google-site-verification: google5ae98130f18ad244.html

Saturday, December 15, 2018
   
Text Size

Health & Hospitals

Why is Memorial Hospital Being Sold? Details on the deal Memorial Health, Inc. Board has Negotiated with Novant Health, Inc.

Category: Health & Hospitals

 

PHOTO:  Exhibit in Certificate of Need deal by Memorial board to explain the Organization Chart when Novant Health, Inc. acquires Memorial Health, Inc, and Memorial University Medical Center. 

By Lou Phelps, Savannah Business Journal

January 26, 2016 – Details of the closed-door deal that the Board of Directors of Memorial Health, Inc. has negotiated with Novant Health, Inc. to sell them Memorial hospital are outlined in a three-inch-thick book entitled “CON (Certificate of Need) Novant Health, Inc./Memorial Health, Inc. 

It was officially filed with the Georgia Dept. of Community Services on Dec. 7, 2015, providing the public with a 60-day period to comment, and is available for view at the Chatham County Administrative Offices on Bull Street.

County Commission Chairman Al Scott received a cover letter and the document Dec. 4, 2015.

But the Chatham County Commissioners were not informed of its existence, based on interviews with three Commissioners this week, even though it sitting just a few feet away in the County Manager’s offices. 

And, the public, physicians and employees of Memorial who may oppose the deal – or a County Commissioner – are not aware that any comments in opposition to the plan must be submitted by Feb. 7, just 12 days from now.

The County Commissioners have cancelled their meeting for this Friday, January 29. They’ll all be returning from Savannah-Chatham Day at the Statehouse.  Their next meeting is not scheduled until Friday, Feb. 12, according to Commissioner Helen Stone, Vice Chairman. 

The transaction has not been discussed publicly by the hospital’s board or the Chatham County Commissioners.  Physicians and employees of Memorial University Medical Center - the entity that is the “Operator” of the hospital that is owned by Memorial Health University Medical Center, Inc. which is owned by Memorial Health, Inc.- are also unaware of its details and their future, except for a handful of physicians that sit on the MHI board. 

The MHI Board and the Board of the MUMC are set for their first meeting since November at 5:00 p.m. today.  The Chatham County Hospital Authority has announced a meeting for tomorrow morning at 9:00 a.m. They normally meet only quarterly or semi-annually. 

But the Agendas for all of the meetings call for the convening their meetings and then going into Executive Session.  There are no items regarding an update on the sale of Memorial Hospital.  

Because there has been no public discussion by the County Commissioners or the Memorial Health, Inc. Board, there is no information available on other options that the Board considered, such as employing a management company to run Memorial – and removing the current leadership team – or other possible deals that were considered.  No Request for Qualifications or Requests for Proposals were issued, to put the hospital out to bid through a public process.  

Well-informed sources state that members of the Chatham County Hospital Authority (CCHA) are not happy with Maggie Gill’s leadership. But, whether there were any negative votes on extending the lease for the land and buildings that the County owns – an asset of Chatham County – is not known.  It was announced in November that the CCHA had approved a 40-year extension for $1.00 a year. 

Certainly, many hospitals in the U.S. that have high levels of indigent care struggle to remain profitable. But, as Sen. Lester Jackson pointed out last week in an interview on the Memorial deal, both Augusta and Macon hospital's are profitable, and face enormous indigent care patient loads.  Locally, the St. Joseph's/Candler hospitals also have large indigent care, and un-reimbursed hospital costs they must shoulder annually.  

Here are some of the highlights of the Agreement that the Memorial Board apparently approved back on Sept. 21, 2015 when a ‘Letter of Intent’ was sent to Carl Armato, president and CEO of Novant, signed by Memorial Health, Inc, board chairman Harry Haslam Jr. and Maggie Gill, president and CEO:   

  • Novant Health, Inc. is acquiring Memorial Health, Inc.  The Winston-Salem, NC company will be become a ‘sole member,’ of Memorial Health, Inc., the umbrella corporation that owns Memorial University Medical Center (MUHC) and the hospital’s other entities.
  • As of the day of takeover, Novant will have sole control over operating budgets.
  • One member of the Memorial Health, Inc. board can be nominated to sit on the Novant Health, Inc, board, but Novant must approve the nomination.
  • There will be a local “Community Board,” but Novant has the final say over all appointees. 
  • Until the bonds are paid off that that Chatham County taxpayers guaranteed, the present board will remain in place unless a member is removed for cause, but Novant has the final say on any new appointees, and Novant has budgetary and hiring/firing and all other control.
  • Novant guarantees the jobs of the employees of MHI/MUMC for only one year.
  • Novant guarantees the jobs of the physicians of MHI/MUMC for only one year.
  • Novant agrees to pay off the hospital’s $160 million in bonds currently guaranteed by Chatham County over a period of time that is not designated, but as soon as “is economically feasible.”  Once paid off, other powers accrue to Novant.  While bonds have an early payoff penalty, there is nothing stopping Novant was doing so immediately, or refinancing the bonds under their guarantee. 
  • Novant agrees that until those Series 2012A bonds are paid off, “it shall not divest itself of any or all of its interest in Memorial or take or allow any action or inaction that would result in a loss of control of Memorial by Novant (each, a “Divestiture.”) That’s because this IS an acquisition – not a merger – and they can sell the hospital if they want in the future.  
  • The Memorial Board shall have a right of first refusal to repurchase Memorial in the event of a proposed Divestiture. The price will include buying all debt on the Balance Sheet, but there is no control over how much debt Novant can incur, and the practicality of Chatham County being able to buy back their hospital is unclear.
  • Novant has outlined “Priority Strategic Matters and Estimated Cost” for service expansion, but there are no dates or guarantees.  Four projects are listed which include ideas such as ia $35 million expansion in Pooler on what is termed “owned land,” presumably land owned by Chatham County.
  • Novant has agreed to make a $280 capital investment over the next 10 years – an average of $28 million a year.  But, the hospital spends millions a year in “capital investments” to update and replace equipment and renovate buildings, including projects that have been heavily funded by charitable giving through the work of the Memorial Hospital Foundation.
  • The deal calls for the Bylaws of the Memorial Health, Inc. corporation to be changed at Close to provide for all of the deal specifics above.

