Decision on Unicoi County hospital expected today

Brad Hicks • Nov 28, 2012 at 9:16 AM

ERWIN — Unicoi County Memorial Hospital’s Board of Control will meet today to decide which of the two health care systems interested in acquiring the financially-struggling community hospital will assume its ownership.

In what could be the board’s final meeting — set for 4 p.m. at Erwin Town Hall — it is set to vote to accept an acquisition proposal from either Mountain States Health Alliance or Wellmont Health System.

The hospital’s most recent financial struggles were brought to light in May, when the Erwin Board of Mayor and Aldermen voted to loan the hospital $800,000. A stipulation of this arrangement was that the hospital board was to hire a consulting firm to provide an overall assessment of the hospital’s operations.

Spectrum Health Partners, the firm hired in early July to conduct this review, indicated that UCMH should look to partner with a larger health care system.

On July 30, the Board of Control sent requests for proposal to Wellmont and MSHA seeking what each entity would bring to the table in acquiring UCMH. Both systems submitted proposals and the board’s Executive Committee, made up of the chairman, vice chairman and secretary/treasurer, subsequently opted to move forward with MSHA’s proposal. The board held a public meeting Oct. 4 to formally accept MSHA’s proposal.

However, after that meeting, which was attended by a number of local officials and residents as well as representatives from Wellmont and MSHA, was opened to public comment, the board voted to delay acceptance of the proposal and chose to allow other health care organizations interested in acquiring UCMH to submit proposals.

On Oct. 10, both Wellmont and MSHA submitted revised acquisition proposals.

Commitments in Wellmont’s proposal include maintaining of all 48 of UCMH’s licensed beds between Erwin and a new facility that it will construct in Unicoi County. Wellmont has also pledged to immediately bring cardiology, pulmonary and oncology services to the county, as well assume UCMH’s full debt and financial obligations, retain its staff, provide a voluntary contribution of $600,000 each to the town of Erwin and Unicoi County and provide an unlimited line of credit to sustain operations at UCMH through the transaction’s closing.

In its proposal, MSHA also stated that it will assume UCMH’s debt and financial obligations, will retain UCMH staff and will provide voluntary contributions of $750,000 each to the town of Erwin and Unicoi County. MSHA has also committed to constructing a new acute care facility within Erwin, will provide UCMH with a $2 million line of credit, and will provide a $1 million contribution to go toward a foundation to enhance health care services within the county.

Officials from both organizations further discussed their respective proposals at a public forum held in late October. The day after this forum, the Board of Control voted to hire Asheville, N.C.-based law firm McGuire, Wood & Bissette to represent it during the acquisition process.

The board was set to meet with Wellmont and MSHA officials in closed strategic planning sessions on Nov. 15 to discuss the acquisition proposals, but those meetings were canceled the day they were to be held.

The heads of MSHA and Wellmong said Tuesday they are eager to see how the board will vote.

“We look forward to hearing from the board on Wednesday,” MSHA President/CEO Dennis Vonderfecht said Tuesday. “The seven members of this board have put a great deal of diligence into making their decision, and I thank them for the time and effort they have spent in representing the residents of Unicoi County.”

Wellmont President/CEO Denny DeNarvaez said she hopes the community’s support of a Wellmont acquisition and the needed competition it would provide will be taken into account by the board. She also said because the state attorney general must review the acquisition process after the board’s vote, Wellmont is committed to “battling for the community” even if the vote is not in its favor.

“Obviously, we’re hoping the community support that has been so obviously demonstrated at this point has had an impact on the board’s thinking,” DeNarvaez said. “We’re pretty aware that the original vote probably would not have gone in our direction, so we hope that the community engagement and involvement has had some sway on particular members of the board whose minds were made up at the beginning.”

Although today’s meeting is open to the public, Board Chairman Glenn Tilson previously said the board will not hear public comment prior to its vote.

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