Sevier County hospital board declines to renew CEO’s contract
DE QUEEN — The Sevier County Medical Center board of governors voted Wednesday morning to not renew its contract with the hospital’s CEO, Lori House.
The decision came after a specially called Tuesday meeting about the county-operated hospital’s financial problems in which the Sevier County Quorum Court issued a unanimous no-confidence vote in House.
House’s contract is set to expire May 31, and efforts are underway to find a new administrator, according to board members.
On Tuesday, the Quorum Court also voted unanimously to approve $145,000 in pandemic-era tribal assistance funds to help keep the hospital afloat after hospital officials announced the facility would be unable to meet its payroll or vendor obligations by the end of the week.
The hospital opened in January 2023 after Sevier County had been without an acute care hospital since 2018.
Justice of the Peace Callie Efird made the motion for the no-confidence vote after the Quorum Court returned from executive session. Earlier in the meeting, the Quorum Court heard a presentation from hospital board of governors member Mike Branson about the hospital’s financial issues and a path for moving forward.
“This shows where we are and how we have gotten here,” Branson said as he began the presentation.
Branson said the hospital owes approximately $660,000 to vendors who, if they remain unpaid, would risk forcing the hospital to close by interrupting their services.
Branson outlined a path forward for the hospital and fiscal sustainability but said every cost reduction measure will have to be taken. He shared monthly cost reports that detail how the hospital’s net revenue gap has consistently closed
over a six-month time frame: from $700,000 in cash loss in August 2023 to $109,000 in January and $46,000 in February.
“We’re getting to the point where we can keep our nose above water. The problem is we’ve exhausted every means of cash available to us. We can’t go back to the bank. We can’t push our payables any longer. We’re stymied. The only option is to ask for help to get over this bridge,” Branson told the Quorum Court.
Branson also said transparency would be critical for the hospital moving forward. He said there would be a seat on the board for the county judge, a seat for a Quorum Court member and another for someone from the local medical community.
He said board meetings will also be changed from afternoon to evenings so more people can attend.
Branson also noted the need for strong management.
“One thing that’s pretty clear, is we don’t have a strong management system in place that gives us good information on a daily, weekly, monthly basis that tells us how we are performing. That has got to be put in place right away,” Branson said.
In March, a lawsuit was filed against Sevier County and the hospital by a company claiming it is still owed more than $250,000 for its part in the hospital’s construction.
The suit was filed March 8 in the Sevier County Circuit Court on behalf of Gigerich Electrical Inc. of Hot Springs.
Both Sevier County and the Sevier County Medical Center are named as defendants in the case.
The suit claims Gigerich Electrical was contracted in the spring of 2021 to do approximately $3.1 million in electrical work for the hospital.
The suit states the hospital still owes it a principal sum of $257,393.90.
In December 2023, the state’s Legislative Joint Auditing Committee voted to authorize an Arkansas Legislative Audit to review Sevier County Medical Center’s use of $6.25 million in federal American Rescue Plan funds. Sen. Jimmy Hickey, R-Texarkana, requested the audit.
A year prior, the Legislative Council approved the state Department of Finance and Administration’s request for $6.25 million in federal American Rescue Plan funds to assist the hospital in opening.
The funds were to be used to lease and purchase medical equipment and other supplies to provide medical care, as well as furnishings for the new hospital.
At that time, the finance department said the county’s residents approved a 1% sales tax to support construction and operation of a new hospital, and that the new hospital needed additional financial help as it neared its opening because of rising costs resulting from the covid-19 pandemic.