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Quorum's bid to operate Alaska hospital unsuccessful

The Sitka (Alaska) Assembly voted Aug. 28 to approve entering into negotiations with the Juneau-based Southeast Alaska Regional Health Consortium to assume control of Sitka Community Hospital, KCAW reports.

The assembly voted 6-1 to move forward with SEARHC. The vote came roughly one year after the Sitka Assembly first proposed the idea of finding new management partners for the hospital.

The assembly received five offers from competing healthcare organizations to operate Sitka Community Hospital, including one from Brentwood, Tenn.-based Quorum Health Resources, which offered to take on management of the hospital for a fee of $454,000 a year for five years. The amount excluded the salaries of the hospital's two top executives and travel expenses.

Officials settled on SEARHC because many considered the organization to have the strongest proposal, according to the report. SEARHC proposed buying Sitka Community Hospital for between $8 million and $9 million; a buyout of the city's pension obligations to hospital employees, amounting to $700,000; annual $140,000 lease payments to the city for use of the hospital property; and guaranteed employment to all current hospital employees, among other stipulations.

SEARHC made an initial offer for the hospital in May 2017 amounting to $6.5 million for the hospital, but the city rejected the proposal. The organization submitted a second proposal in January 2018, which officials selected during their meeting Aug. 28.

City officials will draw up a nonbinding letter of intent and continue negotiations and due diligence during the next several months. Several consultants said it may be between six months and one year before a definitive agreement is reached, the report states.

To access the full report, click here.

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