVRHC have partnered as community hospitals in Cochise County for many years.  This management contract is one health care provider reaching out to assist a hospital partner.  Both hospitals believe this collaboration will ensure they each remain strong and successful in the delivery of health care within the county.  Brian Bickel, SAMC CEO stated, “The comfort and care of our patients is one of our major goals.  It is our desire to provide the best care in our region.  This effort with SVRHC will assist us with our goals.”  Margaret Hepburn, SVRHC CEO/President stated, “Our knowledgeable and committed physicians, our caring and devoted staff, and our strong leadership continue to provide quality care to the residents of Sierra Vista and the surrounding areas.  These strengths will assist in this collaboration with SAMC and will demonstrate our commitment to our hospital partner.”

SVRHC/SAMC Contract

Discussion Notes, Potential Questions/Answers

Notes:

•  This is a collaborative engagement; not a purchase or an acquisition.
• There is a formal legal management contract for SVRHC to provide management services to SMAC.
• Both Boards of Trustees were integral to this decision and approved the management contract.
• Notifications have or will be going to both hospital’s physicians and staff; county and state media contacts; the Arizona Hospital Association; the American Hospital Association; the public; and any other required or necessary entities and people.

Potential Questions/Answers:

•  Is this contract related to the previous agreement with Carondelet?

               No 

•  Is SVRHC purchasing SAMC?

               No 

• Will SAMC employees be laid off due to this contract?

              At this time there are no decisions pertaining to layoffs. 

•  Will SVRHC put money into SAMC?

               No.  If there is any money to be lent to SAMC by SVRHC, there will be a legal loan document drawn up and agreed upon prior to lending money. 

•  Will patients be forced to go to SVRHC from Douglas if Douglas cannot address their health care needs?

              No.  Physicians and patients determine where a patient will be transferred, if required.  

•  Will SAMC change their policies and practices to reflect SVRHC?

               SVRHC will share best practices and strategic tactics employed by their hospital.  If changes are made at SAMC, they will be changed by the SAMC CEO and the Board. 

• What is in this for SAMC?

              SAMC wants to ensure that health care delivered by them to the Douglas community is preserved. The hospital is experiencing challenges due to continuing reimbursement reductions. SAMC believes the assistance sought from SVRHC will allow them to address these concerns and look at alternative methods on how to address concerns in today’s health care delivery system.   

•  What is in this for SVRHC?

               SVRHC also is experiencing challenges due to declining reimbursements.  If Douglas were unable to remain in business, this could result in a patient load at Sierra Vista that would be difficult to accommodate and create undue travel burden to Douglas residents.  It is in everyone’s best interests to ensure SAMC remains open and able to provide health care to the citizens of Douglas. In addition, SVRHC believes they have an ethical responsibility to their county hospital partner to reach out and assist as needed. 

•  Will SVRHC now be responsible for the illegal immigrants served by SAMC?

               No. 

• Will the employees of SMAC become employees of SVRHC?

              No. 

• Will Brian Bickel now be an employee of SVRHC?

               No. 

• Will SVRHC take over the operating budget for SAMC?

               SVRHC will supervise the operating budget. 

• What is the length of the contract?

              Five years.    

• Is there a fee for the management contract to be paid to SVRHC by SAMC, and if so, what is the fee?

              Yes, there is a monthly fee which will be paid to SVRHC for their management consultation services.  We decline to disclose the amount out of respect for both facilities. 

•  Why did SVRHC open a clinic in Douglas?  Was it connected with this contract?

               The clinic was open to provide additional primary care services to members of the Douglas community.  The clinic does not impact the inpatient care delivered by SAMC. 

• What is the impact of this agreement on the Douglas community?

              This is a positive move for the Douglas community to ensure SAMC remains open and providing health care.