Stone states that she plans to dig into the deal now, and ask questions, as does Commissioner Tony Center.  

Overall Rating (1)

5 out of 5 stars

Leave your comments

Post comment as a guest

0 / 300 Character restriction
Your text should be in between 10-300 characters
Your comments are subjected to administrator's moderation.
terms and condition.

    People in this conversation

    • Guest - Angry

      This is not what they are telling the team members at Memorial...

      Like 0 Short URL:
    • Guest - susan e van der Glas

      scary :( It is sad to see Memorial go to this company .

      Like 0 Short URL:
    • Guest - Lindsey

      Rated 5 out of 5 stars

      I absolutely believe this is going to be the best thing for the community. Memorial has been in a negative deficit for countless years and not one sole has been held accountable for the losses. It's now time for someone else to come in, clear house and start fresh and clean up the mess of Memorial.

      Like 0 Short URL:
    • Guest - Tao of Me

      Savannah, GA, USA

      They aren't telling Memorial employees anything about this. A recent survey of the facilities by Nicant staffers was billed as a "Joint Commission" practice survey. It was essentially a check of the facilities to see what Novant wanted to keep or improve.

      Like 0 Short URL:
    CLICK to SUBSCRIBE and Support Great Journalism!

    Follow Us!

    TwitterFacebook

    Komento Activities

    Guest - Maria Johnson Pleming - Commented on Oct. 25 - Department of Biolog... in Joomla Article
    So happy to know the Millen Fish Hatchery will be recognized for the incredible system. Mr uncle Dav...
    Guest - Karin Mcgruder - Commented on June 4 - Foram Group Announces... in Joomla Article
    Are there any updates on this project?and when will the first apartments be available?
    Guest - Hart Williford - Commented on June 28 - Savannah Music Festi... in Joomla Article
    Rob will be missed by the entire Savannah Community, he built the Savannah Music Festival to worldwi...
    Guest - Daryl Stair - Commented on Oct. 16 - Sonesta Resort Hilto... in Joomla Article
    Do you have to be a paying guest to use the Tesla charger?
    Guest - JR Lee - Commented on MPC approves plan for new Walm... in Joomla Article
    Great, another complex to attract Savannah's finest entitlement minded individuals. Another complex ...
    Guest - Jack - Commented on Aug. 23 - Phelps on Politics -... in Joomla Article
    "Goose that laid the golden EYE? You're right, that is hard to argue with.
    Guest - Robin Sherman - Commented on Jan. 4 – COMMENTARY: New Year... in Joomla Article
    Excellent post, Ms. Phelps. Effective government can only occur when the public is informed. Transpa...
    Guest - Tao of Me - Commented on Why is Memorial Hospital Being... in Joomla Article
    They aren't telling Memorial employees anything about this. A recent survey of the facilities by Nic...
    Guest - Genie Brazzeal - Commented on Feb. 24 – Lawyer and former Al... in Joomla Article
    Thank you, Mr. Bordeaux! Bring some honesty to this court. No more winking like I experienced.
    Guest - Karl - Commented on Feb. 25 - Memorial Hospital’s ... in Joomla Article
    Good article. Has a lot of information that is very difficult for "team members"(employees) to find....
    Guest - Susan Worthington - Commented on May 13 – UPDATED 11:39 a.m. HC... in Joomla Article
    In 1953 there was not such a thing as a trauma or neonatal program. The need for Neonatal Services ...
    Guest - Linda Dominy - Commented on June 8 – EDITORIAL: Immediate ... in Joomla Article
    As a clinical team member this makes me sad and it would never happen. We can argue politics all day...
    Guest - Judy - Commented on Savannah’s Title Max Bankruptc... in Joomla Article
    How Tracy Young was allowed to file for bankruptcy or chapter 11 is amazing. Title Max should be ch...
    Guest - Samantha Claar - Commented on Aug. 7 - COMMENTARY: Je suis “... in Joomla Article
    Pertinent questions that deserve real answers. If upper management - appointed and elected - can't ...
    Guest - Ken - Commented on Aug. 6 - Dept. of Labor propos... in Joomla Article
    Is this state or federal?
    MY ACCOUNT
    CONTACT
    SOCIAL
    MORE
    ADVERTISE
    Coastal Empire News
    Headquarters: 35 Barnard St., Suite 300, Savannah, GA. 31401.
    Tel: 912-388-4692 | Hours: 8:30 a.m. to 5:00 p.m.