Deal still could happen with former Columbia North site

by Paul Flemming

SBJ Staff

Cox Health Systems announced Oct. 28 its intention to move operations out of the former Columbia Hospital North after a group of physicians decided not to exercise its option to purchase the building.

Not so, a representative of the doctors' group said.

"That was premature," said Dr. William Campbell, a principal in the group of 10 doctors who held an equity stake in Columbia's operation in Springfield. "Our agreement is we have until Oct. 31."

Campbell said a group of at least 25 doctors, which includes at least seven of the original 10, has formed an operating entity to consider running the north hospital. Questions regarding the cost of renovating the building at 2828 N. National Ave. must be resolved to determine the viability of the doctors' business plan, Campbell said.

A series of meetings, some scheduled after the Business Journal's deadline, remained to make a final determination before the option deadline. In addition, Campbell said the Oct. 31 deadline is not necessarily the end of options for the doctors' group.

Its plans could be carried out, with possible extensions of the deadline that include all, part or none of Cox's previous commitments.

Regardless of the doctors' decision, Cox Director of Public Relations Laurie Glenn said the hospital is undertaking a transition plan for the facility that will close an outpatient clinic and relocate other programs at the North National hospital to its Cox North operation. About 50 employees will be offered positions in other areas of the Cox system.

Cox completed its acquisition of Columbia Hospitals in Springfield July 31. At the time, Cox announced an option on the North Hospital for the owner doctors. Cox committed an undisclosed amount of venture capital, as well as a promise to operate an emergency room at the hospital, if the doctors' group exercised the option.

Campbell said costs associated with getting the building licensed as an operating hospital have risen after state regulators looked at the facility.

The operating group includes physicians who have committed to a $5,000 subscription fee, and that group would lease the building from SGOH Acquisitions Inc., the corporation comprising the 10 original owner doctors.

Campbell said a business plan prepared for the doctors indicated the hospital could function with an average of 17 patients a day, with revenues from those inpatients at 65 percent of total revenues. Campbell said the physicians committed to the project include key specialties to make the project work.

Glenn said Cox's decision was based on the hospital's most efficient use of resources and serving the community. She said a full emergency room and 26 primary care physicians at Cox North means continued service to the area.

A release from Cox said hospital executive are evaluating options for the building after clinical uses are discontinued.

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