Jan 23, 2017 5 min read

Information that appeared Monday on Washington County’s website confirmed what has been a topic of discussion since late November: the county seeks proposals from potential purchasers of its health center to reduce costs to taxpayers.

The health center’s finances were last in the black in 2011, and it has lost more than $9 million in revenue since then. This year’s subsidy of the 288-bed facility could reach $4 million, according to estimates.

“We’re following the fourth-class county code, and we’re being transparent,” said Scott Fergus, Washington County director of administration, whose name appears in the posting as the local contact.

The nursing home in Arden, Chartiers Township, was built in the 1970s. It also provides rehabilitation, care of patients who have Alzheimer’s disease, adult day care and other activities. All beds are certified for participants in Medicare and Medicaid programs.

As part of the 24-page request, the county wants assurance that the buyer will provide long-term care for residents over the next 15 years and a declaration of how many beds it plans to dedicate to nursing home care.

Its objective is that the facility continue as a provider of high-quality care with access to long-term care for “the indigent and vulnerable.”

The health center has achieved a four-star rating from the state, and any entity submitting a proposal “shall clearly state its willingness to accept and serve Medicaid residents,” according to the online advertisement.

Prospective buyers also are required to identify the percentage of their existing resident population “by payor class.” It must identify any means- or asset-based admission requirements at its existing facilities, as well as any such requirements it intends to impose at the health center, or a statement that it will not impose requirements on health center residents.

The health center has 305 employees, including 276 full-timers and 29 part-timers. More than 200 are members of Service Employees International Union/Healthcare.

The county also set among its policy goals “a fair and equitable transition to the private sector for county employees, including ensuring current employees” receive first consideration as employees of the new operator. A would-be buyer must describe its experience in retaining the staff of other facilities it has acquired, and address in detail its plans for those covered by the current union contract. It must state whether it has any union employees and which bargaining unit represents them. It also must adhere county’s non-discrimination policies.

Proposals offering a more certain commitment to retain and hire health center employees will be more heavily weighted in the evaluation.

Although the county names no price, the posting on its website states that the county is seeking to “maximize the return on the public’s investment in the health center.”

The county is seeking from potential buyers in-depth information on their qualifications and experience in long-term care, how they will address all of the county’s requirements, a price proposal and evidence of the capability to fully consummate the sale. Washington County also wants to know the potential buyer’s plans to expand the health center, “maximizing the use of technology in operations as well as its track record for reinvesting in other facilities it owns or operates.”

The county reserved the right to visit other facilities owned or operated by the entity submitting a proposal and to scrutinize its regulatory history.

The county also imposed a gag order on potential buyers, including in its information, “Proposers shall not issue news releases, Internet postings, advertisements or any other public communications pertaining to this transaction without prior written approval of the county, and then only in coordination with the county … A proposer who, without the express written consent of the county, shares information contained in its proposal with other county officials or personnel may be disqualified.”

The county also wants to know the financial fitness of a buyer, excluding those with “delinquent obligations to the commonwealth” such as state tax liabilities, and whether the potential buyer has been suspended by the state. The county wants to see liabilities such as taxes, unemployment compensation and workers’ compensation. Any entity from within Washington County submitting a proposal to buy the health center must have paid all real estate taxes.

The county has selected a committee to review and evaluate responses subject to the approval of the county commissioners. Fergus said, “We’re not sure who’s going to be on the committee at this point.” They would be named, he said, “in time to review the applicants.”

Although the tract of county-owned land surrounding the health center is approximately 49 acres, the sale will exclude slightly more than 29 acres, including the seven-acre Potter’s Field cemetery for residents of the health center’s predecessors, the county homes for aged men and aged women; a field that is used for overflow parking during the county fair; the former youth detention center at 50 Old Hickory Ridge Road, which is earmarked to become the new offices of the Washington County Conservation District; and beyond that, an 18.37-acre hay field.

The 19 acres included in the sale include the facility site, the driveway, parking lot and green space.

The deadline to submit questions is Feb. 22, and the deadline for proposals is Feb. 28. The county is allowing another month for followup questions, information requests and interviews with prospective buyers. The law firm Eckert Seamans Cherin and Mellott LLC of Harrisburg, in conjunction with the county, will identify qualified buyers and invite them to submit best and final proposals, which are due in Harrisburg April 7.

The county reserves the right to reject any or all proposals.

Potential purchasers can schedule tours of the health center by emailing the law firm at healthcenter@eckertseamans.com.