Randolph Health gets some good news, still seeks partner

Jul. 6--ASHEBORO -- Positive things are happening on various fronts for the financially struggling Randolph Health, the county's primary medical facility. After a few years of mounting debt, the institution may be seeing some light at the end of the tunnel.

Most recently, the N.C. Senate passed a bill that would offer some $20 million in state funds for low-interest loans to rural hospitals. The Rural Health Care Stabilization Act needs to be passed by the N.C. House of Representatives and then signed into law by Gov. Roy Cooper.

Sen. Phil Berger, Republican leader of the Senate, and Republican Sen. Jerry Tillman of Archdale co-sponsored the bill. It's believed that Randolph Health would be first in line for such a loan. UNC Health Care would administer the loans.

"I think Randolph Health would get a good shot at the money," Tillman said. "UNC is familiar with Randolph's balance sheet."

Tillman called such a loan a transition to getting a partner with greater resources or a new owner or other options to keeping Randolph Health open. He said Chapter 11 bankruptcy is practically a necessity to reducing the nearly $29 million in debt, which would make the hospital much more attractive for partnering or merging.

"I think they will have to do this," he said of bankruptcy, "shedding all the debt you can until it's gotten down to a manageable level. We've had several inquiries about partnering, merging or an outright buyout.

"Phil Berger and I wrote the bill with staff members to provide below-market-rate terms, which is generous and easy to pay back," Tillman said.

Even with the possibility of a low-interest loan, he said, there are still questions, such as "who's going to back the loan? I would like the city (of Asheboro) or (Randolph) county to back the loan."

Tillman said keeping Randolph Health open is critical to the future of the area's economy. "It's one thing we can't afford to lose," he said. "There's no (Greensboro-Randolph) megasite without a hospital. It's not an option to fail.

"Hopefully, some good things will work out. I think we're on the brink of good things happening."

Many in the state have called for the Legislature to expand Medicaid as a means of providing health insurance to thousands currently without. But with the Republican majority not expected to take that step, struggling hospitals have been given the option of joining the State Health Plan.

A press release issued in June by State Treasurer Dale Folwell announced that Randolph Hospital had signed a contract to join the plan, which provides higher reimbursement rates.

The press release said in part:

"The future of Randolph Hospital has recently been in the news. By providing higher reimbursement rates to the hospital, the State Health Plan is doing its part to provide accessible and affordable health care to state employees and retirees, as well as help financially sustain the hospital.

"The North Carolina State Health Plan Network is the result of the Clear Pricing Project (CPP) announced last year. Under CPP, the plan will move away from a commercial-based payment model to a reference-based, transparent pricing model tied to Medicare rates. Health care providers will be reimbursed for their services at Medicare rates plus an average of 82 percent. Plan members will save more than $50 million."

The following statement was issued by Randolph Health concerning the N.C. State Health Plan:

"After a thorough review, Randolph Health has signed the State Health Plan contract and is in network for the thousands of members that utilize our services. As the only hospital within this community, it is imperative that we continue to provide critical health care services with trusted providers to plan members.

"As Randolph Health continues work to secure a partner, we aren't in a position to decline anything that is advantageous for the citizens of Randolph County and for Randolph Health. While participating in the State Health Plan has a positive impact on our organization, our focus continues to be on securing a partner to ensure this community has access to local, high-quality health care."

Angie Orth, CEO of Randolph Health, on June 6 addressed some of the reasons rural hospitals are in financial trouble. The large debt isn't the result of mismanagement, she said, but rather "a lot of changes at the state and national level. Randolph Health posted a loss for several years and the pace of change (in health care) has illuminated that. Rural independent communities have felt those changes more abruptly."

At the basis of the situation is unreimbursed care, she said. "The majority of people here have Medicare or Medicaid or no insurance. Medicare and Medicaid don't always cover our costs."

That population makes up 75 percent of Randolph Health's patients.

On Tuesday, July 9, at 7 p.m., the Randolph County Board of Commissioners will meet jointly with the Asheboro City Council and members of the Randolph Health management team. The closed session will be held at Randolph County Emergency Services, 760 New Century Drive, Asheboro.

According to a statement, the meeting is to "discuss competitive healthcare activities by or on behalf of Randolph Health." No action is expected that night.

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