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Hospital Authority officials invite Memorial Health board members to join in effort to find new hospital partner

Subheadline: 
Hospital Authority: Time to move forward

The Chatham County Hospital Authority on Tuesday evening unanimously voted to move forward in seeking a new financial partner for Memorial University Medical Center and invited hospital board members to join in a united effort.

Authority Chairman Don Waters said the authority was “ready and able to move ahead” in wake of the May 9 decision by Novant Health Inc. to end negotiations for a strategic partnership with the region’s safety net hospital.

He noted that after Novant’s action, “several other interested third-party partners” have expressed interest and that the authority was ready to work with Memorial’s board of directors to evaluate other potential partners.

In a resolution approved by the authority, members determined that appropriate officers or members of the authority will:

  • Work in conjunction with the Chatham County Commission to develop a request for qualifications form to find qualified accounting firms for an audit of the Memorial Health system.

  • Request of Memorial Health system all additional detail regarding any financial relationships between Memorial and Novant.

  • Request specific directions from the Georgia Attorney General regarding the obligations of the four authority members who also serve on the Memorial board.

  • Authorized Authority Chairman Don Waters to establish a committee of both authority and Memorial Health board members to explore future partners for Memorial and the delivery of care of the community.

  • Supported and promoted the application of the Georgia Open Records and Open Meetings acts, adding that “to the health system’s continuing compliance with … laws in furtherance of the public’s right to access information.”

Scott urges action

The authority’s special called meeting came in the wake of two letters from Chatham County Commission Chairman Al Scott in which he urged the authority to consider an “independent financial adviser” to determine the true state of Memorial University Medical Center as part of its search for a financial partner.

The same date, Scott sent a letter to Maggie Gill, president/CEO of Memorial Health, to fully disclose all documents or agreements involving their proposed affiliation with North Carolina-based health care provider Novant.

Specifically, he wants:

  • All documents, agreements, books and records relating to all aspects of the health systems and its affiliates’ relationships with Novant Health Inc. and any of its affiliates during the period of 2010 to 2014

  • Any document or agreement between Novant and Memorial dated January 2013

  • Projected 2016-2017 cash flow statements and/or all documents of projections or forecasts of available operating cash.

The letter directs that materials be made available for inspection at 2 p.m. June 20 at Memorial University Medical Center by Assistant County Manager Linda Cramer or her designee.

Scott’s request was based on a May 1, 2012, Intergovernmental Contract between the county and the Chatham County Hospital Authority and agreed to by Memorial Heath Inc.

He also cited the May 1, 2012, Covenant Agreement between the county and Memorial Health Inc.

Included in those items were documents requested of Harry Haslam Jr., chairman of the hospital board, in an Open Records Act request by the Savannah Morning News last month, a request rejected by attorneys for Memorial.

Scott, in a separate letter to Waters, said the authority should consider hiring an adviser to assist them in evaluating proposed financial partners for the parent corporation of Memorial University Medical Center.

“As part of this due diligence, the county would support through a (request for qualifications) process to engage an outside health care audit firm to review and determine the true financial condition of Memorial,” Scott said in a June  3 letter to authority chairman Don Waters.

He said an “honest accounting of Memorial’s financial condition and any existing agreements between Memorial and Novant” will be important in determining a “management agreement, merger, purchase or other participatory structure designed  to ensure that the future of the hospital remains financially sound so that it will effectively provide health care to the community,”

The letter was sent along with Scott’s request that the authority evaluate interests of third party health care providers in “any potential partnership or operating arrangement” with Memorial.

It followed what Scott called “Novant’s withdrawal and apparent lack of interest in addressing the authority’s concerns to ensure the needed safety net healthcare services.”

Novant discussions

Novant’s President-CEO Carl Armato pulled out of negotiations with Memorial on May 9 after five months of negotiations for a partnership agreement failed to reach a common accord.

Hospital authority members blamed the impasse on Novant’s refusal to agree in writing to guarantee key safety net provisions including Level 1 Trauma and Level 3 Neo-natal ICU care. Memorial officials said that the authority’s continued changes in the agreement doomed its success.

The deal would have had Novant infuse $295 million into Memorial over the first 10 years of the agreement and cover the bonds secured by Chatham County. Hospital Board Chairman Harry Haslam called the agreement a “make or break” deal for the hospital’s financial health.

Waters and authority treasurer Art Dana have expressed a desire to re-open discussions with Novant whenever Novant is ready, but no indications have surfaced of any action there.

Meanwhile, Nashville-based Hospital Corporation of America has expressed renewed interest in an arrangement with Memorial, one that Waters said the authority should seriously consider. 

Scott has said the county was not directly involved in the discussions, but relied on the authority’s members to handle the plans to determine the hospital’s future direction. But he also has said that since the county is the guarantor for $164 million in bond for the hospital it has an interest in ensuring that county taxpayers are protected.

“The county and the authority should have concerns given the publicized statements by some members of Memorial’s board indicating that Novant was a ‘make or break’ deal,” Scott said.

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