When facts don’t line up

Filed under: Opinion |

If the Citizens’ Commission on Ownership and Governance of Memorial Health System is supposed to be an objective body, then the recent sudden resignation of its chairman can only help.

Stephen Hyde would disagree, but both his actions and words left little doubt about his bent.

As the Business Journal’s Amy Gillentine reported last month, Hyde accepted an invitation to meet the representative of a company interested in buying Memorial. He eventually cancelled the appointment but only after pressure from other members of the commission.

He showed poor judgment in that instance and has since tried to deflect criticism by assailing this paper’s reporting of tensions within the board — tensions created by his leadership style. But Hyde’s resignation letter, which he submitted to Mayor Lionel Rivera on the week Amy’s story appeared on our cover, only affirmed his bias.

Here’s what he had to say:

“The commission has been charged with recommending what amounts to a half-billion dollar decision on the future of Memorial Health System in an era of increasing instability and unpredictability for the nation’s single-market community hospitals,” Hyde wrote.

“At stake are both major risks and significant opportunities for the city’s government, taxpayers, voters, health care consumers, and MHS itself. I congratulate City Council for the timeliness of its decision to establish the commission while MHS is still in a strong financial and competitive position.

“Other communities have not shown such foresight in addressing similar issues and have often failed to act before their options became far more limited than the ones still available to MHS and the city.”

Here’s my read of it:

Let’s start with “instability and unpredictability,” which makes me wonder what Hyde thinks he knows that we don’t.

As Gillentine reported in an earlier story in March, Memorial Health today is healthier than it has been in years.

The system is back in the black after a 2009 restructuring that allowed it to post more than $15 million in profit — money that was plowed back into the hospital. Its bottom line would have been even healthier, a bit north of $35 million, were it not for one-time refinancing expenses related to some of its debt.

That doesn’t sound like a hospital teetering on the brink to me.

OK, next, what about Hyde’s warning of “major risks” to voters?

In all of its years of operation, Memorial has never had to rely on any kind of city bailout, even in periods when it operated in the red. In other words, not a single penny from taxpayers has ever gone to help the hospital whose core mission is to tend to the least fortunate of us — whether we can pay for that care or not.

And, of course, Memorial just navigated through the worst economic downturn since the Depression without having to turn to outside help. The question this begs is: really, how big of a risk are we facing? Hardly any, I’d say.

Hyde also congratulates the council for establishing the commission while Memorial is “still” strong. That’s misleading on two counts.

First, it was Memorial itself that asked the council to set up the commission, mostly to settle once and for all the question of whether the hospital should stay in the city’s hands. Secondly, his phrasing hints at the notion that Memorial won’t remain strong, again as if he knows something the rest of us don’t. But he has no evidence to support his position. In fact, under the Obama health care reforms, Memorial will only grow stronger because it will finally be reimbursed for millions in care it provides to the uninsured.

Finally, consider Hyde’s comment applauding the city for examining its “options” before they become “far more limited.” Beyond a sale, the options that the commission is supposed to examine include holding onto the hospital, spinning it off as an independent entity or entering a joint management venture with an outside company.

There’s little stopping the city from fairly easily and quickly adopting any of those options. The health care landscape today is far more settled than it was just a few months ago and, as Amy has also reported, there’s no shortage of would-be suitors should the city move ahead with a sale.

Even in the depths of the recession, hospital mergers were commonplace.

In other words, there’s no rush to do anything.

Unfortunately, Hyde’s objectivity has been an issue all along. It surfaced as a question soon after he assumed the chairmanship of the commission when Amy reported the existence of a commentary Hyde had crafted years ago advocating the sale of Memorial.

Concerns mounted after Amy reported Hyde was planning to meet with that would-be suitor — the session that, remember, was canceled only after board members questioned its appropriateness.

There’s no doubt Hyde knows quite a lot about health care issues. He’s a former managed care company owner and is a longtime industry consultant. His insights were no doubt useful. But he violated one of the cardinal rules of board leadership — allowing his actions to suggest he had agenda before the commission had barely begun its work. His last official act, sending the mayor his resignation letter, left little doubt about his disposition.

Now that he’s gone, perhaps the commission can get back to doing what it’s supposed to do.

Allen Greenberg is the editor of the Business Journal. Reach him at 719-329-5206 or allen.greenberg@csbj.com.

One Response to When facts don’t line up

  1. UPDATE: Memorial Health System won a national award for its efforts to turn around its financial picture in the past three years.

    Thomson Reuters gave Memorial the Healthcare Advantage Award for reducing its spending on wages and benefits by more than $35 million during a three-year period.

    The hospital was faced with a loss of nearly $32 million after the auction rate bond market tanked in 2008. Shortly thereafter, a new leadership team arrived and launched a series of initiatives to make Memorial’s operations more productive. The hospital system ended 2009 with a profit of $15.7 million, after a one-time payment of $22 million to restructure its debt.

    Memorial plows its exceess revenues into care for local patients.

    Allen Greenberg
    May 21, 2010 at 4:08 pm