- (female announcer) Production funding for Behind the Headlines is made possible in part by the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you, thank you.

- The future of Regional One, tonight on Behind the Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

I am joined tonight by Dr. Reginald Coopwood, CEO of Regional One Health.

Thanks for being here again.

- Thank you for having me.

- Absolutely.

Along with Bill Dries, reporter with The Daily Memphian.

We'll talk a lot about the future of Regional One and the present, but the news now is that you bought some land and made some news with that, but give us the quick snapshot of this, what is it, 16 acres, a $25 million purchase near the Medical District.

Why that land and what comes next?

And then we'll break all that down in much more detail.

- Well, you know, our original plan was to build on our current site and which was gonna require tearing down some buildings, building up half of it, tearing down some more buildings, and building up.

The second half, which was going to be a long project, which was gonna be expensive, a little bit more expensive, which was gonna be very disruptive to patient care.

So, our consultants that are helping us with the project management said, "Is there any land nearby greenfield, brownfield that we could consider putting the whole hospital on?"

And so that's when we talked with our brokers at Universal Real Estate, commercial real estate.

And they came back and said, what about The Commercial Appeal site?

And we went and looked at it and saw that it was a viable potential for this project, having enough footprint for building a hospital in one spot.

- And just to orient people, the Commercial Appeal building is on Union- - Correct.

- There is a bunch of land back there.

The press was back there.

And then there were some other parcels that again, has now been assembled into this 16 acres.

That building was, and there's been lots of questions about this and I think we talked about it.

Bill and I did on a recent roundtable that it was retrofitted after The CA had sold it.

And during COVID, it was retrofitted $60 million from the Corps of Engineers during COVID to be a kind of, not so much a hospital, but a maybe an overflow facility for people who were sick.

- Correct.

- People have asked, well can that be taken advantage of for this new Regional One?

- So no, it can't.

They repurposed, I think it was the office building part of the property and it was really kind of a big MASH hospital and it does not have current hospital codes for anything that we could use.

- A couple of quick questions.

I'll get Bill in, just the overall cost of this.

You've talked about as much as a billion dollars over as much as 10 years.

Is that still the rough sticker price?

- So I think the billion dollars is still a good number.

Our consultants are right now programming what would go in it kind of programming.

Then we will identify architects and engineers that will do the design and then we will have a good number of what the project will be.

We used to say, you know, back of a napkin, it takes a million dollars a bed to build a hospital.

And that's just... That for a long time was a number we used.

That number's about two and a half million dollars a bed just because of the increased cost of labor, increased cost of goods that's really has happened since COVID.

- And that 10 year timeline still roughly- - We feel that we will be able to take two or three years off by being built as a single entity.

- Yeah.

What happens to the old buildings?

- Well, the old buildings are owned by the county.

- Okay.

- Our recommendation will be that they come down and create some type of green space for the county to decide what then to do next.

The last thing we want is another empty building with broken windows and graffiti.

- Yeah, yeah.

Let me bring in Bill.

We'll get through some more details.

- And Dr. Coopwood, I believe at this point, you don't know what is gonna go where in in the footprint.

That's-- - Correct.

- That's still being determined.

- Correct.

- The building was used as a place where printing took place and as a result of it, there were some questions about environmental concerns.

- So our brokers engaged a environmental firm.

Tioga has an office here in Memphis.

They've done extensive phase one and phase two environmental concerns test.

That has been sent to the state.

TDEC will be the entity that will ultimately say if there's anything environmentally that will prevent us from doing, building a hospital.

The standards I understand has to get to a residential standard and they feel that what we've seen so far is no difference what has been seen in that part of town, in the Medical District, all along there where there was car lots and all.

But so we have not run into anything that gives us any pause that we'll be able to successfully put a hospital there.

- What specifically triggered you and the consultants to look at a new site for this?

- It was really the, probably the difficulty it was gonna be.

And we had a very high-level engagement, an engagement that gives a really high level possibility of where there was a large UT building right there on the corner of Madison and Dunlap.

And that was gonna come down and we could build, theoretically build phase one.

Logistically, everyone knows that our number one service that we provide for this this community, and the community depends on us, is our trauma center.

And it was gonna be difficult to put the trauma center in phase one.

And so here you have a five- or six-year build of half of the hospital that more than likely would've had women's services or NICU.

