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August 13, 2012

Citizens Hires Consultant for Advice about Hospital's Future; Sale Not Likely

Citizens Medical Center is waiting to receive a consultant's report on how the hospital can improve its operations.  Adam Higman, a consultant and manager of Soyring Consulting in Florida, explains why a hospital such as Citizens would chose each of three possible options.

A consultant is studying the future of Citizens Medical Center as its board tries to figure out a changing health care industry.  The board hired the firm last month to analyze the operations of the county-owned hospital.  The firm's findings could range from continuing as a stand-alone hospital to affiliating with a larger medical institution or even selling.  However, a sale is the least-likely scenario.  The board can recommend a sale, but only the county commissioners can take such an action.

This isn't the first time the hospital board has met to review its operation.  Other past strategic planning sessions have led to notable changes; the most recent was the construction of Citizens Healthplex in 2001.

'All things are possible'

Three people know best the ins and outs of Citizens Medical Center: Pozzi, Citizens Chief Executive Officer David Brown and hospital board Chairman Donald Day.  Pozzi and Brown both have a more than 20-year history and have each heard a buzz in the community about the hospital being sold.  The buzz started soon after the New York City-based consulting firm, Cain Brothers, was hired.

On July 11, two Cain Brothers consultants spent about two hours with board members in a closed special session.  The firm was hired at the July 24 open special session meeting.  Day insists discussion is still premature, and more won't be known until the firm hands down a recommendation report.  A date for receiving the report has not been set.  Brown said he was confident in any options the board faces because he knows the decision made will be in the best interest of the people, hospital, and county.  An affiliation, Brown said, could be beneficial today.  Brown agreed with Pozzi that the unlikely scenario is selling the hospital, but that decision is still up to his board to take to the commissioners, he said.

Citizens' possible future

The Supreme Court's decision to uphold the Affordable Care Act is one of the key health care industry changes, which sparked the board's interest in re-evaluating the hospital's current operation.  Because Citizens is a public hospital, it has a higher load of indigent patients than Victoria County's for-profit hospital, DeTar Healthcare Systems.  Caring primarily for the indigent can be a problem when it boils down to payment and Medicaid reimbursement.  Citizens is one of about nine Texas public hospitals that does not receive tax revenue.  However, the other public hospitals have fewer than 25 beds, while Citizens has about 344 beds.

The trend now is most unaffiliated hospitals are choosing to join larger medical institutions, said Adam Higman, of Soyring Consulting in Florida.  Of course, some shut down or sell, but those typically have bad financial circumstances because a downturn in the community's economy.

"What's happening is hospitals are being squeezed everywhere, not just in Texas," Higman said.  Citizens' decision to examine its operation is not only common, but smart.

"Everyone is preparing financially," Higman said.

Read the full article from the Victoria Advocate.

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