New management assumes Eureka Hospital

Tuesday, August 17, 2004

Eureka Springs Hospital will open under new management Monday morning.

The Hospital Commission has signed a contract with Craig A. Ortego, president and CEO of Quality Health Network Inc., of Lafayette, La.

He will have an assessment team in the facility to go through every department, according to Bill Fort, acting chairman of the hospital commission.

Hospital Administrator David Cox is expected to be in the hospital Tuesday and Wednesday to help with the transition. He had given notice to the local physicians approximately two months ago that he would be leaving his post. He has been working approximately two days per week for some time.

Ortego met with the commission Friday, Aug. 6, for a special meeting and two-hour executive session to discuss his proposal for the hospital.

On Tuesday evening, the commission met with Jim Knight of Real Sources Inc., of Russellville and John Phillips of Bella Vista.

Knight had brought a proposal to the commission in February 2002 to build a 24-bed for-profit hospital.

He was instrumental in initiating an application for a $9.5 million construction loan from the United States Department of Agriculture (USDA).

He has withdrawn from the loan process, leaving it in the hands of Cox and a group known as Community Health Resources, Inc. The loan is stalled in the Washington, D.C., USDA office.

Knight said in 2002 he would not be involved in the management of the facility, but would establish a management team for the day-to-day operation. He was more interested in building the hospital.

Apparently he made a similar offer to the commission last week. Phillips is the former administrator of the hospital in Gravette.

If Knight had gotten the management contract, Phillips would have been a candidate for the administrator's position here, according to Fort.

Ortego has been working in health care for about 25 years, according to a press release written by Fort.

He started at the bottom and worked his way up, Fort wrote. He served as director of Lady of the Lake Hospital in Louisiana and as director of the M.D. Anderson Cancer Center in Houston, Texas.

Ortego is currently managing hospitals in Fordyce and Dardanelle, as well as some in Louisiana.

His wife, Sharie, will be part of the assessment team. She specializes in nursing.

Fort said the Eureka Springs Hospital will keep its critical access status.

Critical access is a small rural hospital program through the federal government which allows Medicare to pick up a larger percentage of health care costs for patients.

Quality Health Network specializes in critical access hospital management, Fort said.

"We (the commission) had a difficult time making our decision Tuesday evening," Fort said Wednesday afternoon.

"We spent an hour and a half discussing the pluses and minuses of each company. The commission felt that either of the men could, and would, do an excellent job for Eureka Springs. We took a secret ballot to determine who would get the contract."

Fort said six of the seven commission members were on hand for the vote. Flo Fitzsimmons was absent.

The initial cost of the contract will be $14,000 per month. Once an administrator is hired and adjustments made in the hospital, the contract amount will be approximately $20,000 per month.

"A large part of that will be a pass-through cost with Medicare picking up most of the tab," Fort said. "We expect Ortego will have an administrator in place within 90 days."

The hospital has been contracting with a company to do monthly bill collections at a cost of $13,500 per month.

Fort announced during the Aug. 6 meeting that the hospital had been put in a very serious financial position when a large check was allowed to lie in a drawer for several months, bill collections were not being made, bills were not being paid and federal payroll taxes had not been paid in the last quarter of 2003 and the first half of 2004.

The commission pledged approximately $366,000 of its invested CDs to cover the debts. Fort said Monday the debt has been paid down to about $160,000 now.

He said Wednesday approximately $400,000 in collections have been made in the last month.

"Without the cash coming in from collections, there wasn't enough money to take care of payables, to meet the bills," he said.

Fort has refused to allow "David (Cox) bashing." He said "David depended on department heads to do their jobs and they didn't do them."

Wednesday evening, Fort said, "I think things just got away from him and he couldn't get hold of everything and get things back in order."

In the past approximately 20 years, there have been at least three mangement companies operating the hospital, and a time with Drs. Dan Bell, Greg Kresse and Charles Beard at the helm.

A five-year lease contract was signed with Washington Regional Medical Systems (WRMS)in Fayetteville in 1995. WRMS also operates Washington Regional Medical Center in Fayetteville.

In August 2000, WRMS announced it would end its contract with Eureka Springs March 31, 2001.

The Hospital Commission took on management of the facility when WRMS left. Cox was hired in April of 2001.

Respond to this story

Posting a comment requires free registration: