Randolph County’s hospital had declared Chapter 11 bankruptcy and was considering proposals for sale. The hospital turned to state treasurer and the Local Government Commission (LGC) for assistance in limping toward the finish line:
North Carolina’s Local Government Commission (LGC) has approved a survival plan for the struggling Randolph Hospital that includes a potential $12 million loan for a startup company to buy the Asheboro-based health system.
The 145-bed community hospital, which has more than tripled in size since it was created in 1928, entered Chapter 11 bankruptcy.Randolph County Commissioners Chairman Darrell Frye told the LGC on Tuesday, May 4, that community health care is in crisis mode.
State Treasurer Dale R. Folwell, CPA, chairman of the LGC, is an opponent of health care consolidation and hospital monopolies that drive up costs and reduce quality. He said Randolph Hospital “is a gem” that provides independent, affordable and accessible health care. He has toured the hospital on many occasions, and successfully advanced Tuesday’s motion intended to secure the hospital’s future.
The motion, passed unanimously, approved VMG Holdings LLC, doing business as VMG Health, as a disinterested and qualified third party to evaluate Randolph County’s plan to sell the hospital to American Healthcare Systems, LLC pursuant to NCGS 131A-33. The motion included approval of a loan of up to $12 million subject to four conditions:
- The North Carolina Attorney General approves the sale of Randolph Health to American Healthcare Systems.
- Randolph County receives an opinion from VMG Holdings that the hospital stabilization plan presented by the proposed buyer demonstrates a financially sustainable health care service model for the community.
- Randolph County receives two seats with full voting powers on the governing board of the proposed buyer or the entity which becomes the owner of Randolph Health for at least as long as the Rural Health Care Stabilization Program (RHCSP) loan is outstanding.
- Randolph County shall disburse RHCSP loan funds to the proposed buyer by no fewer than three draws and, for each draw down, shall receive adequate security interests in amounts and form satisfactory to the county to secure the proposed buyer’s repayment of the loan.
The Randolph Hospital matter has been contentious. UNC Health said it could not recommend the loan approval because the plan does not represent “a realistic and feasible path forward for Randolph Health.” UNC Health had a lead role with the RHCSP committee that evaluated the purchase proposal.[…]