Feds should guarantee loans for Forum

As Forum Health faces a critical stage in its fight for survival, the community must look at what options are still available that would prevent major Forum layoffs and further disruptions to the economy of the Mahoning Valley.

The hospital system remains in bankruptcy proceedings while dealing with approximately $286 million in debt owed to creditors. Local, state and federal officials along with employee groups and others have been working with the Forum Health board in trying to find alternatives that would allow Forum to stay afloat, and with it, its 4,000 jobs.

During the last several months, I have been working with hospital and government officials to find a way for our local and regional financial institutions to take over the debt owed to secured creditors. For example, some of the banks have federal TARP money that could be utilized. However, the banks need the federal government to guarantee the loans they would provide to make the deal happen.

We’ve asked congressmen Tim Ryan and Charlie Wilson to look into the possibilities of federal loan guarantees for Forum, and while initial inquiries have come up empty, they continue to pursue the matter, including encouraging the Obama administration to find the federal authority necessary to guarantee the loans being sought.

In addition, Mayor Jay Williams has asked the Obama administration to assist Forum in either providing loans, loan guarantees or outright grants to help Forum remain intact in the Valley.

Besides loan guarantee considerations, at the very least, the federal government also needs to take the following actions to allow Forum to save money and put their financial operations in the black.

Medicare formula

First, the federal government must change the formula ascribed to Mahoning County, which would allow for higher Medicare reimbursements to Mahoning County hospitals. Such an action would add $2 million to $4 million to Forum’s coffers, a significant step to improve the hospital system’s financial picture.

Both Forum Health and Humility of Mary Health Partners should be moved from the Trumbull-Mahoning-Mercer core based statistical area (CBSA) to the Cleveland-Elyria-Mentor CBSA.

The Cleveland CBSA pays higher Medicare reimbursements, which are established by a formula that includes wage indexing. The wage index is determined by the wages and benefits for hospital workers in the area in which the hospitals are located.

Area hospitals have been losing millions of dollars a year in Medicare reimbursements since 2005, when their CBSA was changed by replacing Columbiana County with Mercer County in Pennsylvania.

In addition, the federal Pension Benefit Guarantee Corporation needs to take over the pension liabilities of Forum Health. The hospital system should be permitted by Bankruptcy Court to terminate its pension plan so that the liability can be taken over by the PBGC without penalty or further assessment to Forum. If shouldered by Forum, costs of the pension plan would make it impossible for the health-care system to return to profitability.

Forum’s options at this point in their bankruptcy proceedings are few and center mostly on what the Obama administration can do to keep Forum Health and its 4,000 jobs in place.

X Tom Humphries is president and CEO of the Regional Chamber.