By Mark Tosczak
With reporting contributed by Jacob Biba
Though it’s been more than two months since Mission Health announced it had reached final terms to sell itself to for-profit hospital operator HCA Healthcare, N.C. Attorney General Josh Stein’s office is still waiting for information from the two organizations.
Under state law, Stein’s office can take up to 60 days to review the proposed transaction — once it has all the information it needs. Though officials in the attorney general’s office are collecting information, the 60-day clock, as it were, hasn’t started yet.
In the meantime, some local elected officials in western North Carolina have raised questions about the deal, including provisions that could, after time, allow HCA to shut-down hospitals and end services.
The mayor of Highlands, where Mission’s 24-bed Highlands-Cashiers Hospital, said local officials and others in the community are worried about what being owned by a for-profit company might mean, and even if the hospital will stay open.
“We’re worried that our citizens won’t have those services in an accessible area, short of trying to drive 80 miles [to Asheville],” Mayor Patrick Taylor told North Carolina Health News.
Taylor, along with Franklin Mayor Bob Scott and Barrett Hawks, a Highlands attorney who has studied the Mission-HCA purchase agreement, made the nearly 700-mile round trip to Raleigh on Nov. 9 to meet with staff members in the attorney general’s office, including Special Deputy Attorney General Jennifer Harrod, who is leading the review of the transaction.
Highlands town commissioners passed a resolution in September calling for a number of changes in the sale agreement, including an addition that would make it possible for a local organization to buy back Highlands-Cashiers Hospital if HCA were to make moves to close it.
Mitchell County commissioners passed a similar resolution in early October seeking a buyback provision for Blue Ridge Regional Hospital. In early September the Burnsville Town Council passed a resolution that called for Blue Ridge to be returned to the community “at no cost” should HCA stop operating it.
Dozens of western N.C. residents have also submitted letters and comments to the attorney general’s office, most of which are critical of the deal or raise questions about the governance of Dogwood Health Trust, a new $1.5 billion foundation that would be funded with proceeds from the sale.
Mission leaders announced more than six months ago that they planned to sell the health system, which serves patients in 18 western counties, to Nashville, Tenn.-based HCA, a $43.6 billion per year for-profit health care behemoth and the biggest hospital operator in the country.
Mission CEO Ron Paulus and other Mission leaders have, since first announcing their plans, tried to assuage fears that HCA would shut down services in rural areas and even close some of the Mission-owned rural hospitals.
Paulus has said that contract provisions will require HCA to keep hospitals and other services open for five to 10 years, depending on the facility.
But the purchase contract, which has been made public by Mission and the attorney general’s office, contains provisions that would, under certain circumstances, allow HCA to shut down services or even close hospitals before the five-year post-purchase period expires.
The contract specifies that for each hospital in the Mission system, an eight-member hospital advisory board would have the authority to end service lines or even close the hospital. Half the board members would be appointed by HCA, half by Mission. If a majority of each half — three of the four members appointed by each side — agreed, service lines could be shut down and even an entire hospital closed.
“Healthcare is an ever-changing industry with new advancements and treatments constantly being developed,” Rowena Buffett Timms, Mission’s senior vice president for government and community relations, said in a written statement. “At times, certain services may need to be changed, added or discontinued in order to continue providing the highest quality of care close to home for patients.”[sponsor]
Buffett Timms noted that only the local advisory board for each hospital will be able to approve or veto changes in HCA’s post-acquisition agreements for each hospital. These post-purchase agreements will endure for 10 years for Mission’s flagship hospital in Asheville and its CarePartners facilities, which provide rehabilitation, home health, adult care and hospice services. For other Mission hospitals, the post-purchase period lasts for five years.
That, as well as other aspects of the deal, are leaving many in the region nervous.
“If you’re in a small, remote, rural area, health care access is already an issue,” said Taylor, the Highlands mayor. “I think the smaller units that will be part of the sale, they’re concerned that when a corporation will look at the numbers and they’ll just look at it as profit and loss and tend to not invest in smaller units, and possibly close them down.”
An HCA spokesperson declined to comment on the deal.
Citizens weigh in
Elected officials aren’t the only ones with doubts and questions about the deal.
Scores of people have submitted statements to the attorney general’s office about the proposed sale. Of the 72 comments and letters released by Stein’s office under North Carolina’s public records law, most were skeptical at best, and at worse opposed to the sale. They ranged from short, handwritten notes addressed to Stein to longer, typed letters touching on multiple issues.
Sixteen of those comments — most from nonprofits that receive funding from Mission Health — expressed support for the deal.
Other residents weighed in, either opposing the sale outright, raising questions about the sale and the leadership of Dogwood Health Trust, or citing past or ongoing problems with the health system. Eight people, for example, cited a continuing noise dispute between Mission Hospital in Asheville and nearby residents.
Many people raised questions about what impact HCA ownership might have on rural hospitals in the Mission system and on how medical services are delivered to communities outside Buncombe County, where Mission is based.
“Mission’s track record with rural hospitals and HCA’s track record with rural hospitals is dismal as is HCA’s track record with Medicare and Medicaid fraud (as recently as 2011),” wrote Jean Hunt, a Burnsville resident.
“We understand that rural hospitals all over the country are at risk and challenged because of the populations they serve i.e., the poor, the uninsured, the elderly, and the chronically ill,” she wrote. “We are unable to protect ourselves against megalithic corporations like Mission and HCA who view the world through the eyes of $$$[sic].”
Mission officials have said, since they first announced the transaction, that the HCA agreement was the best way to ensure western North Carolina counties still have access to hospital services as pressure grows from the government, employers and insurers to control health care costs. Mission leaders have said the acquisition by HCA will allow the health system to save money by tapping HCA’s purchasing power and vast economies of scale.
“The only way that we can get further efficiency is by becoming larger, and the only way to become larger is through something like this deal,” Dr. John R. Ball, chairman of the Mission board, told an Asheville community forum in August.
Others expressed worries about how the Dogwood Health Trust, the foundation formed to receive the proceeds from the sale and whose stated mission is to improve residents health by tackling social determinants of health, will be governed. They argue that Dogwood, which will also be charged with enforcing the terms of the sale agreement, needs leadership that’s independent of the current Mission board.
“I am specifically complaining about the lack of transparency in the selection of Directors for the Trust,” wrote Elizabeth Schultz of Burnsville. “I recently learned that six Directors have already been appointed, with no input from the counties who are supposed to benefit from the Trust. Furthermore, all six are current or former Directors or managers associated with Mission Health System.”
She asked that Stein take control of the process of appointing Dogwood Health Trust board members.
“I call upon the Attorney General’s office to dissolve the Board of the Dogwood Health Trust and to require, as a condition of the sale of Mission Health System, that an independent body or consultant be hired by Mission to: 1. Listen to the communities involved. 2. Then develop criteria for selection and who shall be represented. 3. Select the board based on community generated representation and selection criteria,” she wrote.
Of the nine Dogwood board members who have been announced so far, eight are either current or former members of the Mission board or have served on the boards of Mission-run hospitals. Mission leaders have said they are seeking board members with the appropriate skills who can represent the entire region.