Wyoming Medical Center Pays $37M For Mountain View Regional Hospital
The Wyoming Medical Center received the go-ahead Tuesday from the Natrona County Commission to obtain a loan to buy the Mountain View Regional Hospital.
The Wyoming Medical Center does not anticipate rate increases for its patients as a result of the approval of the $37,000,000 bridge loan, medical center spokeswoman Kristy Bleizeffer said after the meeting.
In April, the Medical Center announced it would buy the Mountain View Regional Hospital, which began as neurosurgical hospital after a bitter fight that started 15 years ago between a group of neurosurgeons and the WMC's administration.
The WMC hired Dr. Robert Narotsky in 1999 to bolster its neurosurgery program, and Narotsky in turned hired three other neurosurgeons. The WMC's administration initially allowed the neurosurgeons to recruit their own operating room team. The WMC's board of directors terminated that contract in October 2005. The neurosurgeons resigned their privileges the next month, began construction of Mountain View, and added more physicians.
In the April announcement, the Medical Center's CEO Michele Chulick said in a press release that the hospital will be able to expand with the acquisition of the 23-bed Mountain View from its affiliates Irving Place Capital and the surgical hospital's physician partners.
The two institutions appear to have buried the hatchet, according to Chulick's press release. “We are very excited about the additional services and presence that we will be able to offer through this acquisition."
Bleizeffer said negotiations about the acquisition began last fall, including discussions about how to pay for it.
The loan will become due by December 2019.
Bleizeffer said in the meantime the Wyoming Medical Center will find financing to pay off the bridge loan and buy the Mountain View Regional Hospital.
The loan process illustrates the relationships among the Wyoming Medical Center, Natrona County, and the board of trustees called the Memorial Hospital of Natrona County.
Until 1986, the county owned what was called the Memorial Hospital of Natrona County. That year, the county decided to get out of the hospital business and the nonprofit Wyoming Medical Center, Inc., was created with its own board of directors.
However, the county still owned the physical plant of the hospital, which is mostly located in the 1200 blocks of East Second and East Third streets.
The nonprofit Wyoming Medical Center leases those county hospital assets, and the lease is monitored by the Memorial Hospital of Natrona County five-member board of trustees. The Natrona County Commission appoints the trustees.
The Wyoming Medical Center's lease requires its to provide charity care for those who cannot afford to pay, provide care for prisoners at the county jail, and to maintain the value of the county's hospital's assets. The value of those assets rose from $62.9 million in 1995 to $288.7 million in 2017.
With those relationships in mind, this is how Tuesday's deal played out:
The Wyoming Medical Center's board of directors, the Memorial Hospital of Natrona County board of trustees, and the Natrona County Commission gathered in a meeting room at the hospital.
Barbara Bonds of the Cheyenne firm Freudenthal & Bonds, P.C., detailed some of the aspects of the bond, saying Natrona County is neither morally nor legally responsible for paying off debt, because that is the responsibility of the Wyoming Medical Center, Inc.
The paperwork will be finished Tuesday, and it will be passed along to the Royal Bank of Canada to issue the loan.
Michael Persichitte of RBC Capital said the Wyoming Medical Center has a Moody's rating of A3, which is excellent for hospitals and especially hospitals of the size of the Wyoming Medical Center. The short-term bridge loan fits on a refunding bond from 2017, and a 2011 hospital revenue bond of $2,225,000, Persichitte said. "It's all meant to be net pledged revenues of the hospital.... We didn't try to do anything funky with it."
Then the three boards met in quick succession.
WMC Board Chairman John Masterson called that board's meeting to order to propose a resolution that "the Corporation (the WMC) in conjunction with the Hospital Board, has determined that it is in the best interests of the Hospital and the citizens of Natrona County that the County issue its 'Bridge Loan Promissory Notes (Wyoming Medical Center Project)'" for a $37 million loan to buy the Mountain View Regional Hospital.
That resolution passed unanimously, and the WMC meeting board adjourned.
The Memorial Hospital board of trustees was next, because it's the WMC's link to Natrona County. Board Chairwoman Serena Cobb called the trustees to order, and they recommended and unanimously approved a similar resolution.
Finally, Natrona County Commission Chairman John Lawson called the commission to order. Only the county, as the owner of the hospital assets, can approve the acquisition of debt by the Wyoming Medical Center. The commissioners recommended and unanimously approved -- commissioner Matt Keating was not present -- the resolution to authorize the bridge loan.
After those meetings concluded, the heads of the three boards and their lawyers, and those involved with the covenants, agreements and other documents stayed to sign the paperwork.
"Thank you all for the most expensive five minutes," Masterson said at the end of the meetings.