Needles Commits To Selling CRMC

(August 24)  The Needles City Council on August 22 unanimously agreed to sell the Colorado River Medical Center to Community Healthcare Partner, Inc., a non-profit corporation owned by Bing Lum, for $2.577 million.
The deal comes seven months after the city entered into a previous arrangement with another locally-formed non-profit, Needles Hospital, Inc., to sell the hospital for $3,587,002. Ultimately, that deal fell apart when Needles Hospital, Inc. was unable to close escrow by a stipulated April 26 deadline.
Another entity controlled by Lum, A.M. Pharmacy, which operates contract pharmacies within existing hospitals, had made a competing $3 million bid for the Colorado River Medical Center last year before losing out in that go-round to Needles Hospital, Inc. Lum, a doctor of pharmacology, grew up in Needles and graduated from Needles High School with the Class of 1979.
A.M. Pharmacy is a for-profit company and as such, was at a disadvantage with regard to the takeover protocol for the hospital because Needles voters in June 2010 passed Measure Q, which called for keeping the hospital open and absolving the city of the financial burden of subsidizing the facility by having a non-profit entity selected to run the hospital.
The city of Needles took on ownership of the Colorado River Medical Center in April 2008 after Brentwood, Tennessee-based Lifepoint Hospitals, a for-profit corporation, embarked on an effort to move the institution’s equipment and personnel to Valley View Hospital, another facility it owned in Arizona, roughly 12 miles from Needles.
Because of long-running inadequate billing practices, including failures to invoice Medicare and Medi-Cal as well as insurance companies and patients in a timely fashion, the hospital has lost money while under city ownership, representing a financial liability to taxpayers.  The city created the board of trustees to oversee the hospital, and that panel, together with the city council, came to a consensus that spinning the facility off to an independent operator is the best solution for ensuring that the community has adequate medical care without soaking the taxpayers.
Lum formed Community Health Care Partner as a non-profit entity to be able to make a bid in compliance with conditions of Measure Q. Lum said Community Health Care Partner is an entity entirely distinct from AM Pharmacy, although he said he would be able to call upon the resources of AM Pharmacy and the experience he has in having run that company in operating Colorado River Medical Center. The hospital, together with the 5.71 acres upon which it is located, was covered under the purchase agreement. The city council made several amendments to the draft purchase agreement under consideration August 22 and a finalized version of the agreement will not be available until it is rewritten by city attorney John Pinkney.
Lum told the Sentinel he believes Community Healthcare Partner will be able to “close escrow by the first of the year. We are of course in a situation where the hospital is in need physically, with the building and equipment, and operationally and financially. Those things are up in the air right now and if there is an immediate dire need, I may have to work with city officials to start sooner, but right now I am anticipating getting started at the first of the year.”
Lum said he is looking forward to making the transition in ownership come about and keeping the hospital afloat.
“I want to thank the city council and the hospital board and city of Needles for their thoughtful and thorough consideration of my proposal,” he said. “I am excited by the opportunity to return to my hometown and provide health care services for the Tri-State Area.”

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