Nacogdoches Memorial Hospital transitions ownership
NACOGDOCHES, Texas (KTRE) - In a week, Lion Star Nacogdoches Hospital will take over operations of Nacogdoches Memorial Hospital. The newly formed corporation will lease the building from the hospital district, collect payments, pay bills and salaries. The hospital district board loses those responsibilities but continues to deal with tremendous obligations.
For at least three years the Nacogdoches Hospital District Board has been fighting to get out of the red. Selling operations hopes to be the saving grace.
“It has been an absolute whirlwind,” said board president Lisa King.
She knows she will still oversee several continued responsibilities.
“We will continue to operate the ambulance service. We will work with the hospital volunteers, and also, the hospital foundation.”
Continued financial responsibilities include indigent care.
“We will still pay for that indigent health care, so we will reimburse Lion Star,” said King.
It’s a responsibility which leaves the hospital district vulnerable.
“The lack of the expansion of Medicaid has been very detrimental,” said King who is outspoken by the state decision.
Consumers will continue to be charged a one-cent sales tax to support the hospital district. Half is used to pay off improvement bonds in the millions.
“Those were all the bonds that we used to build all of this new part of the hospital,” said King.
The district was ordered by state inspectors to update the ICU. That was done, but along with quite a few cosmetic updates were made.
Fitch Ratings, a top credit rating agency, stated in April 2020 the district owes $42 million in bonds.
King said it will take at least 20 years to pay off.
Fitch stated ‘default appears imminent or inevitable.’
The board saw selling operations as their best option knowing the worse-case scenario was, according to King, “we might not have a hospital. The sustainability. It’s just not there.”
King assures hospital patrons careful selection of a buyer was followed. The hospital has served East Texas for 93 years. The new owner had to recognize its importance.
“They recognize the potential. We have a beautiful facility here. We got great services and they recognize that opportunity here in Nacogdoches,” said King, who will serve on Lion Star’s advisory board.
The closing for the hospital deal will take place Wednesday. All employees will remain on board. Decisions about staffing will come from the new owners.
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