Deal with UHS approved
Published 12:48 am Friday, August 26, 2011
The Beaufort County Board of Commissioners Thursday approved a resolution that will lead to the takeover of the local hospital and affiliated medical practices by Greenville-based University Health Systems of Eastern Carolina.
And minutes after the board voted 5-2 to give him the authority to do so, board Chairman Jerry Langley signed the papers solidifying the deal to allow UHS to take over management of Beaufort Regional Health System effective Sept. 1.
Commissioners Hood Richardson and Stan Deatherage cast dissenting votes.
Richardson read a one-page statement at the commissioners’ meeting, and at an earlier meeting of the hospital governing boards, opposing the vote.
“This vote is important because it signifies lost opportunity and failure,” he said.
His statement also cited the hospital’s governing boards and the county commissioners for failing to properly oversee the management of the hospital and said, by their votes, the hospital’s governing boards “are giving away $50 million in real estate and business value.”
Deatherage also read a statement opposing the vote.
Saying that the outspoken support of UHS by some members of the community had damaged the county’s negotiating position, Deatherage said, “To become a party to this behavior, which is so alien to the way I do business, would be untenable, and therefore, I will not lend credence to this process, with my vote.”
About two dozen people attended the county commissioners’ meeting.
The vote by the commissioners followed action earlier in the day approving five resolutions that also solidify the deal.
It came after the word-for-word reading of a four-page resolution by Commissioner Jay McRoy that gave a history of the negotiations and stipulates that “UHS, in accordance with the provisions of the Resolution, will meet the health-related needs of the medically underserved groups, such as low income persons, racial and ethnic minorities, and handicapped persons” and finds “that the conveyance of the Hospital Assets is in the public interest.”
The votes come at the end of 1 1/2 year-long debate that began in April 2010 when the BRHS board voted to hire HealthCare Appraisers Inc. of Delray Beach, Fla., to explore options, including an arrangement whereby county leaders would lease the local hospital and its affiliated medical practices to another health care system.
After receiving five offers from four health care systems, the BRHS board initially accepted a proposal from Community Health Systems. But after protests by local residents and a lawsuit filed seeking a delay in the vote to approve that deal by the county commissioners CHS withdrew its offer. In January 2011, the BRHS board accepted the UHS proposal.
In a series of votes which their chairwoman called “exceptional,” the Beaufort Regional Health System Board of Commissioners and the Beaufort County Hospital Authority Board of Trustees voted 7-1 earlier Thursday to approve the agreement with UHS.
“This is not the end of it but it is certainly 99 percent of where we need to be in terms of health care for this community,” said board Chairwoman Alice Mills Sadler after the series of votes.
Richardson, also a member of the health care boards, was the sole dissenter in each vote.
“This is an exceptional moment in the history of Beaufort Regional Health System and UHS,” Sadler said, adding, “This has been a long journey.”
“The board has made to the best of their ability the best decision based on the information before it,” Sadler said.
Richardson took issue with Sadler’s comments saying that “all of the information that was needed … was not presented to this board.”
“This hospital has been lost because of the inability of this board and the county commissioners to do their duty,” he said.
Although the vote last week by the UHS governing board to approve the transaction took only about a minute, the reading of the resolutions to the local boards by their lawyer, Joseph Kahn, lasted about an hour and 45 minutes.
While previous votes of the two boards had been attended by a standing-room-only crowd, today’s vote was witnessed by just a handful of people and representatives of news agencies.
And other than statements by a few of the board members, the resolutions were approved with little discussion.
In addition to authorizing the boards’ officers to sign the transaction agreements for the management of the local health system by UHS, the resolutions also authorized the transfer of hospital benefit plans, a corporation that employs some of the local doctors and two joint ventures to UHS or its affiliated medical practices.
The offer by UHS for the lease/purchase of BRHS remains at $25 million for a 30-year lease for the hospital and affiliated medical practices operated by BRHS, under terms of a proposed lease agreement released Monday.
Most of the money paid by UHS to Beaufort County will be used to pay off loans and any other financial obligations related to the local health care system with some $6 million designated for an escrow account to cover any financial liabilities that arise after the lease is signed.
UHS also continues its promise to make $21 million in capital expenditures — less any expenses for excluded liabilities — during the first five years of the lease including a new electronic medical record system, emergency room expansion and renovation, renovation of patient rooms and expansion or renovation of the Marion L. Shepard Cancer Center along with other routine capital expenditures.
And UHS continues to have the option, at the end of the lease, to buy the hospital and clinic operations for $10 million less any excluded liabilities. There are 17 such liabilities listed in the agreement.
All county commissioners attended the meeting. BRHS and BCHA board member Howard Cadmus was absent from those meetings. BRHS and BCHA board member Clifton Gray participated in those meetings by telephone.