FAQs

Learn more about Mission Health’s decision to join HCA Healthcare and the benefits it holds for our people, patients and communities.

Top Questions

Mission Health’s Board continually explores what is best for Mission Health and the health and well-being of the residents of western North Carolina. In that context, the Board has reviewed whether remaining independent is in the best interests of the community every year or so for the past eight years. Government, businesses and payors are demanding that healthcare providers assume more risk and continually reduce costs.  As a result, healthcare mergers and acquisitions are taking place across our country and our state at an unprecedented pace and that pace is likely to accelerate even further.

The Mission Board, all of whom are community members who care deeply about ensuring access to high quality care for the people of western North Carolina for generations to come, knew that it was essential that we act from a position of strength to shape our desired future. Given the inevitability of consolidation, we wanted it to be our choice long before we are forced to make one. After a careful and thorough search, the Board is assured that HCA Healthcare is right for our team, patients and communities. It’s from this position of strength that we are able to ensure that our selected choice is as invested as we are in our mission, people, patients, providers and communities.

HCA Healthcare intends to grow here in western North Carolina by investing in increased access to care, expansion of existing and new services and supporting our communities with the creation of a very significant foundation, which would be administered by people in our communities for the people who live in our communities. With tens of millions of dollars to invest annually, the foundation’s potential is life-changing.  The Board was also impressed with HCA Healthcare’s nine consecutive years of being designated as one of the “World’s Most Ethical Companies” by the global leader in advancing the standards of ethical business practices, the Ethisphere Institute.

The decision was most certainly shared with the community on March 21, 2018.  As the community governing body, the Board has both the legal and fiduciary responsibility to thoroughly deliberate, vet and approve courses of action they believe to be in the best interest of the communities Mission Health serves.  The Board adhered to these responsibilities when considering, approving and then communicating its decision to explore joining HCA Healthcare.

It’s important to note that each Board member is also a community member, volunteering his or her time because they care deeply about ensuring access to high quality care for the people of western North Carolina for generations to come. It’s their commitment to their community that governs all of their decision-making.

To learn more about the Mission Health Board’s decision, please click here to read Mission’s Board Made a Complex – but ultimately right – decision.

Mission Health’s Board and management are always exploring what is best for Mission health and wellbeing of the residents of western North Carolina and have had discussions with other health systems within North Carolina and beyond. That is the key fiduciary duty of the local community Health Board of Directors and who govern Mission Health; it is a continuous process.

Because of Mission Health’s extraordinary track record of delivering high quality, compassionate care, its national recognition and superb financial performance and associated bond rating, Mission Health was very fortunate to have numerous choices for a partnership.

The primary criteria for ultimately selecting a partner were: the ability to build upon and extend our core mission: to improve the health of the people of western North Carolina and the surrounding region, which potential partner would bring the most benefit to Mission Health and western North Carolina, and who could build upon our century-long history of high quality, compassionate care.  After a careful and thorough search, Mission Health’s Board is assured that HCA patients and communities. Importantly, HCA Healthcare does not currently have any op means they plan to use Mission Health as a platform for expansion and there are no current concerns of market concentration or overlap.

Our top three greatest concerns are just one: the unsustainability of providing healthcare in an environment where the costs of care continue to rise (prices of drugs, medical supplies, wages and benefits, etc.), but payors and the government are unwilling to share their portion of the responsibility and instead continually asking health systems to do more with less.  While the environment is not going to change, our potential transaction with HCA Healthcare will change our ability to manage in that environment.  Mission Health will be far better positioned to withstand these external factors as part of HCA Healthcare than on our own.

HCA Healthcare has unique scale benefits and broader capabilities that are difficult, if not impossible, to match.  Understanding the unique, special needs of our patients, particularly those in remote and rural areas, we look forward to the possibility of expanding access and accelerating improvements while gaining efficiencies.

A key component of this agreement, should it be finalized, will be the creation of the Dogwood Health Trust.  While the final details still need to be worked out, its assets will be focused on the people who live in our communities.  With the potential of tens of millions of dollars or more available every year to improve the health of the residents of western North Carolina and beyond, Dogwood Health Trust will be nothing short of transformational.  That’s great news for our patients and communities!

 

HCA Healthcare intends to use Mission Health as its platform for growth and expansion across the region.  They plan to invest and grow here so, importantly, we do expect new jobs and new opportunities to be created – particularly for clinical staff.  Fundamental to HCA Healthcare’s philosophy is to provide the support and resources needed for local leaders, service providers and clinicians to best meet the needs of their patients, with the same high-quality care they have come to expect and deserve.

