Connect with us

Rural Health Care

What Will This Multimillion Dollar North Carolina Hospital Merger Mean for Rural Health Care?



Highlands-Cashiers Hospital in Highlands, North Carolina. Photo: Taylor Sisk/100 Days in Appalachia

On December 13, a full page ad in the Highlands Newspaper, in Highlands, North Carolina, was headlined: “Bringing a new state-of-the-art Angel Medical Center. Investing in the future of healthcare in western North Carolina.”

The ad was purchased by Nashville, Tennessee-based HCA Healthcare, a for-profit hospital system that owns 178 hospitals in 20 states.

While heartened by the prospect of such an investment in health care services in Macon County – a rural county with a population of about 34,000 situated in the southwest corner of the state  – a discerning reader might have found this assertion a little premature. A multimillion dollar deal for HCA to buy a health care system that includes six hospitals in Western North Carolina, including Highlands-Cashiers Hospital in Highlands and Angel Medical Center in nearby Franklin, has yet to be approved by the state’s attorney general.

For communities in rural counties such as Macon, investment by a large hospital system could mean expanded access to next-generation health care. But some worry that given the pressures of the industry, that large corporation may see no future in providing services in their community, and pull out. They worry that decisions will be made without their input.

‘We built it’

It takes a good while to get anywhere from Highlands.

The town rests on a plateau within the Nantahala National Forest, and though the county seat of Franklin is just 20 miles away, the first leg of that journey is down a serpentine two-lane through the Cullasaja Gorge. Highlands is home to less than a thousand residents in the winter; quite a few more in the summer.

Highlands, North Carolina, Mayor Patrick Taylor. Photo: Taylor Sisk/100 Days in Appalachia

Ask Mayor Patrick Taylor what Highlands-Cashier Hospital means to his community. His reply: “Everything.”

The hospital opened in 1951, expanded in 1966, and expanded again and relocated in 1993, all with considerable community investment.

“It’s our hospital,” Taylor asserts. “We built it.”

Six years ago, succumbing to the pressures of a changing health care landscape in the U.S. – to rising costs and the push to consolidate – the hospital’s board elected to affiliate with Mission Health, an Asheville-based not-for-profit health care system – the only one managed in Western North Carolina. Mission administrators say the same pressures have pushed them to look for a larger health system to take over operations, most particularly the challenges of providing services in remote areas.

“I understand; we’re a small market,” Taylor says. “I understand the dynamics of what’s going on, the market forces.” He just doesn’t want to lose his hospital.

The Deal

It was announced in August that HCA had come to terms to purchase Mission Health, which owns and operates a large hospital in Asheville and five smaller ones throughout mostly rural Western North Carolina. But the deal must first be approved by North Carolina Attorney General Josh Stein.

The agreement calls for a $430 million commitment from HCA in capital expenditures.

Such investment comes as good news for Western North Carolinians, as does, at least in theory, the announcement of a $1.5 billion foundation called the Dogwood Health Trust that will manage the proceeds of the sale. The foundation will include a governing board made up of members appointed by Mission, with the goal to improve the health and well-being of the communities Mission Health now serves.

But a number of rural residents throughout the region are intent on seeing to it that the deal doesn’t shape up to be Asheville-centric. Asheville, with a population of 90,000, is the hub of Western North Carolina and home to Mission’s flagship medical center, Mission Hospital. None of the counties that are home to Mission’s regional hospitals have a town of more than 10,000.

Rural residents are asking that this deal be of benefit for years to come for the whole of the region – that health care services in their more remote communities don’t get lost in a megadollar transaction.

On its website, Mission offers this assurance: “Understanding the unique, special needs of our patients, particularly those in remote and rural areas, we look forward to the possibility of expanding access and accelerating improvements while gaining efficiencies.”

“I know my friends at Mission think I’m against this,” Taylor says. “I’m really not against it; I just want to be sure it’s done right. And as soon as this is approved, I will certainly want to support everything we can do to make sure it’s successful.”

“I just think it’s healthy for the public to have a discussion about these issues,” issues that include assurances for access to care in his community, Taylor says.

