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Rice Medical Center Enters New Era—Signs Agreement with CAH

Eagle Lake, Texas

November 1, 2009 - Like many small and rural hospitals, Rice Medical Center, as a free-standing organization, has faced staffing, financial, and other operational challenges for many years. On September 28, 2009, RMC’s Board of Directors took an important step toward solidifying the hospital’s future by entering a lease agreement with Critical Access Healthcare, LLC (CAH), a company based in Dallas, Texas.

Under the terms of the new lease agreement, CAH will form a partnership Board to manage the hospital operations. The new partnership Board will consist of three (3) Hospital District Board members, Joan Matthews, Vicki Powers, and Joe McCreary; Charlie Slaton, the President of CAH, and Richard Hoeth, FACHE, the current CEO at RMC. The Hospital District Board will continue to own the hospital and property and will work with the partnership Board to set priorities for programs and services provided at RMC, now and in the future.

CAH was formed in 2007 to bring unique solutions to Hospital Districts and governmental entities related to rural community healthcare needs. Bringing significant experience in hospital operations, proven reimbursement expertise, and significant capital resources, CAH develops creative approaches that allow rural communities to access new hospital facilities, new services, and other operational improvements.

The company was founded by Charlie Slaton, a seasoned healthcare executive with over 20 years of for-profit and not-for-profit hospital operations experience. Mr. Slaton served previously as the CEO/President of MedCath, Inc., a specialty heart hospital company, and prior to that was a Sr. Vice President of Tenet Texas, a 15 hospital division of Tenet HealthCare. Slaton has had operational responsibilities for over 45 hospitals in 17 states, ranging in size from 25 beds to 1,000 beds. He received his BBA and MBA from Texas Tech University in Lubbock, Texas and completed the Advanced Management Program at the Harvard Business School in 2001. Mr. Slaton has served on the Board of Directors of the Texas Hospital Association in Austin and the Board of Governors of the Federation of American Hospitals.

Use of special supplemental funding programs is especially important to rural Texas hospitals which serve large numbers of Medicare, Medicaid, and uninsured patients. Rice Medical Center’s patient mix is about 53% Medicare, 8-10% Medicaid, 10% uncompensated care, and the balance consists of insured and managed care patients.

It will take several weeks for Rice Medical Center and CAH to transition into this new operational model, but the benefits to the community and the patients it serves will be considerable. Essentially, through this new partnership, Rice Medical Center will be able to utilize CAH’s experience, resources, and contacts to address several operational areas all at once and within quicker time frames. This will enable RMC to provide enhanced programs and services, staffing, updated technology, and new medical equipment and facilities for the patients it serves.

Slaton said, “CAH is excited to be working with Rice Medical Center and the community. We were able to turn Golden Plains Community Hospital’s troubled situation around in Borger, Texas, and today it’s in good financial shape. GPCH has recruited new doctors and is in the process of building a new hospital in cooperation with its community partner, Hutchinson County Hospital District.”

Rice Medical Hospital District Chairman of the Board, Mark Anderson, said, “Rice Medical Center is excited to be working with Critical Access Healthcare. Before entering into a partnership with CAH, our Board researched the company and found their reputation to be spotless. As a part of our agreement, the District, through this partnership, has ensured that tax funds will continue to be designated to fund indigent care and to replace capital equipment. We are looking forward to offering improved medical service to Colorado County through the new arrangement.”

The new partnership between CAH and Rice Medical Center will enable the hospital to position itself better to adapt to the many new changes anticipated when the federal government passes the healthcare reform bill. And, finally, the new partnership will ensure that RMC continues to provide its patients with the personal and high quality care they have come to expect when they seek services.



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