Support and skepticism heard by county officials for WMC sale to Banner Health

A bicyclist crosses the street at Second and Conwell near the Wyoming Medical Center in Casper. (Dan Cepeda, Oil City)

CASPER Wyo — A mix of skepticism and support were heard again by the Natrona County Board of County Commissioners regarding the proposed sale of county-leased Wyoming Medical Center (WMC) to Arizona-based Banner Health. The commissioners heard a second round of public comments their regular meeting Tuesday, July 28. Answers to questions asked at the July 22 special session are being uploaded on the county’s government website.

Jessica Oden, chairwoman of the WMC board of directors said said that WMC’s board of directors had done its due diligence and determined that Banner was a “natural fit” for continuing the hospital’s mission to “grow access to high-quality health care close to home.” Banner currently operates hospitals in Worland, Torrington, and Wheatland, and under the agreement, WMC would become the “hub” or “flagship” hospital.

Dr. John Paul Jones, a urologist and WMB board member told Oil City News the deal with Banner was a “membership substitution agreement.”

“That means Banner becomes WMC,” Jones said. “Same corporation, same charity obligations, same necessary health care.”

“Banner is a non-profit system just like WMC, so they will have the same commitment to providing care regardless of ability to pay,” said Natrona County Attorney Eric Nelson. Furthermore, he said the county would have the contractual ability to enforce this statutory provision.

Banner has agreed to maintain acute care hospital, participate in medicare medicaid or similar. 24-ER, trauma care, women’s care, labor and delivery services, care to prisoners and indigent care.”

The WMC board also said the sale would give them access to Banner’s “strong supply chain and purchasing network.”

The county appoints a Board of Trustees to oversee the operating lease for the facility. The WMC has its own independent board, and both the the county and hospital boards must agree to the sale. Natrona County owns the land, buildings and equipment associated with WMC but does not provide funding to the hospital. “The county does not support WMC beyond the building,” said Dr. Jones.  

Michele Chulick president and CEO of WMC said all staff, salaries and benefits would remain intact for at least a year under the agreement.  “In fact the goal is to add more staff,” she said at the July 28 meeting.

Nelson said the $157 million price point is the result of a 3rd-party fair market price valuation of WMC assets. An additional $50 million from the sale would erase outstanding debt related to the construction of the west tower in 2012. Natrona County would put some of the proceeds — an amount yet to be determined— toward a one-time commitment to the WMC foundation. 

One theme of concern was the loss of independence for physicians.

“Physicians came to Casper for the autonomy,” said a practicing gastroenterologist from Casper. “Every physician, primary care doctor or specialist has the option to work and be managed by themselves or be their own boss. Many choose to be their own boss.” He said that a similar merger in Fremont County had been a “disaster.” 

At the July 22 meeting, former Congresswoman Barbara Cubin said she was concerned that physicians might start leaving because they didn’t want to be employees of an unfamiliar organization. She said WMC was “one of the only places where physicians can still practice independently.”

Cubin also cited a study by the National Council for Compensation Insurance that found that hospital mergers reduce operating costs by 15-30%, but that the average price of hospital services by increased 6%−18%

At the July 28 meeting, Wyoming Senator Charles Scott said the sale was  “a high-risk investment”  and that he hadn’t heard a quantitative analysis supporting the sale.

“They’re a little leery of change,” said Chairman Rob Hendry. “They’re concerned about what their future is, and of course we are, too, because we need all those docs.”

Others were concerned that WMC was undervalued. Al Cantrell said he’d found data suggesting WMC assets were worth far more. He said WMC must be profitable enough on its own to be an attractive investment to Banner. The difference without the agreement, he said, would be that the profits would remain in the community.

Scott Nordlund, chief strategy officer of Banner Health, said “Banner is not a turnaround organization… our core is growth.”

John Masterson, who sits on the WMC board, told the commissioners the acquisition was not something the board had taken on lightly. “I get it that people are hesitant. The board recognizes how precious it is to community and that it is a business attractor.”

Masterson said Banner was the right partner right place right time. “I would love to remain free-standing and independent, but it’s not going to happen” He said in 5-10 years WMC could be choked out rising health costs and vulnerable to invasion by out-of-state hospitals. 

Mark Dowell, Natrona County Health Officer and WMC board member, said medical costs are going up 10% a year and reimbursements were going down. He said the deal wasn’t perfect, but did not not agree that the majority of physicians were against it. “It’s a mixed bag, all physicians are like that,” he said.

Some were concerned that county’s money from the sale would be “eaten up” by general operations, but Hendry told Oil City News that the BOCC wanted to “lock that money up” for future health care costs.

WMC would retain its name and be co-branded with Banner at later date.