And then when that's complete, you would tear down where our women's services are and build phase two and there's the trauma center.

So we're looking at seven, eight years of really having the ability to put in a new trauma center, which is so severely needed in this community.

And this new site gives us the opportunity to program and design so that our core services that we provide can be in the very first phase of the build.

- And I would imagine there are things in the new design that you can just do because it's a blank slate versus kind of the dance of, okay, we're doing this over there and then we're gonna come for this part.

- Absolutely.

Absolutely.

And that's one of the things that excited our consultants and excited us is the ability to do that.

And our brokers, Darryl Cobbin, who leads that said, the possibility or probability of cobbling that many of acres together in kind of the Medical District was improbable, but we were, and we're still identifying properties that are nearby to be able to include in this whole piece of property that we would want to build a hospital on.

- Right.

And there are still four parcels that the County Commission, I believe has on their agenda for a week after we're taping this.

- Yeah, I should note that we're taping this and this is airing a week later.

So some things may have developed in the week before this airs 'cause of my schedule.

But go ahead Bill.

- So what happens to what's currently Regional One's campus?

- We don't know.

And I say that because this is what four weeks into knowing that we were probably gonna move, but as I said, none of the buildings except our outpatient center and area where our burn center are seismically appropriate.

So I would think that the buildings that are built in 1950 and those on stilts probably need to come down for safety reasons, come down to reduce blight in the area.

Whether or not we move our outpatient facility and the facility where our burn center is are decisions that we'll have to make going forward.

- Let's talk about again, the billion dollar round number that you've talked about.

The County Commission, I believe it was last year, committed to $350 million over 10 years.

You've been on the show before, you've been up at the state for the last few years, lobbying for another 400 to 500 million.

You were hoping that would come out in the initial budget that the governor put forward, wasn't in there.

But there's a lot more that often gets added into a supplemental budget.

How do you feel about the prospect of the state money and then what are other sources, if any, for this this plan?

- So I have to remain encouraged until I find out there's nothing there in the supplemental budget.

So I'm encouraged that my meeting with Governor Lee and our meetings with his staff over the summer into the fall were fruitful and that they'll still try to put some significant dollars in the supplemental budget.

You know, there'll be a finite amount of money with an infinite amount of projects, and we are just hopeful that our project will rise to the top to where they will consider it.

The other thing is we will, and our foundation is gearing up for a philanthropic campaign, a comprehensive capital campaign to raise funds for part of those dollars.

That should probably be kicked off the next couple months and the community will know what that number is and then we will continue to look for corporate sources to want to participate as well as if we have to, and our financial projections allow to the consideration of going to the market for some money.

- So raising some debt?

- Correct.

- Yeah.

Is it all or nothing?

I mean, or do you got a certain amount committed and you can do certain things over on the new site and leave other services at the existing facility?

Or is it we gotta do everything over there or we can't build?

- So our consultants, what I asked them to do is give us a program full everything on the site that has a cost to it, X, and then what we'll be able to do is if we have half of X dollars to build it, how do we stage it in such a way?

So if this is gonna be a five to sever-year process, it still gives us five to seven years to identify further funds to be able to fund the second.

- That is possibly, if not ideal, to have certain services provided over on a new, you know, a half a mile away kind of facility.

And then just keep- - Absolutely.

- Okay.

Regional One is owned by the county.

Let's get in the weeds here for a second.

Is it a separate entity or is it a division of county government?

- So the assets are owned by the county.

Shelby County Healthcare Corporation, which is the 501[c][3] that is over Regional One Health.

Regional One Health is a DBA for Shelby County Healthcare Corporation is a standalone 501[c][3] that back in the 80s was set up to manage the county's assets for them, run a hospital as long as it provides care for the county's prisoners and indigent population.

- And one more question again in the weeds here of it's a brutal business, right?

Hospitals just generally are a really difficult business.

Healthcare is a really difficult business.

We can circle back to some of those factors if we have time.

But on a given year, obviously take COVID out.

Does Regional One, it's a nonprofit, but does it have a net surplus?

Does it have a net loss that you then have to go and backfill that money?

I mean, what are the round number kind of economics of a normal year, taking COVID out, normal year for Regional One?

- So for a normal year...

So I've been in this position for 15 years and so we've done, this is our 16th budget that we've done.