Attorney General Stein has assured Taylor and his neighbors that he has their best interests in mind. Before approving the deal, Stein told the Asheville Citizen-Times, “I want to clarify and strengthen HCA’s commitment in terms of its delivery of medical services and…keeping the rural hospitals open.”

The Pressures

Taylor’s concerns over access aren’t unfounded. These are tenuous times for health care services in rural America. In September, the U.S. Government Accountability Office reported that between 2013 and 2017, 64 rural hospitals closed, more than double the rate of the previous five years.

Making it as an independent is increasingly difficult. Researchers at the North Carolina Rural Health Research and Policy Analysis Center write that rural hospitals face Medicare reimbursement cuts if they’re unable to meet quality and technological standards, but often don’t have the capital to make the necessary improvements.

The researchers also point out that patients at small, rural hospitals tend to be relatively older, poorer and sicker, with a higher percentage covered by Medicare or Medicaid or who have no insurance at all.

Merging with a larger hospital or system is often the only alternative to closure.

Further, a recent study from the Colorado School of Public Health found that hospitals in states that haven’t expanded Medicaid, as allowed for under the Affordable Care Act, are six times more likely to close than those in states that have. The North Carolina Legislature has thus far elected not to expand Medicaid.

One more source of concern for Western North Carolina’s rural residents: The Government Accountability Office found that while only 11 percent of rural hospitals in the country are owned by for-profits, 36 percent of those that closed in that five-year period were for-profit owned.

HCA is a for-profit corporation.

The Potential

Rowena Buffett Timms, Mission’s senior vice president for government and community relations, is sensitive to these concerns, but says she firmly believes that HCA has no desire to come into the region and close rural hospitals. HCA, she says, is “very excited about this hub-and-spoke of a very healthy health system in Western North Carolina.”

Historically, HCA is “used to going in and buying hospitals that are very close to being closed.”

“This is a new business model for them,” Timms says. “To come in and dismantle would not really be supportive of what I believe they are trying to achieve in this very exciting new business model.”

HCA, she says, sees “the work that we do in quality, the outcomes, how we drive those concepts into rural communities…They see that potential.”

Taylor and others feel that Mission has a responsibility for how that potential unfolds.

Jay Nixon, a former governor and attorney general of Missouri, has been brought in as a consultant by citizen groups. Nixon previously challenged HCA in the courts, claiming the corporation did not live up to the terms of its contractual agreement to make capital improvements at hospitals the company purchased in the Kansas City area. Last year, the state won that lawsuit.  

“Mission is a nonprofit, and has built up a significant value, obviously, as laid out by the transaction that’s on the table now,” Nixon says. It has “an ongoing responsibility for health care in that region.”

That responsibility, he says, “has been vested in them through their nonprofit status with the state.”

“I just think these hospitals are extremely important in these smaller communities,” Nixon attests. “They are not only an employer, they are also an asset that makes it easier to attract and keep businesses and families. So, I get very concerned about transactions of this nature where you don’t have long-term ironclad guarantees that the facilities and services will remain open.”

The AG’s Concerns

Attorney General Stein has expressed three fundamental concerns with the agreement as it stands: Are there sufficient provisions to ensure the continuation of certain services, is the $1.5 billion price tag enough and will the board tasked with managing the money represent the diversity of the region?

“The people of Western North Carolina have been investing in these hospitals for decades and they should benefit from all the value that has been accrued over time,” Stein said.

Highlands Mayor Patrick Taylor traveled to Raleigh to meet with Stein’s office, and he’s confident that his neighbors’ concerns are being heard. One provision in particular that Taylor would like to see included in the final agreement is that if HCA should decide to close a hospital, the attorney general’s office must be informed, must be given a justification and would have oversight to review why HCA believes it’s necessary.

The town of Highlands passed a resolution in September asking that the agreement stipulate that if HCA should undertake to sell Highlands-Cashiers Hospital, the community would be given notice and a local entity would be offered the first opportunity to buy it back. Taylor and his colleagues recognize that they wouldn’t be able to make a go of it as an independent. They’d have to then find another partner.

“But if we don’t have that option,” he says, “we have a real clear danger of not having any health care access here after all that money and everything has been put into it.”

Taylor’s best-case scenario is that HCA “would come in and invest in services and be creative in remaking the hospital.” He notes that HCA has hospitals in Florida where they could provide reciprocal services for many of Highland’s seasonal residents.

