Opinion: Is there anything we can do about Mission and HCA?

by Peter Lewis, avlwatchdog.org

So, what can we do?

That’s the question we at Asheville Watchdog hear most often about the apparent decline of the once-proud Mission Health System, the result of nearly five years of profit-oriented management by the giant Hospital Corporation of America, or HCA.

Every day in the Mission Emergency Room is scary like Halloween, doctors and patients tell us. Patients are parked in hallways for hours without food, water or attention. Drug addicts puke in the waiting rooms.

For every story we hear about all the excellent doctors and caring nurses who remain at Mission, we also hear about the neglect, trash and micromanagement that drives beloved long-time caregivers to walk away.

People tell The Watchdog that they’re now afraid to go to Mission when they get sick or need surgery. Simply referring their patients to Mission, one doctor tells us, makes them feel that they’re violating the Hippocratic Oath to Do No Harm. Nurses tell us that HCA’s profit-focused management model regularly puts patients at serious risk.

Prices for healthcare are up. Quality of care is down (although HCA-Mission disputes this). This is the exact opposite of what we were told would happen five years ago when Mission’s leadership announced plans to sell out to America’s biggest for-profit hospital chain.

“They’re not going to be more efficient at the cost of quality,” Mission board member Tom Oreck said after voting for the sale. “The quality of care is going to improve at the same time that they’re able to find ways to lower the cost of operation.”

Okay, that was then. Now, our neighbors are asking us if ambulances really have to take you to Mission. (Answer: Yes, depending on where you live.) Some doctors confess, off the record, that when they or their family members need consequential health care, they consider going elsewhere. They praise the skill and dedication of the doctors and nurses at Mission, but say the system is broken.

Does anyone think this is acceptable?

We deserve better. We deserve the kind of healthcare Mission used to provide, before HCA, when the hospital was considered one of the top health systems in the United States, a magnet for some of the finest physicians in the country, and a source of community pride.

But how do we change things? Is there anything we can do?

The Watchdog has documented the troubling details surrounding the sale in 2019: The secrecy, the backroom deals, the “rigged” bidding process, the exodus of long-time physicians and nurses. We’ve told often-heartbreaking stories about the degradation since HCA took over, from patients, family members, doctors, nurses, and other caregivers throughout our community.

Contrary to the promises made at the time, the sale of Mission to HCA turned out not to be in the best interests of the citizens of Western North Carolina — despite the creation of the nonprofit Dogwood Health Trust from the proceeds of the sale.

Dogwood pours millions of dollars a year into Western North Carolina to address the social determinants of health — poverty, racism, hunger, education, housing and the like.

But Dogwood is prohibited by charter from competing with HCA. It can’t do what the former Mission Hospital did so well: treat, comfort and provide compassionate care for people who are sick or injured or ailing.

Do the benefits of Dogwood offset the detriments of HCA? It’s hard to say they do.

“Kind of Hopeless”

Again: What can we do?

We’ve spoken to health care policy experts, government officials, hospital administrators, the attorney general and the independent monitor responsible for overseeing HCA compliance with terms of the deal. The answer comes back:

Not much. Sorry. It is what it is. Done deal. You can’t unscramble the egg.

“It’s kind of hopeless,” one healthcare policy expert told me last week.

Even if that’s true, the answer is unacceptable. So let’s think this through:

First, there’s no evidence that HCA itself misled the Mission board about anything, which might have been grounds for reversal.

Reputable financial experts concluded that $1.5 billion was a fair price — not the best price possible, given the astonishing lack of competitive bidding, but fair. Again, no do-over.

But the deal approved by the Mission board was so lopsided in favor of HCA, according to Attorney General Josh Stein, that he demanded 15 conditions be added to the purchase agreement. The stipulations were an attempt to preserve the value of the community’s long investment in the nonprofit hospital it created and sustained — and to protect the public from HCA’s pursuit of profits through elimination of unprofitable services.

The absence of “quality of care” requirements in the Asset Purchase Agreement and in the added conditions turned out to be a crucial omission.