HCA Healthcare has a proven track-record of making meaningful investments in its communities – not just for its healthcare operations, but beyond.  In addition, HCA Healthcare will pay local and state property, sales, use and other taxes that will support our local community governments.

A key component of this agreement, should it be finalized, will be the creation of the Dogwood Health Trust.  The Dogwood Health Trust, a conversion foundation, will be the successor of the not-for-profit Mission Health System.  Dogwood Health Trust’s sole purpose will be to dramatically improve the health and well-being of all people and communities of western North Carolina.  With the potential of tens of millions of dollars or more available every year for improving the health of the residents of western North Carolina and beyond, Dogwood Health Trust will be nothing short of transformational.

Our goal in pursuing joining HCA Healthcare is to be an even stronger organization going forward than we would be alone.  While some positions will likely change or be eliminated over time due to changes in market demand as they have been for years, we do not anticipate significant changes beyond what we typically experience or that otherwise would be required as we evolved and expanded our organization alone, without an HCA Healthcare relationship.  Additionally, HCA Healthcare plans to invest and grow here so, importantly, we do expect new jobs and new opportunities to be created – particularly for clinical staff.

HCA Healthcare was founded 50 years ago by two physicians in Nashville, Tennessee.  It is one of the nation’s most respected healthcare providers, operating 177 locally managed hospitals and 119 surgery centers located in 20 states and in the United Kingdom.  HCA Healthcare does not presently have any operations in North Carolina.  HCA Healthcare is committed to the care and improvement of human life and shares our deeply held commitment to our people, patients and communities.  HCA Healthcare offers hundreds of clinical trials each year as part of its commitment to advancing medicine and, for the past nine years, HCA Healthcare has been named one of the “World’s Most Ethical Companies.” You can learn more about HCA Healthcare here.

HCA Healthcare is attracted to Mission Health for many reasons, including the reputation of Mission Health clinicians and broader team to deliver best-in-class care and patient outcomes and our shared commitment to innovation.  Mission joining HCA Healthcare would also be HCA Healthcare’s entry into North Carolina allowing for additional growth opportunities.

As Mission Health continues to move through this process, we pledge to be as transparent as possible and share information in a timely manner. That is why we created this website dedicated to keeping our patients, team members and communities informed. We encourage you to visit www.MissionHealthForward.org regularly and also to visit DogwoodHealthTrust.org to learn more and stay up to date on its progress.

Dogwood Health Trust Questions

The board has been meeting. Its meetings are not open to the public.

Yes, the Mission Board chose the first six members.  The Dogwood Board has chosen and will choose all other members.

We don’t understand the question, because the successor foundation is absolutely not being organized without community input.  Regardless, we do completely agree with the critical need for community input. That’s why we have established so many different ways for the community to engage.

You seem to be asking why organizing the specific structure and leadership of the Foundation is the responsibility of the Mission Health Board.  Only the Mission Health Board has the legal authority and fiduciary responsibility to make those decisions on behalf of the community.  It’s always important to note that each Mission Health Board member is a local member of our community. Each volunteers his or her time because they care deeply about our community and that commitment governs all of their decision-making.  Board members receive no pay or other financial benefit for their service.  It is a labor of love.

Finally, the opportunity for input and suggestions will continue for a very long time.  The activity associated with creating and later operating the new foundation will be a deliberate, multi-year process.  The foundation is far too important to western North Carolina to be developed without thoughtful consideration, education about other conversion foundations, necessary approvals for operation and more. It will take time to develop the staff and infra-structure required for the foundation.  Further, carefully assessing the strengths and the needs of all communities within our region to discern how the foundation may help each community in the most impactful and sensitive manner will also take considerable time.  Eventually and continuously, the foundation will prioritize funding needs based upon local community input and guidance, identify strategies to address each community’s needs and seeking partnerships with other non-profits and community members to do so.  There is considerable time for that work because funding of approved initiatives is likely to begin no earlier than 2020.

Absolutely we have done that and will continue to do so!  We understand well the critical need for community input, which is why we have established so many different ways for the community to engage, comment, question, suggest and ask.

We knew this would be a lengthy process and we wanted to be thoughtful about how we engaged the community in a diverse and repetitive manner so that everyone could provide input.  To continually gather insights and opinions from across the region, we’re employing several best practices to ensure that anyone and everyone has the opportunity to provide feedback.

Research shows that social media and online engagement ensures that a majority of the community can provide input and ask questions.  Not everyone likes to speak up at public meetings, can easily attend or fits into the group of powerful people who will always have their say.  As a result, we developed a communication and feedback plan that incorporates everyone into the model.