For the 15 years that we've operated this hospital, we have cash flow positive meaning when you look at our bottom line at the end of the year, and it is the loss.

So we might have lost $10 million, but in the budget there's $18 million of depreciation, which is a non-cash item.

So we have cash flowed positive for the last 15- - Including COVID?

- Well, including COVID.

But the asterisk there is we got some COVID funds in order to help offset the excess costs.

- All right.

We'll come back to Bill here midway through show.

- Alright.

The other thing that's been discussed is the idea of the state through the University of Tennessee becoming a co-owner of Regional One in effect with an academic medical campus.

Is that still on for this?

- So, that's my preference because I believe that this community deserves a true academic medical center.

We have a medical school here that's been here over a hundred years.

And the level of care, the type of physicians that you can recruit to that kind of environment is something this community needs.

There are people in our community who leave Memphis for care because they feel they can't get it in this community.

And I think that's...

I think that's a shame that we as a healthcare system broadly aren't providing all those aspects of care that are available.

I grew up in Nashville.

Vanderbilt University Medical Center was that academic medical center.

It did not put any of the other hospitals out of business.

But when I had a tough case that I might have been technically able to do, but there was the best place for that patient to be, I would transfer them to Vanderbilt University Medical Center where the physicians, nurses, technicians, and all were available to take care of that patient.

We don't have that here.

And I think that's part of the vision.

And if the state puts in that the kind of money that we've talked about, then we would probably work to recreate a new kind of governance/ownership where the state and the county share in that because the dollars have come from both of them.

- If that happens, is the hospital built to accommodate that physically or is there a different plan if there's not a partnership with UT?

- So the hospital won't necessarily change from a clinical space.

There may be, if we're looking to go to an academic medical center, there may be more research buildings that may need to be in and around the footprint.

There may be... We train over 200 residents right now for the University of Tennessee.

So we're their primary clinical site for their training of their medical students and their residents.

And so that won't go away just because we don't have an official academic medical center or a co-ownership.

But we want to be able to see if we can't enhance that with the new relationship going forward.

- Right, because those 200 students who are at the hospital now, it seems that with a medical academic center that there's more of a two-way street in terms of patient care.

- Absolutely.

- The academic aspects you just talked about, would that be over and above the billion or the billion?

Does that billion dollar, and I know it's a rough number, but does that billion dollars contemplate this partnership that you just described?

- So yes.

So the billion is really a good number that we, so far that we know that construction costs will be.

There's still FFF&E where we still have to buy CT scans, MRIs and all that expensive metal equipment.

So it's another couple hundred- - Which all could change if you've got this partner, this really tight partnership that you want.

- Absolutely.

- We were... With eight minutes in the show, we were talking recently on a roundtable about, you know, highlighting some real not great government entities right now, which include MATA and we were talking a lot about the situation with the Memphis-Shelby County School Board.

I'm not gonna ask you about those two entities and I'm sure you're too smart to want to comment on those.

But it came up in that conversation that 15 years ago before you were here, The MED, as it was known then, was one of those headlines in the local paper and then The CA that of a failing entity and an entity that was not doing well and is it gonna make it and what's gonna happen?

And so when you look back, you just talked about you've been cashflow positive, including through COVID, even with that money, that's still, not all hospitals were necessarily.

What was, for those who don't remember, what was the state of The MED when you got there and what did you do to change it to be the viable institution it is now, even if it is an aging facility and so on and so forth.

- Wow.

So it's doing and handling business as business should be done, building a team of individuals who are focused on the success not only on the financial success, but the clinical success of the organization, the quality, the patient experience.

We've focused on all of that for these past 15 years.

You know, the statement that says if you, what is it?

If you don't plan, you plan to fail or whatever that is.

I mean, there was...

They weren't doing budgets at the beginning of the fiscal year.

And so there's just no way you can be successful if you don't have a good plan going into the fiscal year.

So a lot of those things were just putting in sound business practices with the money that was available to us and putting together a team that was aligned for the success of the organization.

- And as I remember it too is as you had success in turning the ship, you had more success.

People were more willing to put some more money in, that progress beget confidence of funders, be that government or phil... Is that a fair thing as well?

Or am I making that up?

- So yes.

Our foundation has become more successful as we've gotten out of the newspaper of a failing institution.

The other thing is, when I came to town, The MED was strictly for trauma and people with no insurance.

