Gallup's Rehoboth McKinley seeks partner
Dec 03, 2012 (Albuquerque Journal - McClatchy-Tribune Information Services via COMTEX) --
Rehoboth McKinley Christian Health Care Services has its origins in a 1983 merger of two competing hospitals. The two systems realized they were not financially viable independently.
Almost 30 years later, the Gallup-based health system is looking for a new strategic partnership, preferably in a joint venture that will bring new investment to the system's 69-bed hospital, help it attract more health care providers and allow RMCHCS to thrive.
RMCHCS acting CEO Roger Gleisner said financial stress, challenging new regulations, including regulations requiring hospitals to adopt electronic health records, difficulty recruiting health care providers -- all issues shared by rural hospitals -- argue for a new strategic alliance.
The system is looking for a partner "that can bring economies of scale that we don't have on our own," Gleisner said. "We need someone to bring in capital resources, to bring in some more expertise, whether it's in information technology infrastructure or management expertise. We need something that allows us to thrive."
The system expects to make money this year, but last year it lost $6.5 million. Chief development officer Ina M. Burmeister said that among the reasons for the loss was the system's spending on information technology and the need to hire temporary and contracted physicians and other medical providers to meet staffing shortages. At the same time, Medicare reimbursements and hospital admissions were both down.
"Given the challenges of health care reform, regulations, Medicare changes, this is something a lot of hospitals need to do," she said. "It's becoming more and more challenging for stand-alone hospitals to do it on their own. The amount of money we need to pour into this as an independent hospital is significant."
RMCHCS has barely started the process of finding a partner. So far it has gauged the interest of some larger systems in the area. Gleisner said RMCHCS has yet to start negotiating with anyone, though he hopes the process will be concluded in six months.
Gleisner said he wants a joint venture rather than a sale of the system because a joint venture will let the community guide the system in a direction the community wants. If the system is sold, the new owner would direct how the system evolves.
Gleisner said the system wants a partner that has medical providers who want to expand their practice in RMCHCS's excess capacity. The system needs a partner that can invest in infrastructure as well. Gleisner said the hospital needs to invest $5 million to $10 million in surgical suites.
"We're looking for an organization that could really see the value of developing RMCHCS in Gallup," Burmeister said. "We see RMCHCS as a good institution. There are caring, qualified people who work here, who have worked here for years. We want the hospital to thrive in this community, as opposed to taking it away."
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