November 17, 2017 at 5:40 p.m.
Hearing is Monday
Agreement calls for levels of service to be maintained and IU Health to spend millions on improvements
Hearing is Monday
Copyright 2017, The Commercial Review
All Rights Reserved
When Jay County Hospital and Indiana University Health in August signed a letter of intent to integrate, they set up a basic legal framework for the process.
The final integration agreement, which goes before a public hearing Monday, holds close to those initial guidelines.
Members of the public will have the opportunity to express their thoughts on the agreement during Monday’s joint special session of Jay County’s hospital board, council and commissioners at 6 p.m. in the auditorium at Jay County Courthouse.
The agreement lays out the details of how Jay County Hospital will be integrated into the IU Health system. If approved, the shift to the new identity — IU Health Jay — would occur March 1.
The agreement, available to the public in the auditor’s office at Jay County Courthouse, calls for IU Health to assume all Jay County Hospital assets and liabilities, retain all current employees and commit nearly $20 million for “integration activities,” capital improvements and clinical equipment.
It also commits IU Health to maintaining the hospital’s current range of services, provided that they fulfill the needs of the area and are financially viable.
“This was incredibly important to the negotiating committee because they wanted to make sure that we still offer the same range of services that we do today,” said Jay County Hospital CEO Dave Hyatt, who under the agreement would become president of IU Health Jay. “Any time you get into a deal like this, there’s fear … ‘Oh, they could close this service line and send everybody to Muncie.’
“This is IU Health saying, ‘No, that is not our intent. We know that care is best delivered close to home.’ … IU Health has agreed in good faith to go forward and maintain trying to keep all the services open.”
There is an additional provision that guarantees the hospital to continue having an obstetrics program for at least three years. It is contingent on having at least two qualified physicians on staff, with IU health committing to work to recruit qualified replacements if obstetricians leave the staff.
Also, all Jay County Hospital staff will be retained on their current contracts, unless they reach new contract agreements with IU Health.
Last week, hospital employees had the opportunity to attend town hall meetings to ask questions about what to expect going forward.
“Really what IU Health came in to do was ask for our team members’ trust and say, ‘We want you to be part of the system,’” said Hyatt. “And I think that really resonated with our team members.”
During the transition process, all Jay County Hospital retirement plans will be closed. Each employee will have options as to how they receive their benefits from those plans and will also be able to enroll in IU Health’s retirement programs to receive future benefits.
Handling of such plans was one of the final details to be worked out, with IU Health agreeing to pay closing costs. Those are estimated between $6 million and $9 million.
“Because Jay County Hospital as a government entity is going away … those governmental plans have to be dealt with,” said Ice Miller attorney Kevin Woodhouse, who is representing Jay County Hospital in the integration process. “They can’t get transitioned to a non-governmental entity without significant additional expense and an administrative burden. And so the best way to deal with those plans is to terminate them as governmental plans …”
“The most important thing that everybody needs to understand is all of our team members’ assets and retirement fund are protected,” added Hyatt. “They’re in place, and they are not in jeopardy.”
For its first three years, beginning March 1, the facility would be governed by an 11-member board that would include all seven current board members, referred to as “legacy directors,” as well as four additional members appointed by IU Health.
The IU Health Jay board would be required to submit budgets, a strategic plan and other documents to IU Health for approval at least 60 days prior to the end of each fiscal year. IU Health would also have oversight over issues such as changes to the president or officer positions, new affiliations or joint ventures or expenditures not included in the budget.
After three years, IU Health Jay would fall under the jurisdiction of IU Health’s 15-member east central Indiana region board along with IU Health Ball Memorial Hospital and IU Health Blackford Hospital. At that time, the board would be required to include at least two Jay County residents.
Also, a physician who provides services full-time in Jay County would be named to the East Central Regional Employed Physicians Executive Committee.
Of the funds IU Health has committed to spend at the hospital, about $12 million will go toward “integration activities.” That could include spending on things like new software, upgrade clinical equipment, signs and marketing.
IU Health will contribute another $5 million — $3.2 million within six months of the closing date and an additional $1.8 million within the first year — to a capital improvement fund. The new 11-member board, which will include current members Dave Littler, Pat Miller, Roger Locker, Janet Bantz, Bill Hinkle, Debbie Kummer and Brad DeRome, will control those funds. If that money is not spent within the first three years, it will be placed into an escrow account to be spent only on projects approved by that board.
The agreement states that IU Health also projects $2 million to $3 million in clinical equipment improvements within the first year.
IU Health will also continue the existing management contract to oversee operations of Jay Emergency Medical Service.
The Jay County Hospital Foundation will continue to exist, though most of its funds will be transferred to The Portland Foundation. Beginning March 1, the foundation will support IU Health Jay.
In order for the agreement to go into effect, it will need to be approved by the hospital board, county council and county commissioners.
Monday’s public hearing and meeting, if it results in a vote, would mark the culmination of a process that began in January when Jay County Hospital Board, faced with mounting financial losses, voted to work with Quorum Health Resources to plan for its future. Over the next several months, Quorum guided the hospital leadership through a process that included discussions with community and government leaders, setting priorities for the future of the hospital and visiting other facilities around the state. That led to the signing of the letter of intent in August, followed by negotiations about the details of the integration agreement over the last three months.
The financial issues became glaringly apparent in mid-2016 and showed no signs of stabilizing. Jay County Hospital’s expenses outpaced revenue by nearly $8 million in fiscal year 2017, which ended Sept. 30.
