Watch the video for key details about the agreement from Mike Alred, Chairman of the Marshall County Healthcare Authority and Gary Gore, CEO of Marshall Medical.
Effective October 1, 2018, the Marshall County Health Care Authority (MCHCA) is entering into a strategic integration agreement with Huntsville Hospital Health System (HHHS) through which MCHCA and HHHS will co-manage Marshall Medical Centers’ operations and facilities. Under this agreement, MCHCA and HHHS are committing to invest over $110 million to fund capital expenditures at Marshall Medical over the next 10 years.
This new operating entity will be governed by the same local board and leadership who currently oversee Marshall Medical Centers, and the agreement provides new resources that will enable Marshall Medical to grow and operate more effectively in a rapidly changing environment.
Both Marshall Medical Centers and Huntsville Hospital are community-owned, not-for-profit organizations. We share similar missions of providing quality, local health care and reinvesting any proceeds we receive from delivering our services back into helping make our services better.
The combination of these community-owned health systems will provide additional assurance that Marshall Medical Centers will be able to meet the healthcare needs of this community well into the future.
A recent survey indicated that over 90% of U.S. hospitals anticipate pursuing some form of alignment or partnership in the next several years. Recognizing this trend, Huntsville Hospital has created a structure through which it works with area hospitals to retain community ownership of healthcare. The expansion of services in local communities throughout North Alabama equates to quality local health care and a greater ability for Huntsville Hospital to focus on the sub-specialty needs of our region.
We believe this proactive partnership positions Marshall Medical for continued success. It retains considerable local control while offering additional resources that will be necessary in the future. We are excited to have a new partner in our effort to ensure the best healthcare possible for the people of our community.
Marshall Medical Centers (MMC) is in sound financial condition and therefore not pressed to seek the assistance of a partner. However, the increasingly complex and uncertain healthcare environment is driving healthcare providers to join forces in increasing numbers. Marshall County Health Care Authority (MCHCA) has been evaluating for some time whether a partnership was in the best long-term interest of the community. Ultimately, the board decided being part of something bigger would better position MMC for the future. This is a proactive move to ensure continued success for Marshall Medical and the community it serves.
Marshall Medical has a long and successful history as an independent entity. However, increasing challenges will make repeating that success difficult. For example, Alabama has the lowest Medicare reimbursement in the nation, the third lowest Medicaid payments in the country and Marshall County has a high uninsured population. At the same time, the healthcare industry is increasingly complex. These factors make funding future capital needs, maintaining quality staff and recruiting physicians more challenging.
HHHS is the facility most often chosen by Marshall County residents for services not provided at MMC. Some may see HHHS as a competitor; we see them as a natural partner. Most compelling, however, is the fact that HHHS is a community-owned organization – like MMC. Being community-owned means reinvesting funds received from providing services to improve them. This was a very important factor in reaching this decision. The board considered other options, but felt a relationship with HHHS offered the best way to meet the healthcare needs of our community in the same manner those needs have been met for more than 60 years.
The allocation of capital dollars and responsibility for quality and operations will continue to be managed by a local board of directors. Some functions – such as budgeting – will be the joint responsibility of the local and HHHS boards, but most of the authority will remain with the local board.
MCHCA will retain ownership of all MMC facilities. However, HHHS will become financially responsible for operating the facilities going forward. MMC and HHHS will jointly fund future capital needs. MMC will also retain its debt and pay its debt service from existing tax receipts. Any excess funds will be used to supplement services at MMC.
HHHS and MMC are jointly committing over $110 million in capital over 10 years. This investment alone is incentive for HHHS to grow services in Marshall County. HHHS will also be responsible for operating gains or losses of MMC. HHHS will have every reason to make MMC viable - and - being viable means expanding and growing services.
HHHS is often operating at full capacity, particularly in its specialty care units. HHHS hopes to assist communities – like Marshall – in retaining the patients for whom care can be reasonably provided in their own communities. This will allow HHHS to focus on taking care of the needs of Huntsville and the subspecialty needs of the region. We expect more patients will be treated locally rather than less.
Selling was never a seriously considered option. We were looking for a commitment to maintaining high quality services, reinvesting in our facilities and keeping services local. The arrangement is structured to accomplish these goals.
We have a great staff and there are no plans to eliminate MMC jobs. We hope to add jobs through growth in services rather than reducing any local employment.
All physicians, independent and those employed by MMC are key to the success of Marshall Medical Centers and the health of this community. The agreement should only positively impact the medical community as it will help to ensure we maintain quality services and the latest technologies. While we are gaining a partner in HHHS, physicians remain our most important partner in meeting the healthcare needs of this community.
Marshall Medical Centers will retain its name. Sub-text will be added to the existing MMC logo - “An Affiliate of HH Health System”
The Foundation for Marshall Medical Centers will continue to be very important. Funds raised by the Foundation allow services to be provided in our community that insurance and government reimbursement (Medicare and Medicaid) do not fund adequately. Foundation support will be no less important under the agreement with HHHS. The Foundation will get a big boost from this transaction as MCHCA will transfer $1 million of its operating funds to endow programs at the Cancer Care Center. This will ensure cancer patients in our area receive services - like those available through Marshall’s patient navigator program – for years to come. This contribution highlights the importance of the Foundation going forward.