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12.22.2004
Health Care News—DPH Approves Sale of St. Vincent Hospital/MetroWest
Medical Center—Community Coalition Raises Concerns
Below is a story concerning a recent decision by the state's
Public Health Council to approve the transfer of ownership and
operating license of St. Vincent Hospital in Worcester and MetroWest
Medical Center in Framingham from Tenet Healthcare to Vanguard
Health Systems. Quoted in the story is MNA Board Member Sandy
Ellis, a nurse at St. Vincent Hospital and spokesperson at the
hearing for the Worcester Health Care Coalition. While supporting
the sale, Ellis and the Coalition used the opportunity to raise
questions about the lack of strong conditions in the sale to
protect the interests of the community, as well as to question
DPH's ability under current law to adequately regulate the health
care system and to protect essential services. While the Coalition
had sought a written five-year commitment by the multi-billion
dollar corporation to maintain all existing services provided
at these facilities, no such condition was required by DPH. One
positive outcome of this effort was a commitment by the Public
Health Council to review the status of facilities operations
under Vanguard every six months for the next four years. In addition
to the news story below, the full text of the Coalition testimony
is also provided in this email.
Purchase of St. V approved
Health board OKs sale of 3 hospitals
By Lisa Eckelbecker TELEGRAM & GAZETTE STAFF
leckelbecker@telegram.com
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BOSTON—Vanguard Health Systems Inc. yesterday edged closer
to completing its $126.7 million purchase of three Massachusetts
hospitals, including St. Vincent Hospital of Worcester, as the
state's Public Health Council gave its approval to the deal.
The council voted without opposition to allow ownership of St.
Vincent Hospital at Worcester Medical Center and MetroWest Medical
Center of Framingham and Natick to shift from Tenet Healthcare
Corp. of Dallas, the nation's largest for-profit hospital chain,
to Vanguard.
Tenet is now cleared to complete the sale of the hospitals to
Vanguard, a privately held chain of 16 hospitals based in Nashville,
Tenn. Vanguard Vice Chairman Keith B. Pitts, who spoke yesterday
before the health council, said he was traveling directly to
California, where Tenet has operations, to wrap up the deal so
that Vanguard can take over in Worcester.
"We're looking forward to being there Jan. 1 and being
part of the community," Mr. Pitts said.
The sale is part of Tenet's attempt to shore up its ailing finances
and to focus on core hospitals in California, Florida, Louisiana
and Texas. The company has been selling off other hospitals across
the country in recent months as it deals with government investigations
into its billing practices.
St. Vincent, a 299-bed hospital, posted $1.8 million in operating
losses last year. Of the $126.7 million Vanguard is paying for
Massachusetts hospitals, about $57.2 million is going toward
buying St. Vincent.
Vanguard is paying $43.1 million for the MetroWest Medical Center,
which includes Framingham Union Hospital in Framingham and Leonard
Morse Hospital in Natick. The rest of the purchase price, $26.4
million, is for working capital.
St. Vincent Hospital is critical to Worcester, employing more
than 1,000 and paying millions of dollars to date in property
taxes. The full medical center, which includes the hospital and
medical offices, was built at a cost of more than $200 million
and serves as a downtown anchor.
Vanguard's ownership "is the right situation for our community
and the commonwealth, as well," said David P. Forsberg,
president of the Worcester Business Development Corp. "This
facility is an incredible accomplishment and it deserves good
stewardship." Mr. Forsberg was among those who addressed
the council.
The Public Health Council listened to presentations on the St.
Vincent Hospital deal for less than an hour before approving
the ownership change with five conditions:
- Vanguard must maintain or increase the hospital's
financial commitment to free care for the poor. St. Vincent
Hospital devotes
2.63 percent of gross patient service revenue to free care,
so Vanguard will be expected to do at least the same.
- Vanguard
must improve the hospital's interpreters program.
Vanguard must follow the state attorney general's community
benefit guidelines.
- Vanguard must seek input from community
organizations on how to best meet the area's mental health
needs.
- Vanguard must meet every six months for up
to four years with community organizations on overall community
health
care needs.
Vanguard must also report to the Public Health Council
about the process every six months for up to four years.
Government and community officials
generally expressed support for Vanguard yesterday, though
a coalition
of labor and community
health organizations cautioned that the state
needs stronger powers to make sure for-profit hospitals
maintain
health
services that are important to communities.
Sandy A. Ellis, a member of the Massachusetts Nurses Association
and spokeswoman for a group called the Worcester Health Care
Coalition, said the coalition supported Vanguard's purchase,
but wanted the company to maintain certain services for five
years. Vanguard declined to make any agreement with the group,
and Mrs. Ellis, a psychiatric nurse at St. Vincent Hospital,
said the group was particularly concerned about maintaining the
hospital's psychiatric unit.
"We are very afraid that as little as 18 months from now,
we could be sitting at a hearing about some continuation of service," she
said.
Vanguard's proposal to buy St. Vincent marks the second time
the company's officials have taken control of the hospital. Vanguard
President and Chief Executive Officer Charles N. Martin Jr. and
Mr. Pitts were executives with OrNda HealthCorp of Nashville
in 1996 when the company bought St. Vincent Hospital and converted
it from a nonprofit entity to a for-profit business.
The deal raised concerns about whether a for-profit owner would
skimp on charitable care and expensive community services. Concerns
grew months later, when Tenet acquired OrNda and became the hospital's
new owner.
