St. Mary’s source of start-up capital for EMS

Published 9:46 am Thursday, January 13, 2011

Medical center bought county’s short-term notes

A Huntington, W.Va., hospital provided the majority of the start-up capital for the county’s new emergency medical service.

On Jan. 4, St. Mary’s Medical Center and the Lawrence County Commission closed on the hospital’s purchase of the $600,000 in short-term revenue anticipation notes issued by the county.

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“They offered the lowest interest rate, lower than the banks, and were willing to help,” Commissioner Jason Stephens said. “We were pleased they were willing and able to do it.”

That interest rate for those notes due Sept. 1, 2011, is 1 percent meaning the county will pay the medical center $6,000 for the use of that money. The county will pay back the notes after the Lawrence County Emergency Medical Service begins generating revenue, Stephens said.

Lawrence County began providing emergency service on Jan. 1, after the dissolution of the decades-old Southeast Ohio Emergency Medical Services in late 2010.

This past summer Athens and Jackson county commissioners voted to leave SEOEMS after it had been in a months-long battle for solvency.

Lawrence commissioners supported continuing SEOEMS, speaking publicly that it was a viable organization. However that did not dissuade their partnering counties from pulling out. With the end of SEOEMS Lawrence County had to put together its own emergency service.

Until the new medical service gets its Medicaid and Medicare insurance numbers, it is unable to bill for runs that would be charged to those governmental agencies. Historically, at least 50 percent of runs by emergency services are for individuals covered by one of those government insurance policies, according to Buddy Fry, LCEMS director.

At its Dec. 16 meeting the Lawrence commissioners approved a resolution authorizing the issuance and sale of revenue anticipation notes not to exceed $600,000.

The commissioners also put an extra $300,000 in the 2011 budget as part of the EMS initial costs.

“That was back when we first established the system and realized we would need some start-up capital,” Stephens said. “We had a ball park of $500,000 or $600,000 that would make it roll. At the time we mentioned it to (St. Mary’s) and others and checked with the banks and they were willing. … I think everyone was aware we needed funds. I don’t want to disparage the other hospitals. (St. Mary’s was) trying to help our county and we can save a little bit of interest.”

At least two banks were approached about buying the notes: US Bank and Ohio River Bank. US Bank offered a 1.99 percent interest rate and Ohio River proposed 3.3 percent, subject to approval from its board.

Stephens signed the Jan. 4 ,closing documents. Les Boggs said he declined to support the note sale to St. Mary’s. Paul Herrell’s signature was photocopied onto the document after Tami Meade, commission administrator, received his verbal approval to do that. One photocopy signature was acceptable on the document, Meade said.

Boggs said he declined to support the decision because he was concerned about the commission showing partiality to one medical facility.

“I was against it,” Boggs said. “I 100 percent appreciate St. Mary’s stepping up to the plate. At this point they are the only hospital stepping up and offering to help monetarily. I just didn’t want to give the impression that we were showing favoritism, one hospital over the other, since we are in the EMS business.

“There is nothing wrong with what they offered. I just didn’t want to give that perception that I was biased toward one hospital because we have five good hospitals in our area.”

St. Mary’s is in the process of building a 24-hour emergency room facility off State Route 141, scheduled to open early 2012. However, patients using the county’s EMS may choose whatever hospital they wished to be taken to.

However, Stephens defended the decision to buy the notes from the hospital, saying he does not see it as a conflict of interest.

“I see it as St. Mary’s wanting to see the county continue the public ambulance service,” he said. “It is an interest-bearing note. The people from Lawrence County will be better off having an ambulance service. In my opinion we got the best for the taxpayers. That is the bottom line for me.”

A phone call made to Doug Korstanje, director of marketing and community relations at St. Mary’s, was not returned by press time.