Montgomery City Council considering healthcare authority to fund hospital care

The Montgomery City Council is considering forming a healthcare authority to finance hospital care.

If approved, Montgomery would join the many cities and counties in Alabama that have created a healthcare authority to operate and finance their public hospital.

Huntsville Hospital, Decatur-Morgan Hospital, North Alabama Medical Center in Florence, DCH Health System in Tuscaloosa, Whitfield Regional Hospital in Demopolis, RMC Anniston and East Alabama Medical Center in Opelika are among the hospitals in Alabama that operate under the Health Care Authorities Act of 1982 and 1984.

Montgomery is home to Jackson Hospital, a privately owned hospital that recently emerged from bankruptcy, and Baptist Medical Center South and Baptist Medical Center East, both of which are owned by Baptist Health.

A resolution establishing the healthcare authority will be presented to the Montgomery City Council and the Montgomery County Commission on Oct. 20, according to Tiffany Alexander of the mayor’s office.

As for funding, Alexander said there is “precedent for millage that would have to go on the ballot,” but that would not be addressed this year.

This year the mayor’s office is looking to the state’s Rural Healthcare Transformation Initiative for funding. The city would not be eligible, but the county is. Jackson Hospital could draw funding from there because it is a regional referral hospital, Alexander said.

The decision to create a healthcare authority comes after a turbulent year for Jackson Hospital. The state of Alabama authorized up to $40 million and bond proceeds for hospital infrastructure to help save Jackson Hospital after the hospital announced it was about to close.

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“After (Jackson Hospital) emerging from Chapter 11 last month, we said that that was a great step, but it was not the final step,” Montgomery Mayor Steven Reed told the Montgomery City Council on Oct. 6. “We know that we need a standing, accountable public structure that can help protect healthcare access for the long term, not just at Jackson Hospital, but at [Baptist Medical Center South], as well as other medical providers in our community.”

Reed said that forming an authority does not mean that the city wants to purchase or “take over” Jackson Hospital.

“We don't want to be in the hospital business,” Reed said. “But we believe creating the Healthcare Authority of Montgomery provides legal separation between the city and hospital operations.”

The healthcare authority would be a separate legal entity, which would protect the city’s taxpayers from debt, pension obligations and malpractice liabilities at Jackson Hospital. The authority would ensure access to healthcare and financial oversight, Reed said.

According to the city of Mongomery, the Montgomery City Council and the Montgomery County Commission would each appoint three members, and the two bodies would jointly appoint a healthcare finance expert. ADECA and the Alabama Department of Public Health would serve in non-voting advisory roles.

The authority creates a “legal structure” that will allow surrounding counties to participate in the future, Reed said.

The Montgomery City Council meets at 5 p.m. every first and third Tuesday of the month at City Hall on 103 North Perry Street. Recordings of meetings can be found on YouTube and Facebook.