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
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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