levels of indigent care. Before transfer, WMC tightened billing practices, raising fears about indigent access (such changes may have happened anyway). There is no explicit monitoring mechanism regarding numbers of indigent patients given either inpatient or outpatient care.

Services may expand as a result of conversion. There are no requirements in the agreement to expand services, but by allowing out-of-county partnerships, the transfer likely will increase paying patients, providing an incentive and means to expand services.

Cost. Prices are not likely to be affected by the conversion. WMC is in a very competitive market and could jeopardize its position if it raised prices indiscriminately.

Quality. Quality may improve due to the transfer. WMC's reputation for good quality should not be harmed by the transfer. Six months following conversion, WMC=s JCAHO performance review was better than three years earlier. The transfer should improve employment stability and permit merit pay, allowing WMC to attract higher quality staff. Staff morale already has improved.

Public Health. The conversion may improve public health. Even prior to transfer, WMC already had strong engagement in public health activities. As a consequence of record earnings in the first year following transfer, the Board established a $4 million Community Health Initiatives Fund to fund efforts to improve health status, access or cost-effectiveness of care for the medically indigent.

Economic Impact

Use of Conversion Proceeds. The county's multi-million dollar savings are likely to be spent for many purposes, not just health. Unlike a conventional sale, the county did not directly receive funds as a result of the transfer. However, it will save millions previously appropriated each year for indigent care and bond payments. These savings are not segregated from the rest of the county general fund, allowing the Wake Board to spend them for other purposes and/or reduce taxes.

Staffing. Staffing may or may not be cut due to conversion, but could expand if services are added. WMC has historically maintained lower-than-average staffing and had been expected to increase staff somewhat prior to transfer. By enhancing the ability of WMC to earn revenues, the transfer may result in added services, so staff may grow even faster. At the same time, however, some services such as food service, housekeeping and laundry are being outsourced, which may result in fewer such staff being needed.

Capital Investment. Capital investment may increase following conversion. Net earnings for 1997 were $10 million higher due tighter billing and expense control and the transfer should result in further revenues or savings that could be used to expand services.

Taxes. The transfer will not affect WMC's tax liabilities.

Net Assessment

This conversion appears likely to result in a positive impact on community health by improving the prospects for survival and growth of WMC as it frees the facility to enter into out-of-county partnerships and other competitive barriers. Because management is unchanged, quality and access probably will remain the same or may even improve slightly. There should be a positive economic impact on the community should the added revenues result in new capital investments and hiring.