Financially Strapped FMH Seeks Partnership

WINNSBORO – Although County Council, during their final meeting of 2013, voted unanimously to advance to Fairfield Memorial Hospital their entire 2014 second quarter contribution of $245,000, Council OK’d an additional $50,000 to that appropriation during their first meeting of 2014.

Interim County Administrator Milton Pope said during Council’s Jan. 13 meeting that the additional $50,000 was “a critical need” for Fairfield Memorial in order for the hospital to meet its payroll obligations. Tuesday night, Council sat down with the hospital’s Board of Directors to discuss the hospital’s finances and to gauge where Fairfield Memorial stood with negotiations with a Richland County hospital for a partnership deal.

While the Board and Mike Williams, CEO of Fairfield Memorial, were optimistic of a partnership deal, the financial outlook painted by the hospital’s Chief Financial Officer Tim Mitchell was grim. Board Chairman James McGraw made it clear to Council that a deal with a third party was critical to keeping the hospital in operation, but until a deal is reached Fairfield Memorial will need the County’s help.

At the end of the hospital’s fiscal year on Sept. 30, Mitchell said, Fairfield Memorial showed a loss of $1.1 million. The current fiscal year, he said, has been off to an equally rocky start. In October, the hospital was $332,000 in the red; in November, that number was up to $429,000. The December numbers were not currently available, Mitchell said, but, he added, the month was “trending just as unfavorably.”

Problems with a new computer system, Williams said, cut off the hospital’s cash flow for several days, prompting the need for the $50,000 front from the County. That problem has been corrected, he said, and Mitchell noted that the loan has already been repaid to the County.

“We don’t want to ever get to that place again,” Council Chairman David Ferguson (District 5) said. “That was a one-time thing.”

The hospital continues to be more than $222,000 behind on its contributions to the S.C. State Retirement System, Mitchell said, and nearly $123,000 behind on utility bills from the Town of Winnsboro. In total, Fairfield Memorial has $1,311,595 in outstanding debt to its top 20 vendors. Fairfield Memorial’s retirement obligation will increase by another $83,000 on Feb. 1, Mitchell said, when the December 2013 contribution is due.

Williams said admission numbers were down, and visits to the hospital’s emergency room – which account for the majority of the hospital’s admissions – were down by 1,600 visits in 2012-2013.

“The revenue is not there,” Williams said. “People are not getting sick and they’re not coming to the hospital.”

The hospital’s share of state funds were also several weeks behind, Williams said. Those funds should be in this week, and Mitchell said the check should weigh in at around $385,000. Meanwhile, he said, an additional $100,000 in bad debt recovery will be in before week’s end. Mitchell said $170,000 of that would go to paying off two months of their obligations to the Retirement System. Half of what the hospital owes the Town of Winnsboro would also come out of those revenues. The rest will be distributed among the other vendors, Mitchell said.

A third-party agreement, Ferguson said, was the only way for the hospital to sustain itself. But, he said, it was important for Council to know how much of a contribution to the hospital’s financial upkeep would any potential third party expect from the County?

“Do you think they’re looking for more than that $1 million (that the County already contributes to Fairfield Memorial annually)?” Ferguson asked. “It all falls back to what are their expectations? Is it realistic as far as what the County can afford to do?”

And, Ferguson added, with the hospital’s numbers what they were, how eager is a third party going to be to strike a deal?

“We have had discussions out there, but that takes time,” Williams said. “We don’t have that time.”

McGraw, while he could not say how long the hospital could stay afloat without such an agreement, did say the next 60-90 days were “crucial.” McGraw said it was his impression that the hospital with which Fairfield Memorial is negotiating is willing to move forward “without a whole lot of the County’s funding.”

“It seemed to me that they wanted to be in control,” McGraw said, “and you can’t be in control if you’re not going to put all the money on the table. I think it was pretty evident, in my conversation with this party, that they really want to make all the decisions.”

Ferguson said Council would form a committee within 30 days to work with a similar committee from the hospital Board to assist with negotiations with a third party hospital and to seek additional government funds to help bridge the gap in the meantime.