MEMORANDUM

Kenai Peninsula Borough

Finance Department

TO: Pete Sprague, Assembly President

Members of the Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

FROM: Scott Holt, Finance Director

DATE: October 14, 2004

SUBJECT: Ordinance 2004-19-25 appropriating funding of $54,000 from the South Peninsula Hospital Service Area fund balance to provide supplemental funding for the assistance of procuring malpractice insurance for surgeons at the south peninsula hospital

The South Peninsula Hospital Service Area has a contract with the South Peninsula Hospital, Inc., a nonprofit corporation, to operate the South Peninsula Hospital. The South Peninsula Hospital, Inc is requiring its physicians and surgeons to provide their own malpractice insurance. The carrier for the hospital has mandated this requirement.

The two surgeons in the Homer area have indicated they will be unable to continue to operate at the hospital without some assistance in acquiring this malpractice insurance coverage. These two surgeons had been previously exempted from this mandate based on their long-term service history at the hospital prior to this requirement being imposed. This year the carrier for the hospital is requiring the requirement for malpractice insurance be applied to all physicians and surgeons with privileges including these previously exempted surgeons

The South Peninsula Hospital Service Area at its meeting on October 7, 2004 after consideration and motions being made authorized up to $100,000 being transferred to the South Peninsula Hospital, Inc from its fund balance for the purchase of malpractice insurance for these two surgeons. The service area has funds available within its fund balance to assist the nonprofit organization to cover this cost. The administration supports this recommendation.