By Michelle Price
UCBJ Managing Editor
COOKEVILLE – The Cookeville Regional Medical Center (CRMC) Board of Trustees voted Thursday to purchase the outstanding 50% of the Upper Cumberland Physician’s Surgery Center and become the facility’s sole owner.
“This does meet our strategic planning goals,” said Paul Korth, CRMC CEO. “One of our goals is to continue to increase our surgery market share. This helps protect our market, and it also allows us to perform the GI cases and surgical cases at the center that are being done today.”
CRMC already owns 50% of the surgical center and the purchase price of $1,917,500 will give CRMC complete ownership of the building, fixtures, equipment, overall operations and the facility’s working capital.
The surgical center was established through a partnership between local physicians and CRMC in 2004, with an original investment of $1,300,000. The facility has two operating rooms, three procedure rooms and the necessary prep and recovery areas.
There have been cash distributions to the investors totaling $2,152,000 since 2004, with the last distribution in May 2019.
“It is a good investment for us. It makes both business sense and strategic business sense,” emphasized Korth, while acknowledging that the net profit for the surgical center has been declining over the past several years, and the center has seen declining reimbursements and declining numbers since May 2019.
“We will definitely be looking at ways to make operations more efficient,” Korth said. “We’ll take a look at all the processes, and through process improvement, we’ll hopefully be able to streamline some of them for better efficiency. We’ll also have the benefit of paying less for supplies through the medical center’s purchasing contracts.”
Physicians will still have the option to schedule surgeries at either the hospital or the surgical center.
“We hope to do as much as we can over there, but it is still between the physician and the patient on where they choose to operate and where the patients really want to have that operation done,” said Korth. “It being a very efficient and effective place for surgeries, we feel very comfortable that some of our cases that are being done over here now will be done over there, because it is much easier for the patients themselves to get in and out of that building than it is the hospital.”
CRMC will use its cash reserves to make the purchase, and the purchase will not exceed the capital budget for the year.