State Rep. Vincent A. Pedone, D-Worcester, told
the council yesterday that he thinks those fears have subsided
in the last
eight years. We've learned, he said, that "for-profit health
care is not an enemy to good public health care."
Public Health Council member Albert Sherman, vice chancellor
of the University of Massachusetts Medical School, removed himself
from the voting because of his employment at the school, which
is affiliated with St. Vincent Hospital's crosstown competitor,
UMass Memorial Health Care Inc.
But, Mr. Sherman said, "I, too, believe
they are quality operators and will do the city of Worcester
proud."
Public Health Commissioner Christine D. Ferguson said she was
relieved by the positive reaction to Vanguard's deal.
"I have to say, it's been much different than I feared," she
said.
Business Reporter Lisa Eckelbecker can be reached at leckelbecker@telegram.com.
Determination of Need/Public Health Council Meeting
On Sale of St. Vincent Hospital/Worcester Medical Center
Worcester Health Care Coalition Testimony
December 21, 2004
Good morning, my name is Sandy Ellis. I am a life-long resident
of the City of Worcester and the spokesperson today for the Worcester
Health Care Coalition, which includes the Mass. Senior Action
Council, Neighbor to Neighbor, the Latino Mental Health Project,
Health Care for All of Massachusetts and the Massachusetts Nurses
Association, of which I am a member on the board of directors.
I am also a practicing psychiatric nurse at St. Vincent Hospital.
On behalf of the Coalition I want to thank you for this opportunity.
We have been participating in this process in an effort to ensure
that the Department of Public Health utilize all of its regulatory
power and influence to ensure that the sale of St. Vincent Hospital
to Vanguard Health Systems occurs in a manner that places the
interests of patients of St. Vincent Hospital and the community
served by St. Vincent Hospital ahead of those of the free market
and the profits of shareholders on Wall Street.
Let us be clear, the Coalition supports the sale of this hospital
to Vanguard. The MNA acknowledges and applauds the positive statements
made by officials at Vanguard Health Systems in the early stages
of this process regarding their commitment to work with the community
and with employees and their unions as a good corporate citizen.
But we have also been down this road before. We have participated
at hearings and meetings like this one, where these issues were
discussed and promises were made, first by Columbia HCA in Framingham,
and later by Tenet in Framingham and in Worcester; promises to
maintain and enhance serves, to create community linkages, to
provide free care and community benefits.
We have seen how most of these promises were broken as the pressures
of the market overcame the commitment to the community. We also
saw those providers, having promised to become longstanding members
of the community, pack up and leave, placing our communities
under the threat of the loss of our health care safety net
We have participated in this process with the hope of convincing
DPH to use this experience to guide them in convincing these
new owners to adhere to strong, written and enforceable conditions
to protect the interests of the community.
In this present situation, our Coalition developed a set of
conditions that would provide those protections. The principle
condition being a guarantee to maintain all existing services
for five years. A similar Coalition for Framingham and Natick
did the same. Vanguard negotiated a watered down version of the
MetroWest conditions, while refusing to propose or negotiate
any kind of agreement with out coalition.
We have since reviewed the staff's recommendations for your
approval of this sale and transfer of ownership and we come away
disappointed and dismayed by the total lack of accountability
this agreement provides, but not at all surprised. For the MetroWest
facilities, Vanguard has committed to maintain existing services
for 18 months. For Worcester, they have agreed to no such commitment,
not that an 18 month commitment is worth much.
We understand that in dealing with the Determination of Need
process in Massachusetts we are dealing with what amounts to
a regulatory paper tiger, a toothless tiger lacking any ability
to require any form of accountability for a provider to maintain
essential services, and no process to truly evaluate and stipulate
what is truly needed and essential in the way of health care
services.
We are well aware that DPH is functioning as best it can in
a health care system created by the industry and the legislature
based on a free-market model, allowing hospitals to compete openly
and without restriction for
survival. In the ensuing years, more than 26 hospitals have closed
leaving thousands of residents with less access to care and services.
The most recent victim was Waltham Hospital, a facility that
DPH evaluated and was determined to provide essential services.
Yet, what happened? Rival providers, as promoted under the free
market model, took Waltham's physician base driving it to closure.
And nothing could be done to stop it.
We would ask you how many hospitals have to close, how many
communities must suffer the loss of their health care safety
net before our state government acts to protect those communities.
The unbridled reliance on a deregulated health care system is
failing our citizens and our communities and it must end. The
legislature and state government must take steps to enact health
care policies to stabilize the health care system and the hospital
industry in Massachusetts.
First, the legislature must begin the development and implementation
of a state health care policy that sets short and long term goals
for health reform in Massachusetts and guarantees access to all
essential health care services.
Second, hospital stabilization legislation to regulate Massachusetts
hospitals to ensure the survival of needed facilities to meet
the health care needs of the state's residents needs to pass.
Ultimately, DPH needs real power to hold health care providers
accountable for providing essential services and to prevent them
from eliminating services that are deemed essential.
As I said earlier in my testimony, we are supporting this sale.
We truly hope that Vanguard is successful and that they will
see it in their best interest to honor their commitments to the
communities they are entering. But should history repeat itself
and we find ourselves back here again, it is our hope that you
will be sitting in a position of real power to truly protect
the interests of those whose lives depend on the decisions that
you make.
Thank you.
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