Friday during a noon emergency meeting of the City of Hope Board of Directors that was announced last night, the board unanimously passed a resolution that authorizes the city to combine with the county to buy the grounds and buildings in which Wadley Regional Medical Center currently operates. This move could pave the way for Pafford Medical Services to make a bid, acquire ownership of the hospital and begin operations within several weeks.
Section one of the resolution appropriates $1 million from the city “for the purchase, operations and maintenance of” WRMC. The amount will be divided so that $250,000 is sent to the Hempstead County Economic Development Corporation to use in the buying of the property and $750,000 is used, if the property is purchased, for “operations and maintenance.” That amount will be provided to HCEDC in $107,142.86 per month payments over a period of seven months starting July 1st.
“In the event the property is not able to be purchased,” the resolution continues, “the full one million dollars ($1,000,000) may be used for operations and maintenance distributed as described above at one hundred thousand dollars ($100,000) per month over ten (10) months.”
The total cost of the property itself totals $500,000. When Director Steve Montgomery and Vice Mayor Kiffinea Talley asked whether Hempstead County would cover the other $250,000 in remaining costs, Powell answered yes.
The Hempstead County Quorum Court announced by email it will be holding its own emergency meeting Friday at 4:00 p.m, though no agenda was released. But the meeting was cancelled at about 3:15 p.m. because, according to County Clerk Karen Smith, the county’s attorney Ben Hale said an amendment to the ordinance the quorum court passed last week to extend $1,000,000 to support Wadley Regional during an ownership transition was not needed.
Speaking to the board at the meeting were HCEDC Executive Director Anna Powell, Pafford Chief Operating Officer Clay Hobbs and Pafford Chief Executive Officer Jamie Pafford-Gresham.
The meeting began, though, with City Manager J.R. Wilson explaining that Mayor Don Still had told him Medical Properties Trust, a company based in Birmingham, Alabama, had agreed to sell the Wadley Regional Property to the city of Hope and county of Hempstead. The mayor also requested an emergency city board meeting to amend a resolution passed June 19th that had offered up to $1 million payable over ten months in transitional funding to support the continued operation of the hospital in the event a prospective buyer cannot take control right away.
Wilson said work immediately began on the amendment resolution and that it had been sent for approval first to City Attorney Randal Wright and District Prosecutor Ben Hale who acts as the Hempstead County Quorum Court’s attorney. Copies were distributed at the meeting and shown on a screen.
Mayor Still asked Powell to explain the details about the deal in which the city and county are buying the property being used by Wadley Regional. Powell began by characterizing the situation, as she has since reports emerged that Steward Healthcare, the hospital’s parent company, was filing for Chapter 11 bankruptcy as “fluid.”
Powell explained that after the city and county buy the property, Southwest Arkansas Healthcare Authority (SWAHA), a nonprofit organization governed by a board consisting of Powell, Hobbs, Wilson, Hale, Hempstead County Quorum Court member Ed Darling and former Hope mayor Dennis Ramsey, would operate the hospital until a new owner can take over.
“The next thing is that there's going to be a term sheet that our lawyers at Mitchell Williams can agree to that will then eventually become a purchase agreement that we will agree on. So at this very moment, we are not going to sign an agreement. Immediately following these meetings, there will be a term sheet that's agreed to, and then the purchase agreement will most likely happen in the next couple of weeks or next week, we don't know.” Powell said, adding that she appreciated that the city was contributing a lot of money but felt the price for the property was a good one, even considering the work needing to be done on the building
Hobbs spoke next, explaining that the city’s purchase resolution was needed because of Pafford EMS’ intent to bid for Wadley Regional Medical Center’s license. “One of the reasons we really got here today on the real estate was, is we have an asset purchase agreement as a qualified bidder. It looks like we are going to be the bidder of choice for the license. So under that APA agreement, we had to have the real estate agreement in place and have the term sheet agreed to,” he said.
There will be two term sheets to be signed by the parties to the agreement, Hobbs said. “We're hoping one is a short-term lease that might be 60 days between Medical Properties Trust and Pafford Health Systems, and then the asset purchase agreement with the city and county. But we had a 3:00 deadline today that they had been posted on us by the bankruptcy court. So that's why things from yesterday and the day before moved so quickly into this emergency situation.”
Hobbs characterized the events of the past few days as busy and involving many discussions but said he felt a sense of optimism about the potential outcome. “Things have moved much quicker than we thought,” he said. “Jamie [Pafford-Gresham] and I've been on the phone with our legal team all morning. We've been on the phone with the Southwest Arkansas Healthcare Authority lawyers, and things are just coming together, and it looks like we're going to have a good outcome for our hospital. I think hopefully one of the best outcomes we could have asked for given the circumstances.” He invited any questions from the city directors.
Director Montgomery asked, “As far as the license Pafford requires, it could take up to 60 days?”
“It could take up to 60 days and that's what we're hoping for,” Hobbs said. “That's best case scenario, but we have to remember, we are dealing with a organization that is in bankruptcy and is receiving money from their debtors to operate, and when that money's out, that money's out, and that's that's why we, in many cases, have an emergency on our hands.” He added that while Steward has said it intends to continue to operate its hospitals, it is running through its funds quickly while it is selling off its facilities.”
