Unicoi Co. hospital sale to Mountain States approved

Brad Hicks • Mar 28, 2013 at 10:20 PM

ERWIN — The finish line in Mountain States Health Alliance’s acquisition of Unicoi County Memorial Hospital is in sight, as the UCMH Board of Control voted Thursday to approve MSHA’s final definitive agreement to acquire Unicoi County’s financially struggling community hospital.

The seven-member board voted 5-1 to approve the definitive agreement. While she said she “whole-heartedly” supports the board’s decision in choosing MSHA to acquire UCMH, Erwin Mayor Doris Hensley abstained from voting Thursday as she said she has relatives who are employed by entities affiliated with MSHA. Board member Sue Jean Wilson cast the lone dissenting vote.

Following the board’s vote, MSHA President/CEO Dennis Vonderfecht said the board’s approval of the final sale agreement should bring a sense of relief to both MSHA officials involved in the acquisition process and the staff at UCMH.

“We’re pleased to be where we’re at, and I think, as we’ve said all along persistence pays off,” Vonderfecht said, “and we’ve been very persistent because we know it’s the right decision for the community and for the patients.”

The events that led to Thursday’s vote date back nearly a year. Last May, the Erwin Board of Mayor and Aldermen voted to loan cash-strapped UCMH $800,000 to cover operational expenses. A caveat of the loan agreement was that the Board of Control was to hire a consulting firm to assess overall hospital operations. To comply with this stipulation, the board hired Spectrum Health Partners in July, and the firm would eventually recommend UCMH look to partner with a larger health care organization.

In late July, the board solicited requests for proposals to both MSHA and Wellmont Health System to see what each entity would bring to the table in acquiring UCMH. Both organizations submitted proposals, and the board’s Executive Committee subsequently met in a strategic planning session, where it opted to move forward with MSHA’s proposal.

On Oct. 4, the board held a public meeting to formally accept the MSHA proposal, but when this meeting was opened for public comment, the board held off on making a decision and allowed other health care entities interested in acquiring UCMH to submit proposals. Both MSHA and Wellmont submitted revised acquisition proposals, and at a public meeting on Nov. 28, the board voted to accept MSHA’s proposal.

Board of Control Secretary/Treasurer Russell Brackins made the motion to approve the resolution effecting the definitive agreement, which was seconded by board vice chair Todd Love. After the vote, Board of Control Chairman Roland Bailey commended the board’s efforts and said the vote has assured the future of medical services in Unicoi County for “at least another 60 years.”

“It symbolizes success,” Bailey said of the vote. “It demonstrates the hard work that was put in by the Board of Control. It has taken a lot of work to reach this point.”

Others involved in the process also praised the board’s decision. UCMH interim CEO Jete Edmisson said the action was needed.

“It’s that next step that we needed to get done so now it can get on to the attorney general, and I’m hoping they’ll look at the documents and make a swift decision so we can get all this stuff finalized and really take on the full benefit of what Mountain States can bring us,” Edmisson said.

The signed agreement and other documents related to the transaction will now be submitted to the state attorney general’s office for its review. The office will look to see if adequate documentation has been sent and once documents have been “deemed complete,” the office will have 45 days to review the acquisition process, although this time frame can be extended. After its review, the attorney general’s office will either object to the sale or take no action. Closing of the transaction will take place if the attorney general takes no action.

Wellmont Media Relations Coordinator Jim Wozniak said his organization will respect the attorney general’s review process and will participate if needed.

“It’s in the attorney general’s hands, and we’re certainly interested in what the attorney general has to say,” Wozniak said.

Wozniak also said Wellmont officials are appreciative of those in the community who supported a Wellmont acquisition of UCMH.

“Wellmont continues to be grateful for the tremendous outpouring of support in the community for our services,” Wozniak said. “We thank everyone who has worked on our behalf.”

Wilson said it was this support that led her to cast the dissenting vote Thursday. She said she felt the majority of the county’s residents supported a Wellmont acquisition of UCMH.

“I felt that’s what needed to be done, so that’s why I voted ‘no,’ ” she said.

However, Vonderfecht said he is confident county residents will be happy with the ultimate outcome of the MSHA acquisition.

“It’s kind of a new era for health care for Unicoi County Memorial Hospital,” Vonderfecht said. “Being a part of a system with all of the benefits a large system like Mountain States can bring to the table. They haven’t had the ability to have a lot of those assets, really, that could be brought into play in providing health care for the residents here.”

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