If Haywood Regional Medical Center hits money troubles, leaders may decide selling the hospital is the only way to keep it open. But by then, it could be too late.

As a public hospital authority, state law mandates a public process be followed for its sale, lease or merger. If hospital leaders launched the process immediately, it would take a minimum of 70 days and two public hearings to finalize any deal. On top of that, final approval rests with the board of county commissioners, per the hospital’s own bylaws.

The lengthy timeline could pose a problem for the hospital if it runs out of money before the process can be seen through. The hospital estimates it can make it two to three months on reserves. If patients don’t return in full force by that time, the hospital could hit a cash flow crunch.

If that happened, the hospital can’t simply turn on a dime and vote for a merger, bringing a quick cash infusion to the rescue. For a fall back plan to be in place by the time the cash runs out, the hospital board has to start tomorrow, and even then, it might not complete the process in time.

Here’s the process in a nutshell:

• The hospital board must adopt a resolution declaring its intent to sell or lease the hospital. The meeting must have 10 days of public notice.

• The hospital board must wait at least 15 days after adopting the resolution to hold a public hearing on the issue.

• Meanwhile, the hospital board must solicit a minimum of five proposals from interested parties. If the hospital doesn’t get five proposals, that’s OK, but it must try to bring at least that many to the table.

• The hospital board has to wait at least 30 days after the first public hearing to hold a second public hearing, this one on the proposals it received. The proposals must be made public at least 10 days prior to the public hearing.

• The hospital can then vote on the proposal of its choice, but it must be at least 60 days after the initial resolution. The hospital board must make a copy of the proposed contract available to the public at least 10 days prior to the vote.

• The Haywood County Board of Commissioners would have to approve any sale or lease voted on by the hospital board, according to the hospital authority bylaws. No one has figured out yet whether the commissioners would have to go through a separate public process, whether they can just sign off on the hospital board’s decision, or whether the two bodies would go through the process jointly.

Haywood Regional was once a county hospital — the old brick building is a landmark along the Old Asheville Highway heading out of Waynesville. The public paid for the construction of the new hospital through bonds. In the 1990s, the county commissioners turned loose the hospital, spinning it off as a non-profit hospital authority.

The county retained two measures of control. County commissioners appoint the eight-member hospital board. But the ultimate trump card is a legal clause in the hospital bylaws that allows the county to reassume control of the hospital. The county would have to file a motion in court to exercise the clause, however.

Anti-trust not at stake

Some have questioned whether anti-trust laws would come into play under a merger with a neighboring hospital like Mission. The answer is probably not, according to Bob Fitzgerald, director of N.C. Division of Health Service Regulation.

“In this situation I don’t think it is likely to be an issue because the hospital is pretty much a sole community provider now and would remain that way,” Fitzgerald said. “It already arguably enjoys a monopoly situation in the county.”

Merging with Mission would not really enhance that monopoly, but it would be best to check in with the U.S. Department of Justice to be sure, Fitzgerald said.

When Mission Hospital and St. Joseph’s Hospital in Asheville merged, they did need anti-trust clearance. As a result, they are monitored to ensure there is no price gouging since they are the only game in town. Their profit margin is capped based on the average profit margins of other hospitals, keeping Mission’s operating margin in line with the industry.

To ensure Mission doesn’t plow surplus profits into expansions, raises or excessive hiring, their expenses are also monitored, preventing any one area of their budget from suddenly skyrocketing in an attempt to bury profits.