Quality. Quality appears to be as good or better than it was before the affiliation, contract management and lease arrangement. There is a community perception that services provided by CHCS are of particularly high quality.

Public Health. The lease will likely provide public health benefits, as up to $300,000 is paid by CHCS to a community charity that provides primary care to uninsured and indigent persons. The lease stipulates a continuation of CRMC's policy of treating all persons without regard to ability to pay. In addition, CHCS makes a yearly contribution to a community-based organization that operates a series of clinics for indigent persons. This has had a positive impact on public health in the area and is seen by many as one of the main secondary benefits of this lease arrangement.

Economic Impact

Use of Conversion Proceeds. The $1.4 million lease payment will revert to the control of the Cleveland County Commissioners. There is currently much debate about what how the lease payment will be used, with public health and medical professionals asserting that it should be spent in the health sector. Currently, the county commissioners appear inclined to use the remainder of the money for the county general fund, although they are soliciting input for alternative uses.

Staffing. There were no appreciable reductions in staffing levels after the lease.

Capital Investment. There are no major plans for capital investment at this time. 10percent of the operating profits from CRMC may be used by CHCS for further network building activities; the other 90percent must be used in the local hospital or community.

Taxes. The hospital does not pay taxes since both CRMC and CHCS are not-for-profit entities; the lease resulted in no changes.

Net Assessment

The lease agreement, begun in October 1997 simply extended a growing relationship between CRMC and CHCS that has been developing for several years. Originally, contract management services were provided and then an affiliation agreement. These arrangements seem to have been beneficial to both parties. The local community will likely gain access to services and technology within the community because of increased linkages with CHCS. It is not clear if the county commissioners or local hospital board have defined long range plans for the hospital at the end of the present lease.