Doctors take a stand out of fear for MedWest-Harris’ futureWritten by Becky Johnson
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When Dr. Bob Adams walked into a hospital-wide meeting of Jackson County doctors in early January, he believed he had finally mustered the critical mass to demand action, action that so far had been elusive despite a year of working internally to bring change.
But, he made a fatal miscalculation. The message doctors would ultimately send up the chain that night to the WestCare board of directors would be rejected.
Some doctors had become disillusioned with the Charlotte-based management firm that had been at the helm of the MedWest venture since its inception two years ago. They voted 31 to 3 to ask the board of directors to go to Mission Hospital, hear what it had to say and consider whether it would be a better partner.
It’s rare for the majority of doctors at a hospital to make a formal and pointed request to their board of directors. The issue had been escalating for months by then, and as the community would later learn, had not yet reached its climax.
A core group of concerned doctors began meeting in early 2010, discussing their perception of problems at Harris, which was struggling financially and had lost 10 percent of its inpatient business to Mission. Initially, they took their issues up directly with MedWest CEO Mike Poore. Unsatisfied, however, they opened a line of communication with the hospital board of directors, sitting down with key members in one-on-one meetings.
By summer, however, the airing of concerns became a standing topic at the monthly meetings of all the Harris’ physicians, marked by a heated exchange or two with Poore before the roomful of doctors.
Eventually, Poore knighted the core group of concerned doctors with an official title — the “kitchen cabinet” committee — in an apparent attempt to address the issues.
Meanwhile, doctors ramped up their line of communication with the hospital board, a rather brazen move to go over Poore’s head.
“We go in and sit down and talk and start expressing our concerns directly to the board,” said Dr. Randy Savell, a long-time gastroenterologist at Harris. “They were surprised. They suggested they had no idea how things were.”
The meetings with the board continued for several weeks, and while the board members were willing listeners, the doctors couldn’t spur them to take action.
“We never got anywhere, but they were being very surprised and shocked and concerned,” Savell said.
Some in the core group oscillated between caring about the management structure and just going back to doing what they did best: caring for patients.
“After a while, you get worn out. You get tired of fighting,” said Dr. Earl Haddock, a pulmonologist at Harris.
Two of the doctors in the “kitchen cabinet” had been on the hospital board themselves but had resigned earlier that year after growing disenchanted.
“The thing that struck me is nobody asks questions,” Dr. Waverly Green said of why he resigned from the board. “If it was a place where there would be honest discussion and be about the future of the hospital, I am happy to be a part of that. but I am not going to sit in a room and rubber stamp things that to me make no sense.”
Between a rock and a hard place
The group of concerned doctors decided to take matters into their own hands. In December, some of them drove to Asheville for a behind-the-scenes meeting with the CEO of Mission, Ron Paulus. It was a renegade move, unauthorized by the rest of the medical community at large, but they liked what they heard.
So in early January, they called a meeting of all the doctors under WestCare and asked them to take a stand. Discussion dragged on for more than an hour.
Getting out of the MedWest partnership wasn’t an easy proposition. There was an escape clause built in at the three-year mark, but it could only be exercised by a three-fourths majority of the MedWest board, which was comprised equally of seven members each from WestCare — comprised of Harris and Swain hospitals — and Haywood Regional.
But, there was a little-known loophole. A clause in the MedWest contract allowed either side to pull out if the financial viability of one of the partners was at risk. It just so happened there was bad financial trouble brewing next door in Haywood. The Haywood hospital was running so low on cash, word on the street was it might not be able to make payroll.
To solve the short-term cash flow crunch, Haywood had gone up the chain to Carolinas for an emergency loan. Harris, however, was being asked to co-sign for the loan, putting its own revenue stream on the hook should Haywood default.
In realty, Harris would never be asked to cough up the money. Haywood’s revenue stream — about $100 million annually — along with all its equipment and its hospital building were also on the hook as collateral and would be tapped first before Harris would ever have to ante up. Essentially, there was more than $250 million guaranteeing a $10 million loan.
But, Carolinas was outside its comfort zone. This marked the first time it had ever loaned money to any of the 34 hospitals it manages. So it wanted the kitchen sink as collateral.
The Jackson doctors theorized the financial straits at Haywood were grave enough to exploit the loophole and engage in talks with Mission.
Little did the doctors know, however, that the WestCare board faced a grave choice — co-sign the loan to help bail out Haywood or comply with their own doctors’ request to meet with Mission. Doing both, it turned out, would not be an option. There was a catch to the loan with Carolinas. As long as MedWest owed Carolinas, the hospitals were prohibited from negotiating with a new partner.
Business-wise, it made sense. Carolinas didn’t want to prop up MedWest only to have it walk away still owing money. But to the unhappy physicians, it played out like a game of Mousetrap — and they were the ones sitting under the cage.
Harris board backs Carolinas
The WestCare board ultimately had faith in the MedWest venture and co-signed Haywood’s loan.
“We believe the future is bright for all three hospitals, even though the challenges are many. It is time to look forward, assuring the full potential of MedWest-Haywood, MedWest-Harris and MedWest-Swain is realized,” the MedWest board said in a statement this week. “Is this a short-term process? No, it is not. It will take months of hard work. But, we are confident in the expertise of our medical staffs and in the skill and dedication of all our employees.”
The doctors, however, felt ignored in their pleas to consider other options.
“We said ‘We aren’t telling you to dump Carolinas.’ We are just saying go talk to Mission and see if we made the best choice,” said Dr. Waverly Green, a pulmonologist at Harris. “Two days later, they signed documents that tied us up even tighter to Carolinas. That told me the board didn’t want input from the medical staff.”
