Starting April 1, SSM Health Care will own and operate the Audrain Medical Center in Mexico, and SSM will officially purchase all of the buildings and grounds from the county in 2016.
A ceremonial signing celebration will be held April 3 at the hospital. AMC CEO David Neuendorf said he hopes the community will come out, meet the new owners and see what the future holds for the hospital.
Since SSM made its announcement on March 4, Neuendorf said members of the Board of Trustees have been busy clearing up a lot of transaction paperwork and that everything is set for the takeover in six days. Neuendorf said the name, ownership and operation of the hospital will change to SSM on April 1. He said the hospital's new name is still being determined, and that SSM wants a "brand name" for all its hospitals and should know by the end of summer what that will be.
"When people get to know SSM, they will begin to appreciate what a great healthcare system it is," Neuendorf said. "We are a 95-year-old company merging with a 141-year-old organization. They have a culture that is close to ours. We think alike. We are both non-for-profits and we want good quality and satisfaction. They are excited. We are excited and believe that we were made for a good partnership."
Neuendorf said SSM will acquire all of the assets and liabilities of the hospital on April 1, and that the purchase of the buildings and the grounds of AMC will be finalized in November 2016. During the next three years, he said the building and grounds will be owned by the county and leased to SSM until 2016 – the time it will take to allow the hospital's outstanding revenue bonds to retire.
"These are revenue bonds the county issued in 2001, for $15 million to modernize the hospital, but there is still $5 million outstanding on the bond issue," Neuendorf explained. "So, SSM is going to pay off the bonds for us, on schedule, and be done by 2016. They also have the option to pay off the bonds early."
Neuendorf said SSM is a "good thing" for Mexico and Audrain County residents. In short terms, he said, "the financial difficulty of the hospital requires AMC to become a part of a larger system," and that SSM is the answer. The corporation was one of six health care systems interested in a partnership with AMC. Three submitted proposals and SSM was the best of the three. Audrain Medical Center is the 17th hospital SSM has purchased.
"We are struggling financially, everybody knows that and everyone is concerned about our hospital," Neuendorf said. "SSM is a big system; a $3.5 billion revenue system. They have a Double A minus rating and are very sound financially. So, because of the short-term financial issues here, SSM is going to help us fix our immediate financial needs and solve the financial crisis that we have been in for a while now."
Page 2 of 3 - "If you're aware of what's happening in healthcare, with the Healthcare Reform and Affordable Care Act of 2010, the future for a small independent hospital is not very bright, because it is changing the way healthcare is delivered and paid for. And a small hospital like ours is not situated enough to survive the new healthcare reform world," Neuendorf said. "The only way we can survive, have access to resources and expertise and secure capital so we can invest and be prepared for the new world of healthcare that is coming, is to be a part of a larger system to be prepared for the road ahead."
Neuendorf said what the policy-makers envision is hospitals coming together and working together in large numbers with physicians, clinics and therapists providing population health management in the future.
"And that requires hospitals to be able to do everything a patient needs, and of course, a small hospital can't do all those services on their own," Neuendorf said. He said AMC primarily services three counties, Audrain, Montgomery and Monroe, which calculate to about 47,500 people – a number, Neuendorf said, is not high enough to support the hospital's financial obligations.
"AMC has a lot of services, a comprehensive care center and intervention of cardiology. So, when we combine our services with St. Mary's (our sister company in Jefferson City) we now have a service area of about 250,000 to 300,000.
"In the future, size will matter, and we were just too small to have a future in that world."
Neuendorf said SSM is excited about growing with the Mexico/Audrain community.
"SSM wants to grow services here. So we have a common goal," Neuendorf said. "They are going to advance our services and make what we do better."
Neuendorf said the rumors circulating about SSM building a new hospital is "possible," but not part of the plan now.
"At some point, they will have to make the decision if they want to keep investing services where they are, or build. But there are no plans or commitments to build now," Neuendorf said. SSM's only commitment, he said, "is to invest in our facility."
"But, they are a $3.5 million health care system, so it is doable."
Aside from the financial relief SSM is providing, Neuendorf said another advantage from the purchase is that he, the entire executive team and all current AMC employees will remain in good standing with SSM and keep their jobs.
Another advantage, Audrain County taxpayers will no longer have to pay property tax to maintain the hospital once SSM owns it all.
"Only public institutions, like a county hospital, can levy a tax. Corporations can't do that," Neuendorf said. "So, this will not only help our financial crisis, it will reduce our out-of-pocket cost for our taxpayers, which is a nice benefit to our community.'
Page 3 of 3 - Neuendorf hopes the community will welcome SSM Health Care and grow with them. "The future is already brighter," he said.