Earlier this week, he responded to our pubic records request letter and charge of a Brown Act violation. Essentially, he argued that the board can establish a special or ad hoc subcommittee to deal with these types of issues. The subcommittee does not have to report as a Brown Act body.
Keep in mind, if that is true, nobody else can be part of that subcommittee including PHH members, otherwise it is opened to the public. I’ll attach his letter tomorrow.
But today, he did send the criteria, which the board will use to evaluate the PHH offer. These are below. Please note, they are dated, July 10.
That is only 11 days after the June 29 board of directors meeting where they collectively decided to pursue the “dual track” of exploring the possibility of selling the hospital as well as continuing to demonstrate improved financial health.
Gee, in 11 days they had already narrowed the “dual track” down to one “tie”.
At the July board meeting, the board agreed to grant PHH an exclusive negotiating position for 90 days. They approved this despite two different parties announcing their interest in the district’s assets.
Days later, a national hospital management firm, Universal Health Services, wrote the board and expressed their interested. I’ve asked for confirmaion of this offer and any others, but haven’t heard from VHS yet.
That’s 3 separate parties besides PHH.
Do you think the directors are meeting their fiduciary responsibility to the district’s constituents? If PHH is the high bidder, VHS could use the additional funds to care for the concerns that might go untouched in PHH’s absence. That’s the typical economist argument for bidding rather than sweetheart deals.
VHS criteria for evaluating what? The dual track was to evaluate the concept of a sale. The first sentence of this document clearly states, VHS is developing criteria to evaluate PHH only. Weeks before the board even voted to do this.
Point number 2 suggests some physicians may have low admissions. Isn't that the issue, the number of patient days is less than estimated? Since some physicians are creditors in the bankruptcy proceedings, how does the public know this sale is not being manipulated behind closed doors?
Point 7 seems important to the public but the board's subcommittee defers it to focus on point 5 — obtain public support and marketing. Wow, our hospital is just like tooth paste or our favorite brand of detergent! Do you think they might offer coupons good for half price surgery or free TV with the purchase of a certain number of hospital nights?
VHS Criteria for negotiating sale to PHH
PERFORMANCE CRITERIA
AD HOC COMMITTEE OF THE BOARD OF DIRECTORS
July 10, 2009
AD HOC COMMITTEE OF THE BOARD OF DIRECTORS
July 10, 2009
The Ad Hoc Committee has developed the following criteria as a starting point for discussion regarding the possible financial commitment of members of the physician community to a potential sale of assets of this Health Care District:
1. It is imperative that PHH identify/contact a credible, easily recognizable partner to move forward with any acquisition process. The reasons are twofold: physician unity is critical to the success of any proposal and the Board of Directors must have a high level of confidence that such proposal will be looked upon with favor by the district electorate.
2. Mindful of legal restrictions, PHH is encouraged to make certain physicians with high admission rates support the project and are willing participants. (Needs to be re-worked with assistance from our legal counsel as to how this should be presented). I understand it is a potential mine field and must be constructed/crafted with care.)
3. PHH must submit to the Ad Hoc Committee a business plan which addresses the major issues facing the district, i.e., revenue and operations. PHH must be able to outline how it will address these issues with specificity and a reasonable timeline for accomplishment.
4. Full disclosure of financing plan must be provided. On this issue, transparency is critical, especially to the electorate. Anything less will not and cannot be accepted by the Board of Directors of VHS.
5. Initially, PHH must be able to demonstrate its ability to obtain community support for its proposal. How will this purchase be marketed to the general public, and what level of funding has been established to support a marketing blitz are questions requiring a satisfactory response.
FOR FUTURE DISCUSSIONS
6. What, if any, assets of Valley Health System are off the table.
7. Commitment to maintain community-based hospital--Hemet and Menifee.
8. Retention of Hospital District model.
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