That full-page ad in the Highlands Newspaper states that HCA plans to “invest region-wide to meet the future health needs of western North Carolina. Our promise: the best healthcare for your family – sooner and closer to home.”

Taylor hopes very much that this ideal scenario is realized, “and I hope that people will look at this old mayor…they’ll look at him and say, ‘What was he worried about? This turned out great.’

“I hope that’s the case.”

This is the first story  in a two-part series about the sale of North Carolina’s Mission Health to the national HCA Healthcare. Read the second part of the series here.

Rural Health Care

Federal Efforts to Help Rural Hospitals Could Hurt Urban Ones, Opponents Say



In this Thursday, July 30, 2015, photo, a sign stating "Save Our Hospital" sits outside of Wedowee Hospital in Wedowee, Ala. Eight rural hospitals have closed in Alabama over the last 15 years and more closures are possible as rural hospitals struggle to stay open. Voters in Randolph County will go to the polls Tuesday on a proposed one percent sales tax to try to keep the doors of the hospital open. (AP Photo/Brynn Anderson)

A Trump administration proposal calls for increasing Medicare reimbursements for some rural hospitals by taking money from hospitals in major urban areas. Both opponents and proponents of the measure say the entire Medicare reimbursement system needs an overhaul.

While proposed changes to Medicare reimbursements to hospitals may keep some rural hospitals from closing, industry executives say the entire system of reimbursement needs to be reformulated.

A proposal by the Trump administration would raise reimbursement rates for some rural hospitals by taking the money from reimbursements to the richest hospitals. Advocates for rural hospitals say it is a way to save those hospitals from closing. But hospital advocates in urban areas say their hospitals shouldn’t be penalized to help those in poorer communities. Still, others say the way reimbursements are determined is flawed.

For some rural hospitals, the proposal could be a game-changer. But about half of all rural hospitals won’t be affected by the changes.

Currently, Medicare reimbursement for hospitals is determined by the U.S. Center for Medicare and Medicaid Services (CMS) using the “area wage index,” which adjusts a hospital’s reimbursement rate based on how much the hospital pays its staff. Hospitals report their wages to the CMS, where they are compared to wages in their respective labor markets. The index is intended to create an annually updated measure that shows how hospital wages compare across regions.

Under this method, hospitals located where wages are lower than the national average receive lower reimbursement rates than those in areas where wages are higher than the national average. Research from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill found that the median wage index for urban hospitals is substantially higher than the median wage index for rural hospitals, regardless of the hospital’s size.

According to the CMS, the system perpetuates an already existing inequity.

“High wage index hospitals, by virtue of higher Medicare payments, can afford to pay their staff more, allowing the hospitals to continue operating as high wage index hospitals,” CMS said in a statement. “Conversely, low wage index hospitals often cannot afford to pay wages that would allow them to climb to a higher wage index. Over time, this creates a downward spiral that increases the disparity in payments between high wage index hospitals and low wage index hospitals, and payment for rural hospitals and other low wage index hospitals declines.”

Source: National Rural Health Association | @NRHA_Advocacy

Proposed Changes

To address this, in April CMS Director Seema Verma proposed changing the system to increase reimbursements for hospitals near the bottom of the area wage index and to reduce reimbursements for those near the top of the wage index. (Under the proposal, hospitals in the bottom 25 percent of the wage index would increase by half the difference between their wage index value and the national 25th percentile wage index value. Hospitals in the top 25 percent of the wage index would receive lower reimbursements, which would keep the changes from raising the overall cost of the program.)

Verma called the policy a rethinking of rural healthcare.

“One in five Americans are living in rural areas and the hospitals that serve them are the backbone of our nation’s healthcare system,” Verma said. “Rural Americans face many obstacles as the result of our fragmented healthcare system, including living in communities with disproportionately higher poverty rates, more chronic conditions and more uninsured or underinsured individuals.”

The difference could mean thousands of dollars per patient for rural hospitals.

For example, under the current reimbursement system, a hospital in a rural community might receive a payment of $4,000 for treating a patient for pneumonia, according to CMS. But at a hospital in an urban community with a higher wage index, the same treatment might be reimbursed at a rate of $6,000.

