Hospital, city deal sealed
The city of Troy now owns the property of Troy Regional Medical Center, after closing with doctor owners Wednesday afternoon.
It’s been nearly two years since Troy Doctors Hospital, LLC., composed of 14 local doctors and investor Gil McKenzie, took ownership of TRMC. The hospital prior to that was owned by Attentus Health Care, a company that went bankrupt and nearly left the hospital doors in Troy closed for good.
With the backing of the city of Troy, Troy Doctors Hospital, more commonly known as the doctors group, took ownership of TRMC. The city agreed to support the group for one year, promising to take over themselves if at any time during that year, the group could no longer afford operations.
The agreement was extended almost another year, ending with the closing of the real estate transaction Wednesday.
Through the new agreement, the city’s established Health Care Authority will own hospital property and lease it back to doctor owners.
Doctors will continue to operate the hospital, and eventually, they will own it outright, after paying back the $11.5 million to the city of Troy.
But, if all doesn’t go as planned, what exactly could this mean for Troy residents?
“It’s totally seamless if it goes as we hope it would go,” said Troy Mayor Jimmy Lunsford.
“It would be difficult to discuss the next situation without implying (that’s what we think would happen).”
What happened Wednesday was simply a closing of the doctors’ previous loans with Superior Bank, a transfer of money into accounts set up at Troy Bank & Trust and a distribution of the funds, Lunsford said.
“At the same time, it’s being fixed to lease back to doctors,” Lunsford said.
Even though the city now owns the hospital property, it does not have authority over TRMC operations, nor are hospital funds made public like the city’s are.
However, as a non-voting member of the board, Lunsford has personal knowledge of the hospital’s operating funds.
Still, just as any landlord-leasee deal, if the renter can’t make payments, the landlord steps in to take over.
If the doctors group finds they can not make payments, the city may find themselves in the hospital business, once again.
With funding tight for the city this year, Lunsford said he’s not sure exactly how they would operate if that were to happen.
“We haven’t put a plan in place for if we would have to operate it,” Lunsford said.
“We would have to have additional funding, probably a short term loan.”
McKenzie told council members Tuesday night, however, that it is not likely the hospital will find itself in the city of Troy’s hands once again.
“We will be turning the corner this year,” McKenzie said.
McKenzie said he also anticipates the hospital reaching a turnaround in the beginning or middle of 2010.