N.C. Attorney General Approves Sale of Rural Hospital System, But with Added Protections

Advocates pushed for provisions in the deal that would promise continued healthcare in smaller communities. They’re heartened to see their efforts seem to have worked.

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Citizens were concerned. They voiced those concerns. And it appears their voices were heard.

When it was announced in August that Nashville-based HCA Healthcare had reached a deal to purchase Mission Health, many residents of Western North Carolina – most particularly those in the region’s rural communities – had trepidations about ceding control of their health care future to an outside operation.

Mission Health is based in Asheville, a city of 90,000 and the economic hub of otherwise largely rural Western North Carolina. It’s a not-for-profit health care system – the only one managed in the region – covering 18 counties. In addition to its flagship medical center, Mission Hospital in Asheville, Mission owns five smaller hospitals in the surrounding rural counties.

SEE RELATED STORY: Rural Areas Push for More Assurances in N.C. Hospital Sale

HCA is a for-profit system that owns 178 hospitals in 20 states. The asset purchase agreement stipulated that a newly formed foundation called the Dogwood Health Trust would manage the proceeds of the sale, with an objective to use social determinants of health to improve the health and well-being of the communities Mission Health now serves.

The $1.5 billion deal was contingent on the approval of North Carolina Attorney General Josh Stein. Stein deliberated for some five months, and last week announced that he was granting that approval, but with the addition of significant provisions to preserve the delivery of health care services throughout the whole of the region – provisions that were agreed to by HCA and Mission Health.

“It really feels like we all pulled together to do some good things for the people of Western North Carolina,” said Risa Larsen, one of many of the region’s residents who advocated for more protections. “We’re overwhelmed with the fact that what’s in the new agreement way exceeded our expectations.”

Heightened Oversight

In the original draft of the agreement between HCA and Mission, HCA committed to providing services at the smaller regional hospitals for five years. That commitment has now been extended to 10 years.

The revision also provides more explicit language on exactly what services must be provided.

Further, HCA is prohibited from closing any facilities or discontinuing services unless agreed upon by both a hospital’s local advisory board and an independent monitor. That monitor will also regularly review whether HCA is maintaining its overall commitments.

Jay Nixon, the former governor and attorney general of Missouri who was brought in by citizen advocates as an advocacy consultant while the attorney general deliberated over the proposed sale, said the addition of this independent oversight is a significant development. Advocates feared that a local advisory board would alone be insufficient protection, given that half of its members would be appointed by HCA, the other half by Mission.

Nixon, who, as Missouri’s attorney general, challenged HCA in the courts, is also encouraged by the enforcement powers the agreement vests in the attorney general’s office, and in measures added to maintain transparency.

According to the agreement letter, Dogwood Trust will hold public meetings “to discuss the needs of the region and to obtain input on the priorities for addressing the social determinants of health” in Western North Carolina.

Dogwood will hold an open meeting with the public each year and will provide an annual report detailing how it’s using its funds

“General Stein and his staff stepped up to the challenge,” Nixon said, “and I believe the citizens of the region were a very positive, direct force in assisting him and his team in dramatically improving this agreement and raising the clear opportunities that the region will have for decades to come.”

Committing to Diversity

Equally important to advocates was regional, ethnic and gender diversity on the proposed 15-member Dogwood Health Trust board.

Dogwood has committed to having no more than five members from any one county by Jan. 1 of next year and no more than four members from any county by 2021. This is good news for those who feared the board would be Asheville-centric, removed from the concerns of its rural neighbors. The Dogwood board must include at least one member from each of the five regions with a hospital by Jan. 1 of next year.

And in a commitment letter to Stein’s office, Dogwood chair Janice Brumit wrote that the foundation would take into consideration ethnic and gender diversity as part of the its “commitment to be fully and fairly representative of western North Carolina.”

The revised agreement gives the local foundations that oversee the individual hospitals more flexibility in pursuing their own health care initiatives. And the local foundations and Dogwood Health Trust will have the right to bid on hospitals if they’re put on the market or closed.

The deal also stipulates that Dogwood will commit $25 million over five years to addressing opioid use disorder.

“Access to healthcare is truly a life or death issue,” Stein said in a press release announcing the agreement. “I am satisfied that this new agreement protects healthcare in western North Carolina, ensures that the full value of Mission’s assets will continue to be used for public purposes, and requires that the Dogwood Health Trust will be independent and representative.”

Due Diligence

Risa Larsen said the wait for Stein’s decision had been anxiety-inducing; the outcome, sweet.

“We really appreciate the hard work that the attorney general, his office, Mission, HCA and Dogwood Health Trust have done,” Larsen said. “I mean, good night, they’ve been working hard. The 10-year commitment on the rural hospitals, the more explicit language about the services, the independent monitoring – I never would have thought that would happen.”

“I’m delighted,” said Highlands Mayor Pat Taylor, who’s been at the forefront of the effort to secure more protections.

Asked if he saw any holes in the agreement, Taylor said, “Not anything that can’t be addressed and worked out. This is a complicated process, so I know there are going to be some problems and some holes. But I think we have a good foundation now to all work together to provide good health care for this region.”

“It’s important to take a deep breath,” Nixon said, and assess the task ahead. Western North Carolina will now have “a $1.5 billion foundation specifically to address health outcomes in the region while not taking away any of the hospitals or institutions.”

“But the public is going to have to stay involved,” he cautioned. “You saw in this situation, I believe, that an involved public – an informed citizenry that respectfully, in essence, petitioned their government – was a positive force for goodness here.”

“This is how it’s supposed to work. This is what democracy is supposed to look like,” Nixon avowed, praising Stein’s office for its openness and availability to all parties involved. “But I do think that folks are going to have to continue to stay vigilant.”

“Everybody played a part in moving this to a better place,” he concluded, “but everybody needs to continue to play a part in making sure it delivers the maximum of its capacity.”

This story was originally published at 100 Days in Appalachia   and is republished here with permission.

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