Still, those payments are well below what hospitals must spend to treat patients. According to a study by the AHA in 2015, Medicare and Medicare reimbursements to hospitals were $57.8 billion less than what it costs the hospitals to provide services.

The study found that Medicare reimbursements amounted to an estimated 88 cents for every dollar spent by the hospitals.

“Payment rates for Medicare and Medicaid, with the exception of managed care plans, are set by law rather than through a negotiation process, as with private insurers,” the study found. “These payment rates are currently set below the costs of providing care, resulting in underpayment.”

Something Is Better Than Nothing for Many

For some hospitals, the money they get from Medicare may be pennies on the dollar but may still generate substantial revenue for the healthcare organization. And the consequences of not having that federal funding can be dire.

The Pineville Community Hospital Association (PCHA) in Pineville, Kentucky, filed for bankruptcy in November 2018. As part of that filing, Jon Gay, with Lexington-based law firm Walther, Gay & Mack, an attorney for the bankruptcy trustee, said an estimated 90 percent of the hospital’s patients were Medicare or Medicaid recipients. In June 2019, according to bankruptcy records, a deal was reached to have personal property, certificates of needs and other licenses transferred to a non-profit organization, Pineville Community Health Center (PCHC), which took over hospital operations.

The city of Pineville stepped in to help the hospital, loaning PCHC $300,000 to ensure the hospital stays open. For residents in the Pineville area, the closure would mean traveling to the next nearest hospital more than 15 miles away.

Prior to that June agreement, however, CMS had terminated its agreements with PCHA after an investigation found several lapses in patient care, meaning no payments would be made for any future Medicare or Medicaid patients to the hospital. While PCHC is working with CMS to obtain a new provider agreement, the loss of federal revenue to the hospital forced the facility to lay off half of its staff — an estimated 60 people.

“Without Medicare (and) Medicaid, we can’t operate because 75 percent of our revenue is generated through Medicare and Medicaid,” Pineville Mayor Scott Madon told WYMT TV in a June 3 interview.

Pineville, the county seat of Bell County, had a population of 1,732 in the 2010 census. Bell County’s unemployment rate has remained relatively stable, sitting at 5.8 percent as of February 2019. But, according to numbers from the Kentucky Center for Statistics within the Kentucky Department of Education and Workforce, the county’s total workforce in February was 8,448 people. A difference of just 60 unemployed residents would raise the county’s unemployment rate to 6.5 percent. As one of the largest employers in the county, if the hospital were to close, creating the loss of another 60 jobs, the county’s unemployment rate would jump to 7.2 percent, one of the top 10 highest unemployment rates in the state.

Craig Becker, president and CEO of the Tennessee Hospital Association, said the changes to the Medicare reimbursement rates could reshape his state’s healthcare system.

The proposed changes would allow Tennessee hospitals, especially those in East and rural Tennessee, to keep healthcare professionals on staff, as well as help hospitals continue to provide services to their communities, he said.

“Because of the broken Medicare formula, hospitals in Tennessee have lost more than $300 million in Medicare reimbursement in the last 10 years. That money could have been applied to technology, higher wages, recruitment efforts, purchasing of medical equipment and updating many of our aging facilities,” he said in an editorial in the Tennessean.

The issue is particularly important for those in rural Tennessee, he said, where 10 rural hospitals have closed in recent years. Becker said one reason for their closures, among the many, was the area wage index and declining reimbursements.

A Flawed System

Nationally, however, many feel that taking from urban hospitals to give to rural hospitals isn’t an answer to the funding crisis. American Hospital Association Executive Vice President Tom Nickels said another solution needs to be found.

“The area wage index is intended to recognize differences in resource use across types and location of hospitals. Hospitals, Congress and Medicare officials have repeatedly expressed concern that the wage index is flawed in many respects,” Nickels said in an emailed statement. “The AHA appreciates CMS’s recognition of the wage index’s shortcomings. At the same time, improving wage index values for some hospitals – while much needed – by cutting payments to other hospitals, particularly when Medicare already pays far less than the cost of care, is problematic. CMS has the ability to provide needed relief to low-wage areas without penalizing high-wage areas.”

