The publicly appointed board of the hospital authority that owns Hutcheson Medical Center took steps Monday to shed light on the struggling hospital's financial situation.
"They're trying to get a better feel for where we are financially," Don Weldon, board chairman for the Hospital Authority of Walker, Dade and Catoosa Counties, said after a special called meeting Monday.
At the meeting, trustees voted to bring on former Trustee Don Oliver as legal counsel for the Hospital Authority.
CORPORATE STRUCTUREHutcheson Medical Center, a publicly owned community hospital, is governed by the boards of five entities.* Hutcheson Medical Center Inc. -- The private nonprofit company, created in 1995, operates the hospital. It leases the former Memorial Tri-County Hospital building from the local hospital authority and has a 13-member board to oversee daily operations.* Hospital Authority of Walker, Dade and Catoosa Counties -- The authority owns the hospital building and oversees Hutcheson Medical Center's 40-year lease through a nine-person board appointed by county commissioners.* Hutcheson Medical Division -- The for-profit sister company to Hutcheson Medical Center was established to operate medical office facilities and practices. Its board oversees Hutcheson's clinics.* Hutcheson Health Enterprises -- The nonprofit parent company of Hutcheson Medical Center and Hutcheson Medical Division has a 13-person board.* Hutcheson Health Foundation -- The nonprofit foundation was established to raise money supporting the hospital's mission to serve residents of Walker, Dade and Catoosa counties. Its board has more than 25 members.Source: Hutcheson Medical Center officials; Hutcheson financial statements
Oliver resigned from the board at its last regular meeting to take on this role.
Oliver said he would serve pro-bono until the hospital's bonds were refinanced, at which point he would be compensated for work he provided as bond counsel, according to the minutes of the Oct. 28 meeting, the meeting where he resigned.
The board then moved to enter into a letter of intent with financial advisory firm Raymond James to advise the hospital authority.
Edmund Wall, of Raymond James, said Monday that he began three weeks ago to speak to Regions Bank about Hutcheson's outstanding bond debt.
Regions shared information with Wall that he said indicated the hospital's financial situation was precarious.
But Wall said the bank would no longer provide information to him until he was officially hired by the Hospital Authority.
He said he discovered that when Hutcheson took out a $35 million bond in 2008, it used a complicated financial instrument called a derivative swap that played a part in the credit crisis.
But the hospital struggled early on to maintain its bond covenants, resulting in Regions freezing $10 million in bonds, which are now a drain in the hospital's assets.
Wall wants to renegotiate the bonds to free Hutcheson from the money-losing arrangement, he said.
Wall said on Nov. 9, he filed an open records request to obtain various financial documents from Hutcheson Medical Center Inc., the private, nonprofit company that governs the hospital's daily operations.
Hutcheson President Charles Stewart said he would provide the documents for a fee of $1,000 plus copying charges.
Stewart said the hospital's bond was financed using standard practices. He said he understands the board's desire to get more financial details.
"I think they just want to be knowledgeable about the hospital," he said. "They feel they are appointed constituents of the counties and should know what goes on at the hospital."
Hospital Authority trustees have been kept out of the loop for too long, said Bebe Heiskell, Walker County's sole commissioner.
County leaders have said the five-board structure spreads information too thinly and keeps any one board from having a comprehensive understanding of the complex financial situation at Hutcheson.
"They've been kept in the dark pretty much, and so it may fall back to their responsibilities to do what's needed to be done for the hospital," she said.