At the July 31 Board of Governors meeting of Highland District Hospital, the Board took action to begin working with the Joint Township District Hospital Board (Township Trustees) to explore and approve the transition of Highland District Hospital to a not-for-profit hospital.

At the July 31 meeting, the Board of Governors participated in a video conference with St. Mary's Hospital personnel Kevin Harlan, president and CEO; Jeff Vossler, vice president of financial services; and John Bergman, board member, to obtain additional information regarding converting from a governmental hospital to a not-for-profit hospital. St. Mary's converted from a governmental to not-for-profit hospital approximately 20 years ago.

The Highland District Hospital Board of Governors include Bill Edenfield, Trever Elam, Becky Miller, Larry Parker, Dwight Creek, Dwight Crum, Barbara Yochum, Patti Herron, John Knechtly, Dave Stratton, Jim Phillips, Chris Michael, Joe Fraysier, Erica Hurless-Miller, Dr. Dave Gunderman, Tom Black, Larry Burns and Dave Hamilton.

The board entered into executive session at 6:35 p.m. to discuss the strategic direction, on a motion by Mr. Stratton, which was seconded by Mr. Black. The Board exited executive session at 6:54 p.m.

After the executive session, Knechtly made a motion to recommend that the Joint Township District Hospital Board explore and approve the conversion. The conversion will result in the development and execution of a lease arrangement between the Joint Township District Hospital Board to the new Hospital organization under the Ohio Revised Code, section 513.171 - Lease of Hospital to Charitable Organization. The Board will establish a committee to present the recommendation to each township and eventually to the Joint Township District Hospital over the next six months.

The motion was seconded by Stratton.

The motion carried by a 12-3 vote, with two members absent.

"The hospital board and leadership are committed to remaining an independent community hospital and value their relationship and heritage as a community hospital," Jim Baer, Highland District Hospital President and CEO, said in a press release.

"The healthcare environment continues to change at a rapid pace. Obamacare and healthcare costs will financially challenge the nation and Highland County. Highland District Hospital is a financially successful, independent community hospital.

"The hospital board recognizes this is a big decision and will establish a committee to meet with each of the township trustees to discuss this action and what it means for the future of the hospital.

"This action was prompted by a recent Government Accounting Standards Board ruling that will require government hospitals (and other government entities) to book a liability on their balance sheet for employee retirement. This will negatively impact the hospital's ability to borrow funds for future building projects and capital equipment.

"Changing the structure to a not-for-profit organization will provide opportunities to improve financial performance and assure continued quality of care and service to the community, while keeping the community involved in operations and governance.

"Highland District Hospital will have the same organizational structure as 76 percent of the Ohio hospitals. Of the remaining hospitals, 10 percent are government-operated and 14 percent are for profit."