A forum on the proposal to create a public hospital district to take over Grays Harbor Community Hospital turned into a session opposing the upcoming Aug. 5 ballot issue on several fronts.
Miles Longenbaugh, the Ocean Shores financial adviser running as the lone candidate for the new hospital commission, told the crowd in Ocean Shores he was against the idea of the public assuming the debt on the facility, and would advocate against the ballot measure while at the same time running for the commission that might ultimately control the hospital district. Grays Harbor Republican leader Jim Walsh, who said he was speaking as a citizen and not for the party, also outlined potential ways the financially strapped private hospital could be restructured, possibly through bankruptcy proceedings, to avoid having the public take over its operations and debt. And Grays Harbor County Commissioner Wes Cormier told the forum, sponsored by the North Beach Community Improvement Association (NBCIA), that he opposed the way the hospital district was drawn and believes that a smaller district, excluding the North Beach and Montesano areas would have been proper to start.
Peter Jordan, former Ocean Shores mayor, noted that among the candidates running to be commissioners of the hospital, there were five who “have strong ties and are either employees or cheerleaders of the existing group that charted the course of the Titanic.”
Longenbaugh, who has no ties to the hospital, noted that there were actually six candidates with direct ties to the hospital, including its past chief financial officer. Longenbaugh is running unopposed for the one commission seat representing the North Beach.
“I think we are right in the same situation we have been in with the existing group,” Jordan said. “They have their feet planted in the dirt, and they’ll be damned if they are going to do anything different. All they are going to do is pawn off their problems on a new revenue stream.”
If the measure is passed, Jordan said, “you are going to get business as usual only it’s going to cost you a whole lot more.”
While the tenor of the forum was decidedly against the hospital measure — promoted as a way created by the Legislature to allow public facilities to take advantage of higher Medicaid reimbursement rates — NBCIA organizers of the event said no one from the hospital responded to requests to present the other side of the issue.
The biggest issue of concern to the group was the public assuming the KeyBank debt of about $34 million, which would likely require a levy to provide the funds to back the hospital bonds.
“The fact is you probably are going to have to refinance the bonds,” Walsh said, with the tax levy being used to guarantee the debt service. That, in turn, could cause some overlapping tax districts to exceed their statutory maximum amounts — such as the Timberland Library District, which stands to lose $4.7 million — with a series of payments to those districts proposed as a potential solution.
“This is madness. We do not want to do this,” Walsh said.
He proposed that a more equitable solution would be for the hospital to restructure through bankruptcy, then seek a buyer for the hospital.
Ocean Shores resident Randy Peck questioned recent operational decisions made by the current hospital staff, such as with contracts, is “sort of an indicator that we’re driving blind here. They are not controlling costs now, do you foresee current management controlling costs later?”
Longenbaugh said he originally was in favor of the hospital proposal but has changed his position entirely after looking more closely at the proposal and realizing the debt-to-equity ratio currently is high. In addition, provisions in the Affordable Care Act, he said, would force states to take over a greater share of the reimbursements from the federal government starting in 2017.
“That right there is the deal breaker,” he said.
Longenbaugh also said he talked to top bankruptcy lawyers who advised that the current board could file for bankruptcy, absolve the debt and “start with a clean slate.”
If the measure fails in the election, Cormier said he would propose a hospital district with a much smaller area, representing the Aberdeen-Hoquiam area to start. That would give the North Beach area a tool, he suggested, to demand services from the hospital if it wanted to later annex the area into the district.
“It just makes sense to start with a smaller district and grow,” Cormier said.
On July 23, the League of Women Voters will host a 6 p.m. forum on the hospital at the Rotary Log Pavilion in Aberdeen to be broadcast later on Eagle TV out of Elma.