Monday, February 20, 2012

Leigh rants, Memorial responds

Posted By on Mon, Feb 20, 2012 at 1:22 PM

In his so-called "Weekend Market Report," Councilman Tim Leigh rants and raves against city-owned Memorial Health System. It's almost like Leigh welcomes some kind of scandal to further complicate the city's negotiation process with University of Colorado Health System for a lease of Memorial.

Leigh, whose wife is a nurse at Memorial, issued a list of things he's "been told." As you read, keep in mind that even if these things are accurate (or largely accurate), some of them would have happened before the current executive team's arrival.

Leigh: Ranting again.
  • Leigh: Lots to say, always.

Here's his diatribe:

Over the past 12 months, I have been approached by dozens of physicians who didn’t buy-into MHS Leader’s plan to employ all physicians and thereby grow the hospital. These physicians represent the broad spectrum of health care - general practitioners; cardiologist, radiologist, pulmonologists, anesthesiologists, oncologists, orthopedic surgeons, gastroenterologists. They all recount the same basic story — they can’t negotiate with the administration because they will not “get with the program” and they don’t dare “go public” for fear of reprisal.

· I’ve been told in 2007/2008, MHS invested $3,000,000 to finish 30,000 square feet at 4110 Briargate Parkway (a Medical Office Building owned HCP Briargate MOB, LLC., a private, for-profit interest) in a deal to operate a surgery center. The deal fell apart and MHS has been paying $750,000 per year in rent since - for space that’s still empty!

o At 10%, the capitalized value of a $750,000 lease payment equals $7,500,000 of debt
§ Does that debt impact the negotiation with any Lessee?
§ Are there other of these obligations we don’t know about?
o I’ve been told there have been at least 2 attempts by private practitioners to sub-lease the vacant Briargate space (alleviating the $750,000 cost) that have failed

· I’ve been told that there was a similar situation at the Printer’s Park Medical Plaza which failed and ultimately forced MHS to sell to NV Printers Park MOB, LLC (another 3rd party, for-profit entity) because of deteriorating financial metrics, and in that process MHS had to sign a very (Landlord favored), long-term lease to guaranty the transaction.

· I’ve been told there’s a program at MHS designed to restrict “First Assist” positions. First Assist’s are typically highly trained Nurse Practitioners and Physician Assistants who are the surgeon’s immediate assistant. I’ve been told MHS’s program is not part of a nationally recognized protocol. I’ve been told the program was emplaced because MHS’s operational process is to employ “their” First Assist folks so MHS (not the surgeon) could collect the billing for them and to create a barrier for physicians to bring their own First Assist to surgery.

· Last fall at Council, the CEO told us the financial situation at MHS was so dire that it would be subject to bond default and 3rd party management by December. Then, after the City Council decided to look at competitive Lessee bids, we were told MHS Leadership “had a plan” and the system was so healthy “no 3rd party proposal was necessary”.

· At Council, we’ve been told we have 189 days cash-on-hand. While that sounds good; without context, it has no bearing. A good question might be, “What would our day’s cash-on-hand be if we’d taken advantage of missed business and operational opportunities?” Would we be negotiating as a take-over, merging as superior or growing our system organically?

· At Council, we’ve been told by the current leadership that our emergency department earns about 4% profit from operations and that any new Lessee would likely reduce the size and scope of services because it is an “underperformer”. But, I’ve also been told the typical emergency department should earn around 19% and that likely, instead of reduction, we should expect expansion in services and size. Which is it?

· At Council, we’ve been told we need to consider an exit-payment plan for the current leadership and if we don’t some may quit “leaving-us hanging”. I don’t do well with threats. I say adios and good riddance - don’t let the door hit you on the way out! Look - you can’t buy loyalty, and employees are either inside the tent or not. Given the circumstances presented, why would we support golden parachutes?

MHS is a very desirable take-over prospect because experts see what we (Councilors) don’t, because we’re not experts. We can merely ask questions and hope for answers. Since answers are not typically forthcoming, and realizing there are many sides to every story, and realizing we have no process inside the current system to investigate stories for validity or invalidity, my 3-legged call is for 1) an immediate, arms-length investigation initiated by the Mayor’s office; 2) the immediate coincidental administrative leave of the CEO and his Chief Strategy officer; and 3) the promotion of the CFO to Interim CEO.

Since MHS is currently negotiating with UCH in good faith, we would be remiss if we didn’t share this information so as to ensure no derailment of the current process.

James P. Moore, chairman of Memorial's board of trustees, responded on Memorial's blog thefutureofhealthcare.com:

The Board of Trustees is disappointed that Mr. Leigh has chosen to air anonymous rumors and innuendo in such a public way, without any attempt to substantiate the claims or understand the matters in context.

The facts tell a different story, and we will be addressing Mr. Leigh’s email with City Council directly, and in the honest manner to which we have always committed.

In his email, Mr. Leigh suggests that Memorial has not been honest with Council, questions our decision-making, and calls for ousting our CEO Larry McEvoy and CSO Carm Moceri. He has not discussed these matters with us.

The Board of Trustees fully supports McEvoy, Moceri and the rest of Memorial’s senior leadership team. Further, we stand beside the staff and physicians at Memorial, who remain focused on patient care. We are as committed as ever to keeping our organization as healthy as possible during this time of transition.

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