Citing “serious issues and concerns” with Mission’s deal with HCA, Stein even demanded that the Mission board vote again. But once again, even knowing Stein’s concerns, the board voted unanimously to sell to HCA.

Was the Mission board bamboozled? Was it sold down the river by its own executives? Did it consider a partnership instead of a sale, to keep local control? Why didn’t the Mission board issue a Request For Proposals, opening the process to more qualified potential buyers besides HCA?

We might never know. Mission required everyone involved in the deal to sign nondisclosure agreements that are, according to Mission’s lawyers, effective “in perpetuity.”

That means there are aspects to the deal that some people want to keep secret, forever. Even from the community that started and supported the hospital for more than a century.

If it turns out that there’s a hidden key to reopen the deal, the former Mission board members and hospital executives haven’t told us where it is.

What Are the Options?

Can anyone or any entity force HCA to sell Mission — either back to Dogwood Health Trust or to another health care system like Novant or Duke?

Force? Highly unlikely. HCA is a Fortune 100 company with a battle-hardened internal legal department that’s probably larger than the North Carolina Department of Justice.

Persuade? Maybe. All it takes is money. If the offer were big enough, HCA executives would have a fiduciary responsibility to consider it.

But someone would have to make HCA an offer so extravagant that it would more than offset the dollars HCA sucks out of the region to send to its investors elsewhere. Why would HCA give up a virtual monopoly that has made Asheville’s Mission Hospital the No. 2 generator of net patient revenue in the entire 183-hospital HCA chain?

Watchdog investigative reporter Andrew R. Jones asked an HCA-Mission spokeswoman this month, “Can anyone or any entity change the HCA Healthcare / Mission Health asset purchase agreement at this point? Can the APA be changed at any point over the next six years (the remainder of the agreement) to be more specific in scope, as some community members seem to want?”

“No, we will continue to meet our mutually agreed upon commitments,” HCA Healthcare North Carolina Division public and media relations director Nancy Lindell responded. “HCA Healthcare has gone above and beyond our commitments to deliver exceptional care to the communities we are proud to serve.”

Jones posed the same question last week to the North Carolina Department of Justice, which issued a “letter of non-objection” to allow the deal to proceed in 2019.

The answer from Nazneen Ahmed of the Attorney General’s Office was:

“Section 13.14 (p. 145) of the attached [Asset Purchase Agreement] outlines how the APA might be amended, but the agreement is between HCA and Dogwood Health Trust, so they would be the responsible parties. Our office only has authority to reject a specific proposed change if the change was to one of the sections identified in Section 13.14(b).”

In other words, the Dogwood Health Trust — the successor foundation formed with the money from the Mission sale — and HCA both would have to agree to add amendments to hold HCA accountable for quality of health standards.

Since HCA contends that Mission is already providing “exceptional” quality of care, there appear to be only two chances of HCA agreeing to such amendments: slim, and fat.

What is Dogwood’s Role?

Asked if Dogwood Health Trust has considered pressing HCA to address the quality-of-care concerns of the people of the region, Dr. Susan Mims, Dogwood’s chief executive, referred to the series of public meetings being held by Gibbins Advisors, the independent monitor Dogwood hired to monitor HCA’s compliance with terms of the sale.

“Dogwood shares the community’s desire for everyone in Western North Carolina to have access to high quality healthcare,” Mims said in a statement to Asheville Watchdog. “We appreciate community members taking time to be present and share their concerns at these meetings and we encourage them to continue to do so. Unfortunately, we do not have the ability to unilaterally amend the contract to include quality of care.”

“What we can do,” Mims continued, “is continue to encourage dialogue about concerns and to enforce the APA as currently written. While some of the issues raised are concerns that the Independent Monitor is currently investigating, some stories and personal experiences shared in recent meetings offer new information. Where they pertain to the commitments outlined in the APA, we are encouraging the Independent Monitor to look into these areas of potential noncompliance.”