So the community was clear that if I have insurance, I don't need to go to The MED.

And so we said we have to change that dynamic and that understanding in the community.

And so we've built services, we've changed our quality.

We remodeled the facility that we have where our percent of uninsured was in the mid-30s percent, and the amount of insured patients was a very small fraction of those who came through trauma.

But over this period of time, we've changed that dynamic, not by pushing out the uninsured, but by creating the services that those with insurance and with choice would choose Regional One Health.

That also improves the financials and the bottom line of the organization.

- Bill.

- Health care here in the hospital business has been known to be competitive at times.

At times.

Yeah.

But I often wonder when I hear some tremors from that about what would be the impact on places like Baptist and Methodist if Regional One wasn't here on all of the other hospitals.

- You just take trauma.

It would be... We have over 13,000 to 14,000 trauma patients that come through our trauma center.

Over 6,000 of them are admitted.

The majority of those are admitted are extremely sick and require intensive medical care.

We have four operating rooms that are staffed and open 24 hours a day.

That would have to be absorbed by these other institutions who are... they're fine institutions, but they're not set up to take on that level of capacity and trauma.

So the great outcomes that our trauma surgeons, our trauma nurses do on a daily basis would be impacted if you just all of a sudden sent every car wreck to every other hospital.

And it's only because they're not set up to do it, not because they're bad hospitals.

I have nothing bad to say about the other hospitals.

- Right, right.

- And it would impact elective care because now all your ORs are tied up doing emergency stuff and so it'll affects elective care.

So those individuals who are going for elective care would have to wait for those kind of things.

- And we really got a good look at some of those problems during COVID.

- We did.

- And it wasn't pretty.

- It wasn't.

- With a couple minutes left here, we can do a whole show on some of these things.

Talk about the uninsured, what is the percent uninsured now?

I should have- - We're around 18%.

- From that 30-plus percent?

- But it's not less people, it's just a less percentage.

- Less percentage.

You know, there were some talk of, you know, Tennessee never expanded Medicaid when Obamacare came along.

Mississippi did in the last couple years.

- Arkansas.

- Excuse me, Arkansas did.

There's been noise about Mississippi.

I think they got through the House and not the Senate or something like that.

I mean it's a whole new world at the federal level, but at the state level, you spend a lot of time there.

Is that one of those things you're also optimistic until you're not?

Or does it seem unlikely?

- It's one of those things we're optimistic about every year and it hasn't come to fruition.

- New administration and without being political, just, I mean, just the reality of a lot of change.

And there's a lot of federal money that goes to St. Jude's certainly, other, I think UTHSC.

I can't remember if Regional One is on that list in terms of federal grants you guys get, in terms of research- - We get some, but not as much as-- - Do you see changes from the federal level that, you know, there's talk of Medicaid cuts, again, not the Medicaid expansion, just basic Medicaid.

What do you see without being political from the federal government right now?

- We see uncertainty and, you know, the areas that they've gone into, they haven't really gotten into HHS, Health and Human Services division, which manages Medicare, Medicaid.

If there's significant cutting there of funding through Medicaid services for states, it will have a drastic and dramatic impact if the exchanges are underfunded and we lose people who have insurance through the exchanges-- - Those are the ACA, Obamacare exchanges where people can get insurance not through an employment.

- Those are the uncertainties because we don't know if they're gonna go through there with a scalpel or a chainsaw.

- Yeah.

Off the cuff, what percentage of your patients are on Medicare?

- Right now, we're almost at 30% on Medicare.

- And then- - Another 30% or so TennCare and then insurance.

- I have so many more questions, but I can only give you 20 seconds to answer and these are complicated things, so I think we will leave it there.

We'll continue to cover this obviously in The Daily Memphian as you go through the legislative session and so on.

We really appreciate having you here again.

Bill, thank you as well.

In the coming weeks, we've got Police Director CJ Davis.

We've got folks from the Memphis Shelby County School Board, as I mentioned, talking about some of the turmoil that's been going on there.

And if you've missed any recent episodes, we had folks from the Republican and Democratic parties locally.

We had County Commissioners, City Council, Mayor Harris, and Judge Sugarmon, all that you can get at wkno.org, The Daily Memphian or go to YouTube and search for "Behind the Headlines".

Thanks very much.

We'll see you next week.

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