In fact, a study by the U.S. Office of Inspector General entitled “Significant Vulnerabilities Exist in the Hospital Wage Index System for Medicare Payments” found that the Medicare reimbursement system is flawed. CMS lacks the ability to penalize hospitals that submit inaccurate or incomplete wage data and has little oversight to ensure hospitals submit accurate data, the report said.

The Inspector General’s report found that these vulnerabilities might prevent the CMS from accurately determining local wages, which would, in turn, affect Medicare payments to hospitals.

But that doesn’t begin to cover how flawed the system is, said Alan Morgan, CEO for the National Rural Hospital Association in Washington, D. C.

The proposed changes won’t address the needs of nearly half the rural hospitals in the country, those considered critical access hospitals, he said. Critical access hospitals, generally speaking, are those with fewer than 25 inpatient beds in rural areas. For those 1,300 rural hospitals, which are not dependent upon the wage index, the administration’s proposal would have no effect.

“Is this (proposal) a good thing? Yes,” Morgan said. “Is this going to address some payment inequities? Yes. Is this going to solve all the problems faced by rural hospitals? No. It’s a good provision. It’s a targeted provision. But it won’t help almost half of the rural hospitals in our country.”

This article was originally published by the Daily Yonder.

Continue Reading

Rural Health Care

N.C. Attorney General Approves Sale of Rural Hospital System, But with Added Protections



North Carolina Attorney General Josh Stein in Asheville last Wednesday posing with members of the Health Equity Coalition after announcing his approval of the sale of Mission Health to HCA. Photo: Deborah Miles

Citizens were concerned. They voiced those concerns. And it appears their voices were heard.

When it was announced in August that Nashville-based HCA Healthcare had reached a deal to purchase Mission Health, many residents of Western North Carolina – most particularly those in the region’s rural communities – had trepidations about ceding control of their health care future to an outside operation.

Mission Health is based in Asheville, a city of 90,000 and the economic hub of otherwise largely rural Western North Carolina. It’s a not-for-profit health care system – the only one managed in the region – covering 18 counties. In addition to its flagship medical center, Mission Hospital in Asheville, Mission owns five smaller hospitals in the surrounding rural counties. 

HCA is a for-profit system that owns 178 hospitals in 20 states. The asset purchase agreement stipulated that a newly formed foundation called the Dogwood Health Trust would manage the proceeds of the sale, with an objective to use social determinants of health to improve the health and well-being of the communities Mission Health now serves.

The $1.5 billion deal was contingent on the approval of North Carolina Attorney General Josh Stein. Stein deliberated for some five months, and last week announced that he was granting that approval, but with the addition of significant provisions to preserve the delivery of health care services throughout the whole of the region – provisions that were agreed to by HCA and Mission Health.

“It really feels like we all pulled together to do some good things for the people of Western North Carolina,” said Risa Larsen, one of many of the region’s residents who advocated for more protections. “We’re overwhelmed with the fact that what’s in the new agreement way exceeded our expectations.”

Heightened Oversight

In the original draft of the agreement between HCA and Mission, HCA committed to providing services at the smaller regional hospitals for five years. That commitment has now been extended to 10 years.

The revision also provides more explicit language on exactly what services must be provided.

Further, HCA is prohibited from closing any facilities or discontinuing services unless agreed upon by both a hospital’s local advisory board and an independent monitor. That monitor will also regularly review whether HCA is maintaining its overall commitments.

Jay Nixon, the former governor and attorney general of Missouri who was brought in by citizen advocates as an advocacy consultant while the attorney general deliberated over the proposed sale, said the addition of this independent oversight is a significant development. Advocates feared that a local advisory board would alone be insufficient protection, given that half of its members would be appointed by HCA, the other half by Mission.

Nixon, who, as Missouri’s attorney general, challenged HCA in the courts, is also encouraged by the enforcement powers the agreement vests in the attorney general’s office, and in measures added to maintain transparency.

According to the agreement letter, Dogwood Trust will hold public meetings “to discuss the needs of the region and to obtain input on the priorities for addressing the social determinants of health” in Western North Carolina.