Mims’s statement concluded: “For issues pertaining to quality of care, we ask people to continue to share their stories with the Independent Monitor and with the governing bodies like NC DHHS Division of Health Service Regulation, the Joint Commission and CMS who can address issues that fall outside the agreement but warrant further investigation.”

Gibbins has held meetings this month for Transylvania Regional Hospital in Brevard and for Mission Hospital in Asheville. At the Oct. 19 Mission meeting in Asheville, fifty local physicians, including a former Mission chief of staff, signed a letter condemning HCA’s profit-driven management of Mission, saying it had “gutted the heart and soul of our community healthcare system.”

The third and fourth Gibbins meetings are Nov. 1 in Franklin, to discuss Angel Medical Center, and Nov. 2 in Cashiers, to discuss Highlands-Cashiers Hospital.

Meetings for Mission Hospital McDowell and Blue Ridge Regional Hospital will be held next year.

Could Dogwood offer to buy Mission back from HCA?

The Asset Purchase Agreement gives Dogwood the right of first refusal in the event that HCA eventually offers Mission Health for sale. But HCA is not offering.

The total assets from the sale were slightly less than $1.5 billion. That was several years ago. Dogwood’s assets are now over $2 billion.

But I’d guess that Dogwood isn’t keen to liquidate itself to buy Mission from HCA. That’s partly because Dogwood was created by the same people who voted to sell Mission to HCA in the first place.

And who knows how HCA would value Mission today, knowing the rich revenue stream it yields? $2 billion? $4 billion? More?

Could Dogwood pony up a big chunk of money to jumpstart a community effort to buy back Mission, part of a leveraged buyout?

Maybe, but who would step up to take on such a huge debt? And who would be willing to lend it?

And then there’s this issue: Who would run a newly independent Mission if a local coalition takes it over? Hospital management is nothing you’d want a group of amateurs to handle.

Okay, what about another hospital system, like, say, Novant? 

Remember, nonprofit Novant was the only company besides HCA invited to make a formal offer to the Mission board, and it was rejected — despite Novant’s pledge to match or beat any offer from HCA and to maintain staffing levels for three years.

Shortly after it was jilted by Mission, Novant paid $5.1 billion to buy a smaller and less profitable hospital in Wilmington. So it had the money, and it had the motivation. Does it still?

What about UNC Health? Duke? Atrium Health? AdventHealth? How about Ballad Health, based just across the border in Johnson City, Tenn.?

Of this group, Atrium — then known as Carolinas HealthCare System — was the only other healthcare company that the Mission board seriously considered. But Carolinas was rejected quickly and not even invited to make a presentation to the board, the records show.

One wonders if any of these, or any other healthcare systems nationwide, might be interested if HCA were to sell.

But be careful: In a recent MIT Sloan Management Review “Nursing Satisfaction Index” survey at 146 hospital systems nationwide, Ballad Health ranked dead last in workload and satisfaction. That was even worse than HCA, which ranked near the bottom, at 134.

Monopoly Money

What about asking the North Carolina Department of Health and Human Services to permit an alternative acute care hospital to be built in Asheville?

Don’t hold your breath.

In North Carolina, a state-approved Certificate of Need (CON) is required to open a new healthcare facility. “I don’t like the hospital I’ve already got” is not a compelling argument. A Certificate of Public Desire doesn’t exist.

And consider the bitter ongoing fight between HCA and AdventHealth over permission to build a new, freestanding emergency facility in West Asheville. Twice HCA has been approved to build the new emergency facility, and twice AdventHealth has appealed to block HCA.

Last year AdventHealth won state approval to build a new, 67-bed hospital in Enka/Candler. HCA-Mission filed a challenge to block AdventHealth, arguing instead that residents would be better served if HCA-Mission can add 67 beds to its Biltmore Avenue campus in Asheville.

Cynics might note that HCA can’t staff the beds it already has, suggesting that its desire to add more beds is as much an attempt to block competitors from entering the market as it is to relieve overcrowding in Mission’s emergency department.