IU Health’s goal, noted in the agreement, is that by using the resources of its network, which includes 19 other hospitals in the state, it can improve efficiency and make the hospital financially sustainable.
All Rights Reserved
When Jay County Hospital and Indiana University Health in August signed a letter of intent to integrate, they set up a basic legal framework for the process.
The final integration agreement, which goes before a public hearing Monday, holds close to those initial guidelines.
Members of the public will have the opportunity to express their thoughts on the agreement during Monday’s joint special session of Jay County’s hospital board, council and commissioners at 6 p.m. in the auditorium at Jay County Courthouse.
The agreement lays out the details of how Jay County Hospital will be integrated into the IU Health system. If approved, the shift to the new identity — IU Health Jay — would occur March 1.
The agreement, available to the public in the auditor’s office at Jay County Courthouse, calls for IU Health to assume all Jay County Hospital assets and liabilities, retain all current employees and commit nearly $20 million for “integration activities,” capital improvements and clinical equipment.
It also commits IU Health to maintaining the hospital’s current range of services, provided that they fulfill the needs of the area and are financially viable.
“This was incredibly important to the negotiating committee because they wanted to make sure that we still offer the same range of services that we do today,” said Jay County Hospital CEO Dave Hyatt, who under the agreement would become president of IU Health Jay. “Any time you get into a deal like this, there’s fear … ‘Oh, they could close this service line and send everybody to Muncie.’
“This is IU Health saying, ‘No, that is not our intent. We know that care is best delivered close to home.’ … IU Health has agreed in good faith to go forward and maintain trying to keep all the services open.”
There is an additional provision that guarantees the hospital to continue having an obstetrics program for at least three years. It is contingent on having at least two qualified physicians on staff, with IU health committing to work to recruit qualified replacements if obstetricians leave the staff.
Also, all Jay County Hospital staff will be retained on their current contracts, unless they reach new contract agreements with IU Health.
Last week, hospital employees had the opportunity to attend town hall meetings to ask questions about what to expect going forward.
“Really what IU Health came in to do was ask for our team members’ trust and say, ‘We want you to be part of the system,’” said Hyatt. “And I think that really resonated with our team members.”
During the transition process, all Jay County Hospital retirement plans will be closed. Each employee will have options as to how they receive their benefits from those plans and will also be able to enroll in IU Health’s retirement programs to receive future benefits.
Handling of such plans was one of the final details to be worked out, with IU Health agreeing to pay closing costs. Those are estimated between $6 million and $9 million.
“Because Jay County Hospital as a government entity is going away … those governmental plans have to be dealt with,” said Ice Miller attorney Kevin Woodhouse, who is representing Jay County Hospital in the integration process. “They can’t get transitioned to a non-governmental entity without significant additional expense and an administrative burden. And so the best way to deal with those plans is to terminate them as governmental plans …”
“The most important thing that everybody needs to understand is all of our team members’ assets and retirement fund are protected,” added Hyatt. “They’re in place, and they are not in jeopardy.”
For its first three years, beginning March 1, the facility would be governed by an 11-member board that would include all seven current board members, referred to as “legacy directors,” as well as four additional members appointed by IU Health.
The IU Health Jay board would be required to submit budgets, a strategic plan and other documents to IU Health for approval at least 60 days prior to the end of each fiscal year. IU Health would also have oversight over issues such as changes to the president or officer positions, new affiliations or joint ventures or expenditures not included in the budget.
After three years, IU Health Jay would fall under the jurisdiction of IU Health’s 15-member east central Indiana region board along with IU Health Ball Memorial Hospital and IU Health Blackford Hospital. At that time, the board would be required to include at least two Jay County residents.
Also, a physician who provides services full-time in Jay County would be named to the East Central Regional Employed Physicians Executive Committee.
Of the funds IU Health has committed to spend at the hospital, about $12 million will go toward “integration activities.” That could include spending on things like new software, upgrade clinical equipment, signs and marketing.
IU Health will contribute another $5 million — $3.2 million within six months of the closing date and an additional $1.8 million within the first year — to a capital improvement fund. The new 11-member board, which will include current members Dave Littler, Pat Miller, Roger Locker, Janet Bantz, Bill Hinkle, Debbie Kummer and Brad DeRome, will control those funds. If that money is not spent within the first three years, it will be placed into an escrow account to be spent only on projects approved by that board.
The agreement states that IU Health also projects $2 million to $3 million in clinical equipment improvements within the first year.
IU Health will also continue the existing management contract to oversee operations of Jay Emergency Medical Service.
The Jay County Hospital Foundation will continue to exist, though most of its funds will be transferred to The Portland Foundation. Beginning March 1, the foundation will support IU Health Jay.
In order for the agreement to go into effect, it will need to be approved by the hospital board, county council and county commissioners.
Monday’s public hearing and meeting, if it results in a vote, would mark the culmination of a process that began in January when Jay County Hospital Board, faced with mounting financial losses, voted to work with Quorum Health Resources to plan for its future. Over the next several months, Quorum guided the hospital leadership through a process that included discussions with community and government leaders, setting priorities for the future of the hospital and visiting other facilities around the state. That led to the signing of the letter of intent in August, followed by negotiations about the details of the integration agreement over the last three months.
The financial issues became glaringly apparent in mid-2016 and showed no signs of stabilizing. Jay County Hospital’s expenses outpaced revenue by nearly $8 million in fiscal year 2017, which ended Sept. 30.
IU Health’s goal, noted in the agreement, is that by using the resources of its network, which includes 19 other hospitals in the state, it can improve efficiency and make the hospital financially sustainable.
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