Dogwood will hold an open meeting with the public each year and will provide an annual report detailing how it’s using its funds

“General Stein and his staff stepped up to the challenge,” Nixon said, “and I believe the citizens of the region were a very positive, direct force in assisting him and his team in dramatically improving this agreement and raising the clear opportunities that the region will have for decades to come.”

Committing to Diversity

Equally important to advocates was regional, ethnic and gender diversity on the proposed 15-member Dogwood Health Trust board.

Dogwood has committed to having no more than five members from any one county by Jan. 1 of next year and no more than four members from any county by 2021. This is good news for those who feared the board would be Asheville-centric, removed from the concerns of its rural neighbors. The Dogwood board must include at least one member from each of the five regions with a hospital by Jan. 1 of next year.

And in a commitment letter to Stein’s office, Dogwood chair Janice Brumit wrote that the foundation would take into consideration ethnic and gender diversity as part of the its “commitment to be fully and fairly representative of western North Carolina.”

The revised agreement gives the local foundations that oversee the individual hospitals more flexibility in pursuing their own health care initiatives. And the local foundations and Dogwood Health Trust will have the right to bid on hospitals if they’re put on the market or closed.

The deal also stipulates that Dogwood will commit $25 million over five years to addressing opioid use disorder.

“Access to healthcare is truly a life or death issue,” Stein said in a press release announcing the agreement. “I am satisfied that this new agreement protects healthcare in western North Carolina, ensures that the full value of Mission’s assets will continue to be used for public purposes, and requires that the Dogwood Health Trust will be independent and representative.”

Due Diligence

Risa Larsen said the wait for Stein’s decision had been anxiety-inducing; the outcome, sweet.

“We really appreciate the hard work that the attorney general, his office, Mission, HCA and Dogwood Health Trust have done,” Larsen said. “I mean, good night, they’ve been working hard. The 10-year commitment on the rural hospitals, the more explicit language about the services, the independent monitoring – I never would have thought that would happen.”

“I’m delighted,” said Highlands Mayor Pat Taylor, who’s been at the forefront of the effort to secure more protections.

Asked if he saw any holes in the agreement, Taylor said, “Not anything that can’t be addressed and worked out. This is a complicated process, so I know there are going to be some problems and some holes. But I think we have a good foundation now to all work together to provide good health care for this region.”

“It’s important to take a deep breath,” Nixon said, and assess the task ahead. Western North Carolina will now have “a $1.5 billion foundation specifically to address health outcomes in the region while not taking away any of the hospitals or institutions.”

“But the public is going to have to stay involved,” he cautioned. “You saw in this situation, I believe, that an involved public – an informed citizenry that respectfully, in essence, petitioned their government – was a positive force for goodness here.”

“This is how it’s supposed to work. This is what democracy is supposed to look like,” Nixon avowed, praising Stein’s office for its openness and availability to all parties involved. “But I do think that folks are going to have to continue to stay vigilant.”

“Everybody played a part in moving this to a better place,” he concluded, “but everybody needs to continue to play a part in making sure it delivers the maximum of its capacity.”

Continue Reading

Rural Health Care

Rural North Carolinians Pushing for Assurances in Rural Hospital Sale



Blue Ridge Regional Hospital. Photo: Taylor Sisk/100 Days in Appalachia

This is the second story in a two-part series about the sale of  North Carolina’s Mission Health to the national HCA Healthcare.  Read the first part of the series here.

As North Carolina’s attorney general deliberates over whether to approve the sale of the nonprofit Mission Health System to for-profit Nashville, Tennessee-based HCA, a citizens group is asking that, if approved, the deal ensure they have a voice in the future of health care services in their rural communities. 

The Mission system covers 18 mostly rural Western North Carolina counties. Its flagship hospital is in the region’s largest city, Asheville (population 90,000). The system also owns five smaller hospitals in the surrounding rural region, which lies in the southern range of the Blue Ridge Mountains. 

One of those hospitals is Blue Ridge Regional in Spruce Pine, an hour’s drive northeast of Asheville. The town of 2,100 is located near the Blue Ridge Parkway, about 14 miles northeast of Mt. Mitchell, the highest peak in the Eastern United States. 

Susan Larson is a Spruce Pine resident and a member of Sustaining Essential and Rural Community Healthcare, or SEARCH, which was formed last year when labor and delivery services were discontinued at Blue Ridge. 