Here Pafford CEO Jamie Pafford-Gresham said, “The thing for the community to know is that all of you and us have steps that if that happens, we're still going to have a hospital here, and it's not going to close. That could be our loudest message that you are sending today and in the last week is that we're taking care of our people, and we're going to ensure that that hospital stays open and that the ER is open. So that's the blessing of it as we move forward.”
Pafford-Gresham credited Powell and Hobbs for moving quickly and negotiating well. She recounted that at one point when someone referred to “only a half a million dollars,” Hobbs had made clear the value the community places on that amount of money. She also said MPT’s representatives had told the negotiators they were themselves rooting for Hope.
The 60 days between closing Pafford’s purchase of the license and prior to Pafford’s taking the helm at the hospital would help provide time, she added, for receiving emergency funds from the state, planning and organizing but Pafford would be preparing as though those 60 days are not available.
“We manage emergencies for a living, and we expect somebody to throw the keys at us when we do our signature. Either way, we're going to take care of business,” Pafford-Gresham said.
Director Montgomery asked whether mechanisms existed for Pafford to step in as operator sooner than 60 days after closing of the purchase of the license to operate the hospital. Hobbs said they do: ”We have some safeguards in place internally with the [Southwest Arkansas] Healthcare Authority and with Pafford, and we've been communicating this with the state health department.” Pafford-Gresham added that she had been in contact with Governor Sarah Huckabee Sanders’ office, too.
Hobbs said the message should be that the hospital will continue to be open. None of its departments will be closed. The staff, he said, “need to understand that they're going to be taken care of, and that their jobs are good, and that we're going to have patients still coming to the facility.” While the next 90 days, he said, could be “rough,” he said the outcome will be worthwhile.
Earlier in the meeting Director Mark Ross asked if the city and county’s purchases would include the properties used by the clinics in town that are affiliated with Wadley Regional and operated by doctors in the Steward Physicians Network. These are Wadley Rural Health Clinic and Family Medical Specialists at 302 Bill Clinton Drive.
The city and county are not purchasing these properties. Hobbs said he had seen the news that a proposed purchase of the Steward Physicians Network by a United Healthcare subsidiary had fallen through but that he expected the course of bankruptcy proceedings would take place with the network seeking buyers while the clinics would operate business as usual.
Montgomery then praised Hobbs, Powell and Pafford for their work leading to the city’s purchase of the hospital property and said he too was optimistic Ross thanked former Mayor Ramsey for lending his experience in the process, citing his having been through another occasion when Hope’s hospital changed hands.
Powell told the board her hope was that she would not have to return for other hospital-related decisions other than to present reports. She pledged to keep the board and the community fully informed.
Ross asked whether a press conference had been considered. Pafford-Gresham said that because of nondisclosure agreements signed by the parties involved, this would be difficult, but the group was still offering as much information as possible without breaching those. Powell said a press conference might be possible 30 to 60 days in the future.
Hobbs emphasized that the community’s residents in the meantime need to support their hospital by making use of it. “They have to use our hospital. If we don't have utilization of our hospital, we're going to die. And that's important. We have a great hospital. We have great nurses and doctors and caregivers, and we're going to carry that on for the future,” he said.
Pafford-Gresham told of bringing a patient to the door of the hospital and being met by a physician who said, “Why did you bring that patient here?” She said, “That's not what you're going to hear from that hospital out there. And it hasn't happened for quite a while, and that's part of the downfall of what has gone on down there. So us taking over the physician services out at the ER was a part of that move, on our part. You're a hospital. Let's take care of people,”
Director Trevor Coffee asked whether the city would be responsible for the actual maintenance and upkeep work on the property. Powell said this would be handled by a contracted company and the city board would not be making decisions on these matters. Hobbs said that a lot of work would be needed inside the hospital. “Frankly, there hasn't been anything done in probably 10 plus years to the building. So we've got some work ahead of us, but I think it's manageable,” he said.
Wilson clarified that any American Rescue Plan Act funds used would not be coming from the city but from the state of Arkansas. Powell said these would need approval by a legislative committee in addition to the governor, but that the funding would likely be granted since past requests by other communities for help keeping their hospitals had also been granted.
The resolution was then read aloud by Wilson. Director Montgomery made the motion to pass it. Director Ross seconded. The motion then passed by unanimous voice vote. All the city’s directors were present to vote.
After the vote, Vice Mayor Talley said a Yerger High School reunion is taking place this weekend and guests will be in town. Street Superintendent Kenneth Harvel announced that asphalting will be occurring on the Sixth Street Project starting July 9th.
After the meeting, Jamie Pafford-Gresham was asked whether it was possible for a bidder other than Pafford to swoop in with a higher bid and win the hospital’s license, cutting Pafford out. She said Pafford’s pursuit of qualified bidder status will likely make its bid more competitive when considered by the bankruptcy court. The city and county’s ownership of the property is also a decisive factor.
“What the other bidder has to do is also get the property and, of course, get the Steward bankruptcy approval as well. Being a qualified bidder takes a little more work. So it's not just all about the money at the end of the day. You have to meet some other requirements, and Pafford and SWAHA have been able to do that. So both things have to happen. You can't have a license without a hospital,” she said.