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Nearly six months after N.C. Attorney General Josh Stein called for the creation of an independent monitor as part of his approval of HCA Healthcare’s $1.5 billion purchase of the Mission Health system, the role may soon be filled.
The attorney general’s office is evaluating a candidate who had been proposed for the position and expects to make a decision within a few weeks, Department of Justice spokesperson Laura Brewer told Carolina Public Press last week.
On Feb. 1, HCA closed its purchase of Mission, an Asheville-based nonprofit organization serving urban and rural communities in the region by operating hospitals and medical offices.
A spate of public interest requirements that Stein had hammered out with HCA in exchange for his office’s signoff took effect Feb. 1. With them came community stakeholders’ heightened expectations that HCA would live up to those promises.
To ensure that HCA’s new North Carolina Division complies with a wide variety of “forward-looking promises,” the independent monitor was created to work with the new owner’s local advisory boards and Dogwood Health Trust, a nonprofit foundation established to receive the proceeds from the sale of Mission Health to HCA.
As the merger is completed, the remnants of Mission Health are operating as ANC Healthcare to help wind down Mission Health’s financials and deliver the remaining proceeds to the Dogwood Health Trust.
Dogwood is expected to be the largest such grant-making foundation in Western North Carolina and among the biggest in the state.
The new independent monitor, which could be either a firm or an individual, may have a full agenda immediately.
Since Feb. 1, the attorney general’s office has received about 15 comments and complaints about the HCA-Mission Health transition, Brewer told CPP. These included concerns about employee protections, HCA’s policies for providing care to individuals who have difficulty paying for services and the potential role of the independent monitor.
Selecting an independent monitor
Within a few weeks, the public will likely find out which individual or firm will undertake the new high-visibility, politically sensitive role of independent monitor.
“On May 29, ANC informed us that a committee comprising members of the ANC and Dogwood boards had selected a firm that it was prepared to recommend to the ANC board of directors and to Dogwood as the independent monitor,” Brewer wrote last week, in response to an inquiry from CPP.
“We are in the process of evaluating whether to consent, a process that we expect will take a few weeks,” Brewer said in a June 11 email.
While the independent monitor’s primary role will be to work with the advisory boards of each hospital in the acquired system, the monitor will also “report to our office and to ANC or Dogwood,” Brewer said. She added that DOJ expects to receive reports “at least annually, and more often as necessary.”
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Candidates for the monitor position must have at least 12 years of management level experience with an acute care hospital or a health care system, including as CEO, CFO or COO, and must “never have been an officer, director, employee, consultant or other representative of any Seller or Buyer or any of their respective affiliates within the previous five years,” the asset purchase agreement states.
The monitor position is expected to remain in effect for a decade.
Both HCA and the attorney general have the right to consent in advance to the firm or individual to be hired as monitor, but that consent cannot be “unreasonably withheld,” according to an amended asset purchase agreement.
Neither Dogwood Health Trust’s new public relations firm, Charlotte-based LGA, nor Neil Luria, senior managing director at Solic Capital Advisors, the firm working with ANC Healthcare on Mission’s financial wind-down, returned messages seeking comment on the number of candidates who had been under consideration.
What’s at stake
As part of the purchase deal, HCA lengthened its commitment to provide specified services at local hospitals, from five years to 10 years. It agreed not to close facilities or cease providing services unless the new monitor and a local advisory board agree.
The company promised to build a new inpatient behavioral health hospital in Asheville and a replacement facility for Angel Medical Center in Franklin. HCA also promised a year of support for emergency medical services in Madison, Mitchell and Yancey counties.
Jay Nixon, a former Missouri governor and attorney general who created independent health foundations like Dogwood while dealing with HCA and Blue Cross Blue Shield in his own state, believes the activities of the independent monitor in North Carolina can go a long way in reducing community mistrust and skepticism.
Nixon visited Western North Carolina last fall at the invitation of several community groups concerned about the acquisition.
The two most vital roles the monitor can play are “preventing contention” and keeping the attorney general’s office “in the information loop,” Nixon, a partner at the law firm Dowd Bennett, told CPP.
In its first days, Nixon added, the monitor should develop detailed metrics for measuring compliance with the host of obligations faced by HCA and its North Carolina division to ensure that “promises that were made are lived up to in a consistent and legal manner.”
The new position can also help ward off litigation, he said.
“When you are five or six hospitals, and you have a number of construction projects, and you have ongoing obligations, when you have requests for dollars, those tend to cause disagreements,” Nixon said.
“Sometimes those disagreements can grow into longer-term problems.”
But an “active, informed, empowered independent monitor will be able to mediate out some of those,” the former governor said.
In addition, “well-formed, well-understood” grant-making policies at Dogwood Health Trust, which is currently searching for a CEO, are essential to gaining the public’s trust and avoiding institutional taint, Nixon said.
With no independent monitor currently in place and with employees, patients and interest groups trying to keep track of any job cuts, outsourcing activity or changes in accepted insurance, it may be easy for the public to assume the independent monitor is a full-time community ombudsman, Nixon said.
“This is not a position to run a hospital,” Nixon said. “You must get an early and appropriate education process that the public understands the role.”
While Mission Health’s missionhealthforward website was viewed 36,000 times in the lead-up to the acquisition and provided a platform for questions and answers on a broad range of presale concerns, that site is now shuttered.
“That portal was created by Mission Health … to help inform the community about becoming part of HCA and how the process was going. Because the process ended with a final purchase in February, the site was no longer needed,” said Nancy Lindell, a Mission Health spokesperson.
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“People tend to focus their attention right on the beginning, and the thing I would say to the public and the affiliated groups there is, stay involved in this,” Nixon said.
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