Mountain States to acquire Unicoi County Memorial Hospital

Brad Hicks • Nov 28, 2012 at 9:36 PM

ERWIN — Although the fate of Unicoi County Memorial Hospital has been the subject of numerous meetings and community interest for several months, the UCMH Board of Control quickly decided Wednesday that Mountain States Health Alliance is better suited to acquire the community hospital.

The board voted 5-2 in a brief public meeting held at Erwin Town Hall to accept the revised MSHA acquisition proposal submitted on Oct. 10 over a proposal submitted by Wellmont Health System on the same day.

“This is obviously a very important decision for the residents of Unicoi County, but I think what it does is it just continues on that very strong relationship that we’ve had for decades here between the residents of the Unicoi County and the services that we’ve been able to provide jointly with Unicoi County Memorial Hospital,” MSHA President/CEO Dennis Vonderfecht said following the board’s vote. “So, for us, it’s kind of just the continuing evolution of the development of a very strong relationship that is decades old.”

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

Vonderfecht said MSHA will now assume management of UCMH and work closely with the board on the details of the acquisition agreement between now and when final documents are signed. He said the process will then be reviewed by the state attorney general, and MSHA officials anticipate the transaction’s closing to occur in late January or February.

“We will make this community proud, just as we have made many other communities in Northeast Tennessee and Southwest Virginia proud of the services that we’ve been able to bring to their communities and, in many cases, the hospitals as well,” Vonderfecht said.

Both MSHA and Wellmont originally submitted proposals to the board in response to a request for proposals sent to each organization in late July to see what they would offer in acquiring financially-struggling UCMH. The board’s Executive Committee subsequently opted to move forward with MSHA’s proposal, and a public meeting was held Oct. 4 to formally accept this proposal.

However, after the Oct. 4 meeting was opened for public comment, the board voted to delay its decision and allow other health care organizations interested in acquiring UCMH to submit acquisition proposals. Both MSHA and Wellmont submitted revised proposals on Oct. 10, which led up to Wednesday’s meeting.

“We’re at a crossroads here at Unicoi County Memorial Hospital,” board Chairman Glenn Tilson said prior to the vote. “After a thorough, diligent, thoughtful process, we’ve come together this afternoon to make important decisions regarding the future of the hospital. It is time to look forward to a new future, to new opportunities, to new possibilities and to new challenges.”

Board Secretary/Treasurer Russell Brackins made the motion that the board approve MSHA’s proposal, which was seconded by Vice Chairman Roland Bailey. Those voting in favor of the motion were Brackins, Bailey, Tilson, Dr. Frank Wegman and Todd Love. Those voting against were Sue Jean Wilson and Jimmy Erwin. Wilson explained her reasons for opposing the measure to other members of the board prior to its vote.

“The other night when we were meeting with our attorneys, I asked if you all would take time to discuss this situation together, and you all did not choose to want to do that,” Wilson said. “If you think about it, if this passes, Mountain States will have total control of all the hospital beds in this county, Washington County, Johnson County, Carter County. Also, when the attorney general publishes a notice in the paper, he asks and gives his address for comments from the citizens. I can only imagine the deluge on the Postal Service, we may pay their indebtedness.

“How you can sit here knowing how people of this county feel, it’s obvious that you probably, some of you, don’t ever intend to run for office again.”

Although the board did not hear comments from members of the public gathered at Town Hall, its decision was met with jeers from Wellmont supporters, who appeared to make up most of the crowd, and applause from those in support of MSHA. Unicoi County resident Bill Gaines, who has been involved in local pro-Wellmont activities, voiced his dissatisfaction with the board’s decision.

“To say I’m disappointed would be an understatement,” Gaines said. “I think the board has acted in an arrogant and high-handed manner that totally cuts the people out of the process. They have ignored the wishes of the people, and I think that it’s not over because there’s still the attorney general’s review of this thing. There’s a lot of things that the attorney general will be considering, including what’s best for Unicoi County, and the proposals, the things that were offered. Wellmont is clearly better.”

Like Gaines, Wellmont President/CEO Denny DeNarvaez said she is disappointed in the board’s decision, but she added that it did not come as a surprise to her. However, she said the process does not end with the board’s decision as the attorney general must review the process, and she feels the Federal Trade Commission should review the decision. DeNarvaez also said her organization will maintain a presence in Unicoi County.

“We totally expected this result, we got that result,” she said. “This has been a very strange process from the beginning and, in our minds, pretty tainted from the beginning. So, we did our best and we certainly got what we really wanted, which was the popular vote. We got the community’s support. We still have the community’s support. That’s what’s going to keep us going.”

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