RMH seeks change to not-for-profit status

Robinson Memorial Hospital officials want to change the Ravenna hospital’s status from county-owned to not-for-profit to give the hospital more flexibility in a restrictive health care economy.

Speaking with county commissioners Tuesday afternoon, Robinson Memorial Board President Gordon L. Ober and hospital President and CEO Stephen Colecchi said the hospital board has reviewed the available options and believes a change of status is in order.

“The board has chewed on this several times over the years and the board believes the timing is right” to make the change, Ober said.

Cuts in reimbursement for Medicare and Medicaid mean “it’s going to be difficult to continue to do business as a small, publicly-owned hospital,” Ober said.

The status change would allow greater investment flexibility, more opportunities for partnerships and a chance to lower employee costs, Colecchi said. All of that is needed to compete at a time when the population is aging and hospitals are seeing cuts in reimbursement from federal Medicare and state Medicaid programs.

With some 1,350 employees, representing 1,000 full-time equivalent jobs, Robinson Memorial is the second largest employer in the county. Another 200 people, representing 150 full-time equivalent jobs, are employed by Robinson Health Affiliates.

The change would lower Robinson Memorial’s employee costs, which run about 6 percent higher than not-for-profit hospitals, Colecchi said. He said the hospital’s payroll is about $80 million annually, about $4.5 to $5 million more than a comparable not-for-profit.

Colecchi said employees who participate in the Ohio Public Employee Retirement System sill would be eligible to stay in PERS, but the hospital also would establish another retirement plan that would mirror PERS but at lower cost. All employees hired after the conversion would participate in that new plan. Also, all current employees would have to pay into Social Security, Colecchi said.

“We still have to stay competitive in pay and benefits,” Colecchi said.

Colecchi noted the number of publicly-owned hospitals has been decreasing in Ohio and across the country. The number of hospitals owned by state or local governments declined by nearly 800 in the past 30 years, representing a 40 percent decline nationally.

There are only nine county-owned hospitals in Ohio currently, and Robinson Memorial and MetroHealth Medical Center in Cleveland are the only two county-owned hospitals with more than 100 beds.

The Ohio Constitution restricts how county-owned hospitals can invest and who they can partner with, Colecchi said.http://www.blogger.com/img/blank.gif

He said Robinson Memorial “cannot engage in partnerships with for-profit entities.” That makes it difficult for the hospital to cooperate with doctors who are in private for-profit practices.

Colecchi said the change “would provide the hospital with the best opportunity to maintain its long-term financial viability while continuing to meet the health care needs of the Portage County and surrounding communities.”

He noted that “55 percent of our business is Medicare and Medicaid and we lose (money) on every case.”

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