And why wouldn’t HCA fight competition? In buying the Mission Health system in 2019, HCA acquired an unregulated monopoly for healthcare in Western North Carolina. In other words, it bought a license to make money.

From 1995 to 2015, the North Carolina state legislature allowed Mission to merge with other local hospitals, like St. Joseph’s in Asheville, under a Certificate of Public Advantage.

The idea was that the state would allow Mission to grow strong, as a monopoly, to serve otherwise underserved Western North Carolina, while shielding it from normal antitrust regulations. In return the state would oversee and supervise Mission to prevent abuses and to make sure it operated in the public interest.

Under then-CEO Ronald Paulus, in 2015 Mission successfully lobbied the legislature to rescind the COPA, creating a regulatory void that greatly increased Mission’s value, and its attractiveness to HCA.

Soon after the COPA was rescinded, Paulus and his longtime advisor, Philip Green, solicited proposals from HCA to either partner with Mission or buy it outright. That was before the full Mission board authorized Paulus to explore a possible sale.

When Mission handed itself to HCA, the result was exactly what the original COPA was intended to prevent: a monopoly that almost immediately raised prices and exerted pressure on doctors and insurance companies, with little obligation to operate for the public benefit. Instead, HCA’s prime obligation as a for-profit company is to put the interests of its shareholders first.

So, HCA has a sweet deal here. Why would it sell?

The Watchdog has found no evidence that HCA has done anything illegal. It’s merely taking advantage of the deal it was offered by Paulus and the Mission board of directors.

Paulus cashed out and went to work for HCA within days of the handover.

Does that make you mad? Join the club.

Protest? Boycott? Complain? Sue?

But once again, what can people do with their anger? Protest?

Sure. But HCA has been unpopular since it was shamed by the federal government with what was at the time the biggest-ever fine for Medicare fraud, $1.7 billion. The HCA CEO at the time, Rick Scott, is now a United States Senator from Florida. HCA has paid hundreds of millions more in fines and settlements since then.

If HCA shrugs off billion-dollar and multimillion-dollar fines, a protest by a few dozen people in a remote corner of North Carolina is background noise.

Will it do any good to complain to state and federal agencies that monitor hospital performance?

Maybe. The federal Centers for Medicare & Medicaid Services (CMS) and the independent Joint Commission on Accreditation of Healthcare Organizations (JCAHO) set standards for patient safety and quality of care, and both investigate complaints and concerns about healthcare organizations that might not be meeting those standards.

Losing CMS and/or JCAHO certification is the nightmare for any hospital. Besides the reputational damage, being stripped of CMS or JCAHO accreditation could lead to fines, penalties, lawsuits and loss of funding from government programs like Medicare and Medicaid.

That’s especially important in Western North Carolina, where people are older, poorer and sicker than other parts of the state.

The goal of the CMS and JCAHO standards is to make hospitals safer, not to force them out of business.

Boycott Mission?

Certainly, if you have the luxury of driving to Hendersonville to go to UNC Health Pardee or AdventHealth when you’re sick or need elective surgery. But let’s say your doctor suspects you are having a heart attack or stroke, where every minute counts. Mission is 15 minutes away. Pardee and Advent are 45 minutes away. Which will you choose?

A boycott by doctors is another matter. When doctors at Messino Cancer Centers said they would no longer send patients to Mission because of safety concerns, you can bet it got the attention of HCA leaders in Nashville.

Pressure from local government officials?

Mission did not consult the city of Asheville or Buncombe County before announcing the sale to HCA, and HCA has shrugged off public criticism from state senators, state representatives, the state treasurer, county commissioners, and various mayors.

“HCA has chosen to make its money by reducing charity care, eliminating medical and unit administrative staff to the detriment of patient care and safety and sacrificing entire physician groups . . . by demanding significant reductions in pay,” local officials wrote to Gibbins Advisors, the independent monitor hired by Dogwood, just one year after the sale. “That wasn’t the deal we were told about and it wasn’t the deal we made as a community.”

