Forum looks at Hillside sale

By LARRY RINGLER / Tribune Chronicle
YOUNGSTOWN — Forum Health System is adding physicians to attract more patients and seeking better payment terms from its largest health care insurer in an effort to regain its financial health, leaders said Thursday.

President and Chief Executive Officer Lowell Johnson also said the system could reap $10 million to $12 million from a sale of Hillside Rehabilitation Hospital, which he said three groups are ‘‘aggressively interested’’ in buying.

Two of the groups are local and one is national, Johnson said, declining to name them. He said the national group will be ready to make a proposal by the end of May, while the local groups are working on their own packages. He said he hoped the board would have an answer by the end of June.

Meanwhile, Johnson said the system, which posted an unexpected $6.5 million deficit in its first quarter ended March 31, is laying off 49 workers at Northside Medical Center. A consultant’s analysis released Wednesday said labor costs at the Youngstown hospital are $15 million over the benchmark of regional hospitals.

Johnson pointed out labor costs account for 62 cents of every $1 at Northside, while Trumbull Memorial’s figure was 49 cents and rival St. Elizabeth Health Center 48 cents. He said work rules that require higher pay to call in workers when the patient load rises are a major problem, but he also blamed himself for not better managing the labor situation.

Increasing its patient base and cutting labor costs are key goals for the Forum board, Chairman Parry Hesselman said at the news conference at Northside to discuss the analysis by The Chartis Group.

He said the board didn’t agree with the study’s option of combining all or part of the system with the area’s other large health care provider, Humility of Mary Health Partners.

‘‘We’d like to correct some problems we have at Northside and move on with the units we have,’’ he said.

Humility of Mary released a statement that said it’s always ‘‘open to working with others to consider fiscally and socially responsible options’’ for provided health care in the region.

It said it has had informal talks with Forum about community needs and said while it’s not currently engaged in active discussions, ‘‘we remain open to the possibility of such conversations.’’

Meanwhile, Forum continues to seek its own solutions. Johnson said the system on July 1 will add four primary care physicians at Northside, and is close to signing a new surgeon. Trumbull Memorial has seven new physicians, he said.

The system also is working with Anthem Blue Cross Blue Shield, its biggest insurance payer at 60 percent of the managed care business, to boost the amount they pay the system. Johnson said the goal is to add $2.5 million in revenue in the second half of this year, then $5 million in 2009.

‘‘I think they want two health care providers in the (Mahoning) Valley,’’ he said.

The president of a 450-member registered nurses union at Trumbull Memorial in Warren took a dim view of the Chartis report.

‘‘This study told us nothing more than every other study we’ve had. I wish them good luck and success,’’ said Tom Connelly, president of the 450-member AFSCME/United Nurses of America Local 2026.

Connelly said cutting the $400,000 by which The Chartis Group says Trumbull Memorial Hospital exceeds the labor cost benchmark would affect quality of patient care. He said his union has done what it could do to help the system’s finances and reiterated his call for Trumbull Memorial to separate from cash-strapped Northside.

He called the meeting Wednesday to review the analysis the ‘‘most depressive meeting I’ve attended. They have a tremendous undertaking to get Northside under control. We’ll take care of my membership and patients in Trumbull County.’’

The UNA’s contract has continued on monthly extensions, but either side can call the other to talks with a month’s notice or the extension expires, he said. The union may call Forum to the table within the next 30 days, Connelly said.

Spokespeople for a union representing 1,300 workers at Trumbull Memorial and Northside urged management to provide a clearer vision of the system’s future, along with installing permanent, local management.

John Burant, hospital division director for the Service Employees International Union District 1199, said the union asked Johnson if he would commit to keep Trumbull Memorial and Northside intact, something he said Johnson didn’t do.

‘‘We’re a little puzzled and a little frustrated by management on the direction they want to take the system,’’ he said.

Hesselman said splitting Trumbull Memorial and Northside could happen in the future but not now because both must shoulder the $116 million in unfunded debt the system owes to bankers.

Forum on May 14 owes a payment of $11 million to $13 million on its debt to bankers, who Johnson said are warily watching the situation after the system’s surprising first-quarter loss.

He said the banks also will closely watch union contract negotiations, first with the Ohio Nurses Association when that contract expires July 19, and again for talks with the SEIU when that pact expires Sept. 30.

‘‘We need some help from them,’’ he said.

Burant said the union just elected a negotiating team and is ‘‘prepared to be in there working.’’ He noted the union already gave about $8 million in concessions.

Creditors will be closely watching the bargaining, Burant acknowledged, but said the union doesn’t think they want to take any action to hurt Forum.

‘‘They don’t have any interest in tearing things up. They want to get their original terms,’’ he said.



lringler@tribune-chronicle.com