Walker County Sole Commissioner Bebe Heiskell said Wednesday she plans to continue "to try to provide the essential and necessary credit support needed by Hutcheson Medical Center as it continues to rebuild and provide medical services to the community."
She stated, "As to the press questions about the $2 million loan being discussed last week, that was a nice round figure divisible by two for discussion purposes as we looked at the possibility of extending the existing line of credit (LOC), which was backed by both Walker and Catoosa counties.
That $2M LOC extension would have only been accessed as needed for cash flow over the coming weeks, but only as pre-approved by both counties and the Hutcheson board.
"Fortunately, the immediate needs of Hutcheson have been met without a new loan. Hutcheson has been successful in re-establishing its traditional high level of services. The public is recognizing that fact and the patient load continues to grow. Collections often lag behind provision of services by several weeks, therefore creating cash flow problems as the patient load grows, but the revenues lag behind, which anyone who has ever tried to grow a business understands. It is a good problem to be forced to deal with.
"The last act of the prior administration was to create a partnership with Erlanger. Unfortunately that did not work out. The Erlanger partnership has been terminated, freeing Hutcheson to embark alone on a new strategic plan. The plan has been in the works for some time and was adopted at the last Hutcheson board meeting. The new plan will provide even better hospital services but at the same time provide substantial long term savings of several million dollars per year. Unfortunately, as with any new plan there will be some one-time extra expenses for the first few months. Again, this is a short-term cash flow issue but a long-term positive development.
"By this point in time everyone knows that the prior administration left Hutcheson's finances in shambles. While financial stability has been restored by the new Hospital Authority-controlled board, rebuilding credit can take years. Quite simply, Hutcheson still cannot borrow money at reasonable rates to meet its rebuilding phase cash flow needs without one or more counties providing credit backing. While that is unfortunate, it is an economic fact we must deal with if we want a hospital in our community. Dade has never provided any credit help for Hutcheson, and is not willing to do so now. As Catoosa has chosen not to participate in an extension of the existing LOC to provide further credit backing, new arrangements will have to be made.
"Walker County is working with Hutcheson and helping negotiate with several major banks to provide a long-term financial package that makes sense in light of the new strategic plan. That is a slow and tedious process which will take months to complete. In the interim, cash flow needs must be met.
"Walker County is willing to stand alone and individually help with these temporary cash flow needs as they arise and on a case by case basis. To do that, all options will be considered, including a new LOC - a LOC which can cover several weeks or even months of needs but is drawn down only on an as-needed basis. This is a much more economical method to borrow money than would be several small loans on an as-needed basis, as loan transaction costs are only paid one time.
"Again, all options are on the table."