At a special called meeting Friday night, April 1, a five-member quorum of the Authority Board considered a resolution that alleges the Fort Oglethorpe hospital has breached at least 20 provisions of the lease.
Steve Ellis, trustee representing Walker County, read aloud the resolution, which says the Authority Board has the right to terminate the lease immediately if the hospital breaches any of the provisions.
But as the board “recognizes its civic duty to ensure that there is continued access to affordable health care in the community,” it recommended that the hospital be given 90 days to earnestly demonstrate remedies for the alleged breaches.
The lease was agreed upon 16 years ago when the Authority Board, which owns the Hutcheson facilities and the dozens of acres of land on which they sit, created the non-profit companies of Hutcheson Medical Center Inc. and its parent company, Hutcheson Health Enterprises Inc.
HMC Inc. was assigned the task of day-to-day operations of the facility, formerly known as Tri-County Hospital, which was established in 1953.
The essence of the lease requires that, in exchange for the facilities, Hutcheson Medical Center must provide health care to the community regardless of a patient’s ability to pay.
The hospital continues to provide millions of dollars of indigent medical care annually.
Don Oliver, attorney for the Authority Board, said many breaches of the lease concern the financial aspects of the hospital, such as failure to comply with debt covenants and to maintain the minimum 45 days operating cash.
He said most everything in the lease provides for the 90-day “cure” period, and that approval of the resolution now is needed to expedite the matter toward completion as soon after an anticipated partnership agreement is reached.
“I am not intending in any way for this to interfere with the process with Erlanger (Health System),” he said.
Prior to Friday’s meeting Oliver issued an open letter to the trustees, giving background on the powers of the Authority Board and describing his view of the situation.
“HMC (Inc.) is nothing more than a paper entity created by this Authority to do a job,” the letter reads.
Oliver said that creation, like a terminator robot from a modern horror movie, has gone rogue. “The robot and its own servants, the administration it has hired and the attorneys it has hired, now tell the Authority what it can and cannot do; who it can hire; who it can pay; who it can do business with; how it will conduct its business.”
The Board is at a crossroads, Oliver said, and “will either facilitate and enhance this disaster which began 15 years ago, or return our hospital and the Authority to resemble the creature of the noble intentions of 60 years ago when it was created.”
Although a quorum was present and therefore could have voted to approve the resolution, four trustees were not at the meeting, including chairman Dr. Darrell Weldon and the two trustees who represent Dade County.
Authority Board vice chairman Bill Cohen, who represents Catoosa County, presided over the meeting, but as such could only vote to break a tie.
Catoosa County trustee Ken Rhudy was connected to the meeting via telephone, so he was not eligible to vote.
Rhudy said the momentum gained by the Authority Board in these recent tense months of partnership negotiations has “fallen by the wayside.”
“The bond of trust has been broken,” he said, and urged the postponement of action until a better representation of trustees could be present.
Dade County executive Ted Rumley agreed, and said that although he is not a member of the Board, he is favorable to many of the provisions in the resolution, particularly one calling for an “efficient and single board to operate the hospital.”
“But you’ve pretty much only got Walker County voting here, and in fairness I think you should have a full board,” Rumley said.
Walker County commissioner Bebe Heiskell was also in attendance. Catoosa County commission chairman Keith Green was not.
Cohen said he spoke earlier with Greene, who indicated he would appreciate the Authority Board not taking any action that would imperil the Erlanger negotiations.
In light of this, the members present voted to table the resolution and set a meeting for Wednesday, April 6 at 6 p.m.
There is a joint meeting of the four Hutcheson operating boards scheduled for Sunday, April 3.
In other Authority Board business at Friday’s meeting:
· The Board approved a resolution to ratify all professional relationships made by legal counsel Don Oliver during the process of negotiation with Erlanger Health Systems, and authorized to contract for further needs as necessary “in a reasonable and timely manner.” Former Georgia Gov. Roy Barnes and Michelle Madison were officially named as legal counsel, while Edmund Wall was reconfirmed as financial advisor.
· Representatives from Health Management Associates (HMA) of Naples, Fla. attended the meeting, and senior vice president Alan Levine gave a brief presentation regarding Hutcheson’s options for a partnership. Levine urged the Board to not “make a decision with a gun to your head.” Don Oliver indicated that after sending out requests for information on partnership options, HMA was among six companies/hospitals, including Parkridge and Memorial in Chattanooga, that expressed interest. Some returned a questionnaire that Oliver had provided while others, due to the short notice, responded verbally.
· In closed executive session, the Board reviewed its Erlanger proposal counter-offer, as “redlined” by its legal counsel. Michelle Madison was present to advise the review.