In return for extending emergency loans to Charles County's only hospital, elected officials are likely to demand changes in how the institution is managed, several commissioners said in interviews.
Calls for reforms will remain muted while Civista Health Inc. is struggling to overcome billing failures and to meet a mid-January deadline for repaying $5 million in short-term debt, commissioners said.
But eventually Civista will face questions about whether its practice of having two boards of directors is inefficient, and whether it is excessively secretive.
"There will be some changes," said Commissioner W. Daniel Mayer (R-La Plata), who was born in Civista's hospital in La Plata and who counts himself as an ardent supporter of the institution. "They do need to look at their governing structure in terms of how did they get into this mess?"
Executives of Civista Health Inc. on Oct. 18 asked commissioners for as much as $10 million in loans, and they said they needed the money quickly.
Prolonged computer problems had contributed to a sharp drop in billings, and hence in revenues, the executives said. In addition, they said, Civista had exhausted its reserves, in part to build clinics in Bryans Road and Waldorf.
Commissioners took no immediate action and said Civista needs to present a detailed recovery plan before receiving public funds. Such a presentation could occur in two to three weeks, Civista President Christine M. Stefanides said Friday.
Civista's request is significant partly because of its magnitude. A $10 million loan would absorb roughly half the county's reserve fund.
But news of financial stress also strikes deep emotional chords. Civista Health runs the 121-bed Civista Medical Center hospital in La Plata, a touchstone of community pride.
The facility, called Physicians Memorial Hospital from its opening in 1939 until early 1998, was created by residents who banded together to bring health care to what was then a poor, agricultural community.
"Nothing engenders as much community spirit," Mayer said. "I'm not going to let it go down. . . . And no other commissioner is either."
Community ties are reflected in the hospital's involvement with the public purse.
The county has issued about $10.5 million in bonds to finance improvements at the hospital. To ensure those are repaid, the county retains a veto over Civista's assumption of long-term debt.
Civista wants to replace its short-term $5 million debt with longer-term loans. Such a rollover gives elected commissioners influence over the hospital, and the need for more loans creates even more leverage.
"They can't begin to keep that hospital open without our approval," said Board of Commissioners President Murray D. Levy (D-At Large). "They've spent themselves so deep into a hole, they can't get out of it without the county commissioners."
Levy called the two-board structure unwieldy.
The dual structure was begun in early 1998, when Civista Health was formed as an umbrella organization to oversee the hospital, as well as clinics and other medical services outside of La Plata.
The hospital retained a board of directors, and that panel answers to a board of directors at the newly formed Civista Health in Waldorf.
"I don't see the reason for it," said Mayer, the commissioner. "Maybe there is [one]. But they'll have to prove it to me. . . . To me you're spreading your talent very thin when you do that."
Stefanides said Civista's directors routinely assess whether they need to change methods. But so far the Civista Health board sees no connection between the financial difficulties and the governing structure, she said.
"I can't really make that connection right now," Stefanides said.
Stefanides said Civista as a private corporation needs to maintain a degree of confidentiality, mainly because it operates in a highly competitive industry.
She said two county commissioners sit on the two boards, and Civista executives foster widespread informal ties with the community. "I think we are very accountable," she said.
Commissioners said Civista needs to let the public know more about how it operates.
"One of the responsibilities that has not always been met is open dialogue with the citizens," Levy said. "There's a great tradition of confidentiality there."