This story has been corrected.
A long-simmering financial dispute between the University Medical Center El Paso and the independent El Paso Children’s Hospital is coming to a head in Texas after a partnership deal was struck in 11th-hour negotiations.
After a year-long disagreement with UMC El Paso over takeover plans, El Paso said it will remain independent but work more closely with UMC.
Under the deal, UMC El Paso will have more oversight of El Paso Children’s in exchange for forgiving about $40 million in debt and not attempting to scale back services. Although El Paso Children’s will remain separately-licensed, it will have a new board and a CEO reporting back to UMC El Paso, a 396-bed public teaching hospital affiliated with Texas Tech University.
Until 2007, El Paso was the largest city in the country without an independently licensed children’s hospital. The creation of El Paso Children’s changed that, with 122 private pediatric rooms and the goal of serving the youth health needs of the 675,000-person city.
From the beginning, UMC was a major partner with El Paso Children’s, as a contractor for administrative services, utilities, housekeeping, maintenance and more. Trouble is, El Paso Children’s stopped paying for those services last year, amid weakening finances.
UMC El Paso kept providing the services, to give El Paso time to consider its options, including becoming a part of UMC, which sparked a backlash from some El Paso physicians and community members who have wanted to remain independent.
With four CEOs in the span of two years, El Paso Children’s has accumulated around $30 million in debt, according to El Paso Children’s leaders, or nearly $90 million according to UMC, whose bond rating was being questioned in light of the debt. UMC had proposed taking over El Paso Children’s, with the pediatric hospital maintaining its own board, albeit one that reports to UMC.
“We found the common ground we needed to reach to give our community hope at realizing its vision of a successful Children’s Hospital,” Stephen DeGroat, a member of the UMC Board of Managers, said in a statement.
“The final terms convey the vision that the El Paso Community had in 2007 to establish an independent Children’s Hospital dedicated to excellence in pediatric healthcare for the children of El Paso,” said Rosemary Castillo, chair of El Paso Children’s board of directors and CEO of Bienvivir Senior Health Services. “It is a testimonial to the dedication and commitment that the EPCH’s specialists and subspecialists made to this community when they chose to bring their skills and knowledge to our dedicated children’s hospital.”
The El Paso County Commissioners, which helped create the children’s hospital 10 years ago, still need to approve the terms of the agreement by April.
This story has been corrected. The University Medical Center El Paso is separate from the University Medical Center Health System in Lubbock, Texas.