The letter was signed by State Sen. Terry Van Duyn and state Reps. John Ager, Susan Fisher and Brian Turner, as well as Buncombe County Commission Brownie Newman and Asheville Mayor Esther Manheimer.

Since then at least 15 Transylvania Regional Hospital doctors have quit and two prominent members of the hospital’s board of trustees resigned in protest, saying they feared for the hospital’s future under HCA management.

Brevard Mayor Maureen Copelof met with HCA CEO Sam Hazen asking if HCA would sell the hospital back to the community. Hazen said no.

Angry letters?

The attorney general has written a bunch already.

Could Stein void the asset purchase agreement if he finds that HCA violated any of the 15 stipulations he set as a condition of the sale?

Nope. To be clear, the independent monitor this month said that HCA remains in full compliance with all the conditions. And if the attorney general does eventually find that HCA is in violation of something, the remedy will be to enforce compliance, not to void the sale.

What about all those lawsuits against HCA and Mission, alleging anticompetitive and predatory behavior?

Plaintiffs have been lining up in court since HCA raised prices 10% across the board. Along with a class action filed by local citizens against HCA-Mission, the City of Asheville, Buncombe County, the City of Brevard and Madison County have sued HCA-Mission on antitrust grounds.

“The Asheville City Council and the Buncombe County Board of Commissioners felt it was necessary to take this step to bring an end to predatory practices that limit HCA Healthcare’s competition and clearly result in overpriced and limited choices in people’s healthcare,” Asheville Mayor Manheimer said last year.

If they win, can the court make HCA go away?

No. The lawsuits seek monetary damages from HCA and changes in its behavior. But a change of ownership is not on the table.

Hopeless? Maybe Not

There might not be a way to pry Mission out of HCA’s clutches, but that doesn’t mean things are “kind of hopeless,” as my healthcare policy expert told me.

If we band together as a community, we can pressure HCA to prove that quality of care is more important than profits.

One way to start is to ask the 22 members of the former Mission board of directors who supported this deal, along with the former Mission executives who pushed the sale, to come forward and go on the record:

Are you happy with the way the sale to HCA turned out?

If not, are you willing to demand publicly that HCA restore Mission to its former reputation as one of the country’s top healthcare systems?

Our community deserves better.

Here are the former Mission Health board members who served while the sale to HCA was being discussed and voted. I invite all of them to contact me. For secure (encrypted) email, use avlwatchdog@protonmail.com.

Mission directors during the time of sale:

• John Robert Ball, MD, JD (chairman) 
• Janice W. Brumit (past chair)
• Daniel A Casse, joined board 1/1/2018
• Suzanne S. DeFerie, joined board 1/1/2018
• Bridget A. Eckerd
• Kristy Elliott, joined board 1/1/2018
• Winston Leon Elliston, MD
• Paul “Chris” Christopher Flanders, MD
• John William Garrett, MD (vice-chairman)
• William S Hickman
• Lynn Kieffer
• Thomas A. Maher
• Robert M. Moore Jr., left board 12/31/17
• Thomas Allen Oreck
• Peggy (Margaret E.) O’Kane, left board 12/31/2017
• Anne Ponder
• Kenneth G  Racht
• Jeffrey “Jed” E. Rankin
• Robert C. Roberts, left board 12/31/2017
• Robby Russell
• Lavoy Spooner Jr., joined board 1/1/2018
• Wyatt S. Stevens

Senior leadership

• Ronald A. Paulus, President and CEO. (Paulus is now President and CEO of Maribel Health in Santa Monica, Calif.)
• Charles F. Ayscue, SVP and CFO, departed Jan 2018
• Ann Y. Young, General Counsel

I’ll let you know what I hear from them.

This column was updated to include a statement from Dogwood Health Trust’s chief executive officer, Dr. Susan Mims, and to correct a reference to Janice Brumit. Brumit, the founding chair of the Dogwood Health Trust, stepped down last year.

Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Peter H. Lewis is The Watchdog’s executive editor and a former senior writer and editor at The New York Times. Contact him at plewis@avlwatchdog.org.

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