One of the board members, Bob Carpenter, resigned from the board a few days later in a show of solidarity with the doctors.
“The bottom line is our hospital is in serious shape, and our trustees need to be looking at alternatives,” Carpenter said. “The community needs to keep pressure on the board to seek alternatives and do the right thing for this community.”
It turns out Harris was not merely hamstrung by Haywood’s loan. Harris was beholden to Carolinas for its own financial security as well. Carolinas had pulled strings to help Harris out of a pinch over an outstanding $15 million loan with BB&T, dating back to hospital construction projects a decade ago. Under terms of the loan, BB&T required Harris to have 75 days cash on hand.
Last year, Harris wasn’t able to maintain that balance and dipped below the cash-on-hand threshold that BB&T required. Carolinas tapped its relationships in banking circles, essentially putting in a good word for Harris, and convinced BB&T to temporarily relax its cash-on-hand requirement.
Harris currently has 56 days of cash-on-hand instead of the mandated 75. If Harris sent Carolinas packing, it could jeopardize the leniency BB&T had extended on the loan terms.
The door had been closed on any escape hatch Harris may have had, Savell said.
To be clear, the concerned doctors don’t believe in a conspiracy by Carolinas to make the hospitals financially dependent as a way of keeping MedWest intact. Adams thinks Carolinas just wasn’t paying close enough attention to the day-to-day operations, which after all is the expertise Carolinas was supposed to be providing in exchange for its management fee.
“They would never have allowed them to spend what they spent at Haywood without having the resources to back it up,” Adams said. “They would never have allowed Harris to be run in the ground even if that was a planned maneuver because it created a huge backlash. You don’t poison the components.”
John Young, a vice-president for Carolinas’ western hospitals, said that Carolinas doesn’t tell MedWest what to do — it’s the other way around.
“We work for the local boards. We have no control mechanism,” Young said.
A unique community of physicians
It’s rare to find physicians and hospital management in lockstep on everything. Now, however, the WestCare board must find a way to rebuild the fractured relationship with physicians.
“For every member of the medical staff that has talked to the board, to walk away feeling like nothing was going to be done was a difficult thing for us,” said Dr. Earl Haddock, a cardiologist at Harris.
It marked a departure from an amicable relationship the Jackson medical community had always had with its board of trustees.
“There was never any adversarial relationship. It was collaborative across the spectrum. We all worked together for the same goals. I think the thing that has been particularly uncomfortable for the medical community in these last two to three years is that relationship no longer applies,” Adams said.
A saying by a patriarch of the Harris medical community has been reverberating in Jackson County for nearly 40 years, handed down through practices and still preached to new recruits today.
“Sylva is where you can practice contemporary medicine in the old-fashioned style,” so the saying goes. It was coined by Bill Aldis, an internal medicine specialist who came to Harris in the mid-1970s.
Aldis was part of a dynamic trio of upstart internal medicine specialists who sought out Sylva after medical school as a place to make their mark, perhaps even a social experiment of sorts. Their mission: to take a rural hospital with a smattering of primary doctors and see how far they could take it.
“They were at John Hopkins together and decided they were going to find a place where they could make an impact,” said Dr. Joe Hurt, a retired pathologist who came to Harris in 1978. Hurt came partly because he was impressed by the three young internists who had thrown themselves headlong into building up a rural medical institution.
“There was a tremendous amount of potential,” Hurt said.
The energy was infectious. Each new specialist who came on board joined the recruiting crusade, putting their best foot forward as a medical community to build up their own ranks in partnership with the hospital.
“A lot of the recruiting parties and events were actually held at my house,” Hurt said. “Some of the contracts between partners were worked out at my house.”
In the decade from 1975 to 1985, the number of doctors practicing in Jackson County more than doubled, bringing in the county’s first orthopedists, pathologists, radiologists and surgeons. More by fate than design, the community attracted a certain breed of physician — those who didn’t care about the lack of a country club or golf course, Hurt said.
Those early efforts set Harris on a track that still persists.
“Harris has had a long-standing tradition of attracting very good physicians. Part of the attraction was for a small hospital, this had an exceptional medical staff. Well-trained physicians, very community-oriented. There was a rapport between the physicians and community that didn’t exist elsewhere. The hospital just had a very good reputation,” Green said.
All still support local hospital
There’s one thing both sides in the debate agree on: keep going to your local hospital.
“In terms of the services, we can and should provide in our local hospitals, we are as good as anyone in the country,” the MedWest board of directors said in a statement this week.
Undermining Harris is indeed the last thing those speaking out want to do.
“There are those who felt the community deserved to know. Hopefully, there will be enough of a outcry to have an impact,” Savell said.
But, the 2,000 employees of MedWest in Haywood, Jackson and Swain counties have surely felt the sting of the negative publicity during the past week.
“I care for every single patient with every ounce of my being,” said Heather Sheppard, a nurse at Harris and director of ICU. “I stand by the care that we deliver to every single patient at Harris.”
In Haywood County, a letter was signed by 29 doctors this week reinforcing their strength and resolve to provide excellent health care.
“We believe and have substantial data to corroborate that the care at Haywood hospital is, like the care at Harris hospital, something the community can take great pride in,” the letter states.
Dr. Joe Hurt, a retired pathologist at Harris, said going public was clearly a last resort for Adams after months of working through internal channels that got him nowhere.
“I don’t think any of them wished ill against the hospital,” said Hurt.
Savell agreed that’s not what this struggle is about.
“Good care is still there. Good people are still there,” Savell said.
Even those who have publicly stood beside Adams plan to stick with Harris to the end.
“I love what I do. I love the patients. I love the hospital, and by golly, we provide excellent care, and we want to get back to that,” Haddock added.