Like a number of her neighbors throughout the region, Larson is anxious about the future of rural health care services. The asset purchase agreement for the proposed Mission sale stipulates that a $1.5 billion foundation, the Dogwood Health Trust, will manage the proceeds and will use social determinants of health to improve the health and well-being of the communities the system serves. 

Larson is concerned that rural communities will be left out of the decision-making process.  

“All along, we have said that there are two things we want,” Larson said. “We want our hospitals to be protected, and we want the Dogwood Health Trust to be constituted properly, so that it can indeed serve all 18 counties.” 

SEARCH has brought in as a consultant Jay Nixon, former governor and attorney general of Missouri who, while attorney general, challenged HCA in the courts, charging that the corporation had failed to live up to all of its responsibilities. A $160 million settlement was reached.  

Nixon’s role is to help advocate for an independent health trust that is “governed now and in the future by a board and communities that will do what’s best for the region.”  

“Mission is a nonprofit and has built up a significant value, obviously, as laid out by the transaction that’s on the table now,” Nixon said.  

Tax law requires the value of a nonprofit’s assets to remain perpetually nonprofit. When a for-profit health care company buys a nonprofit system, one way to keep the proceeds in the nonprofit realm is to create a health care foundation that supports nonprofit work. That’s the plan for the proceeds from the sale of Mission’s assets.  

Having reaped the benefits of a nonprofit, Nixon said, Mission has a responsibility to taxpayers. “It’s the community’s money. It’s the state who provided the nonprofit benefits.”  

Selecting the Best 

“People in this community have a very long history of feeling that the hospital is ours,” said Jean Hunt, a resident of Yancy County, which is served by Blue Ridge Regional. “We do not consider that hospital Mission’s. We consider it to be ours.” Blue Ridge opened in 1955 with significant help from a community fund drive. 

“My biggest concern is that the foundation isn’t independent,” Hunt said. 

Thus far, nine members of what is proposed to be a 12-to-15-member Dogwood Health Trust board have been appointed. The majority live in Asheville and eight of the nine have current or previous affiliations with Mission. 

A map showing where the proposed Dogwood Health Trust board members live compared to Mission Health hospitals. Photo: Taylor Sisk/100 Days in Appalchia

The health trust “very easily could be the largest per-capita in the country,” said Rowena Buffett Timms, Mission’s senior vice president for government and community relations.  “What you want are the very best that you have to offer in your community to begin setting that up.”   

Timms has heard the concerns: “People went, ‘Wait a minute, you’ve picked all these people who are or have been on the Mission Health board over the years.’ Absolutely.” Those selected, she said, “have deep pedigree, knowledge of health care, have been intimate with Western North Carolina over the years.” 

Hunt agrees that such experience is important: “Obviously, we need people on board with specific skill sets.” She believes those individuals can be found in the rural communities.  

As regards Susan Larson’s concern that HCA might close one or more of the regional hospitals, the purchase agreement stipulates that no services will be discontinued for five years and emergency services must be maintained for 10 – unless a hospital’s advisory board approves the discontinuance of a service or the sale or closure of a hospital.  

The advisory board at each hospital would have eight members: four appointed by Mission, four by HCA. 

Three-Comma World 

“I get very concerned about transactions of this nature where you don’t have long-term ironclad guarantees that the facilities and services will remain open,” Nixon said.  

“The trust, if it could be what they say it’s going to be, could be incredible,” said SEARCH member Risa Larsen. “I love the sound of that trust.” 

Nixon too is big on the potential. 

“You have the opportunity to keep this system as it exists now, which obviously is functioning and is gaining in value,” he said. “It’s a vibrant hospital system.” 

He envisions the enormous potential of maintaining “all the physical assets and the human capital assets,” then introducing a $1.5 billion-plus foundation. “You really do have great opportunities.” 

This transaction, Nixon stressed, is “in three-comma world … a billion dollars. There’s a whole lot of good that can be done if it’s done in a transparent fashion, if it’s done with very solid conflict-of-interest and ethics rules around it and a long-term pipeline of local citizens who understand the particular problems and challenges of the region.” 

This story was originally published by the Daily Yonder.

Continue Reading


100 Days