For example:

  • We have hosted four Facebook Live discussions that have reached over 175,000 people and counting.
  • Evidence shows that these discussions are the most reliable, diverse and interactive way to ensure that everyone and anyone from across the region – and beyond – can ask questions, share opinions and suggestions, engage, and become more informed.
  • Consider these statistics: According to Journalism.org, “In the U.S., roughly nine-in-ten adults (93%) get at least some news online (either via mobile or desktop).” Also, according to a December 2017 study by eMarketer, “Facebook is by far the most popular social media platform for researching, influence and buying.”
  • Also, this MissionHealthForward.org website has been viewed more than 36,000 times. All questions that were asked have been answered and posted for everyone to see. In addition to the questions and answers, we have posted the Facebook Live recordings, foundation research, our Mountains of Hope video, related articles and white papers, a graphic illustrating the steps to an agreement, fact sheets, and news articles.
  • More traditionally, Dr. Paulus and members of his leadership team have met personally with more than 375 local elected leaders and more than 400 community leaders (including clergy, non-profit agencies, business heads and others).  Elected leaders are, by definition, those entrusted by our citizens to ensure their interests. We trust that our elected officials and community leaders are then sharing this information with their constituents.
  • We’ve provided continued and significant information to the local, regional and national media, all of whom have an important role to inform all citizens.
  • Beyond our direct media engagement, the media also has covered meetings we’ve held with elected officials and business leaders and we’ve answered letters sent to the editors of our region’s newspapers.

At this point in the process, it should be obvious that this potential transaction is anything but an overnight process.  As always, to access the most accurate and up to date information, we invite our community to frequently visit this website that is dedicated to keeping our patients, team members and communities informed: www.MissionHealthForward.org. Anyone and everyone is encouraged to share comments and suggestions and submit questions. Every question is answered and posted for everyone to see.

We have said from the initial announcement that we believed that the deal was likely to be consummated, but not certain. We are operating with the intent that it will, but until such time as definitive agreements are signed and approved by the Attorney General, it remains tentative.  Defining the initial structure of the Dogwood Health Trustis an important step in achieving ultimate approval of the transaction, and even more, in dramatically improving the health and well-being of all people and communities of western North Carolina.

If and when the sale of Mission Health to HCA Healthcare is consummated, the sale proceeds will be combined with Mission Health’s cash and investments (not the cash or investments from any foundation).  From that amount, Mission Health will pay off all outstanding debt and there will be what’s called a “working capital adjustment” to ensure a neutral transfer of Mission Health assets to HCA.  Whatever remains will go into the Dogwood Health Trust.  The graphic below does a good job of illustrating this.

While many details remain to be determined, a good rule of thumb is that approximately 5% of a foundation’s assets are spent yearly in support of its mission.  It’s anticipated that would result in many tens of millions invested annually.  The potential impact of the Dogwood Health Trustwill be transformational for our region since it will provide significant resources to address the root causes of poor health status.  There is no specific approach defined at this time with respect to “large” or “small” projects, just an emphasis on impact.

Dogwood Health Trust’s Board will prioritize the community’s needs without regard to any relationship with HCA Healthcare.  It will identify collaborative strategies to address them, and seek partnerships with others to implement its long-range strategic plan.  Dogwood Health Trust’s goal is to partner with local communities to produce a dramatic, positive, long-term impact on the health and well-being of the people of western North Carolina.  Dogwood Health Trust will be completely separate from HCA Healthcare and from Mission Health.  Additionally, it will not be controlled or influenced by HCA Healthcare.

Research shows that only 10% to 20% of an individual’s health status is driven by medical services.  Another 20% to 30% of health status is influenced by genetics. Another 20% to 30% is driven by behavioral and lifestyle choices, meaning what you eat and drink, whether you smoke, whether you wear your seatbelt, whether you get basic screenings, etc.  What remains, whether it’s 30%, 40% or even more, can be attributed to social determinants. Many tend not to appreciate the role that social determinants have in influencing health status, but in reality, they’re the essence of health and well-being.  For instance: whether one has a home, a job, good food and needed transportation each have a major impact on health.  Beyond that, we now know clinically that people who live with significant stress for long periods of time have actual and detrimental changes to their DNA.

Dogwood Health Trust’s mission is to dramatically improve the health and well-being of all people and communities of Western North Carolina.  Accordingly, it will focus its efforts on analyzing, understanding and addressing the core social determinants of health and well-being to address the root causes of poor health status.  Funding might include things like affordable housing, enhanced education, transportation, healthy food, job creation, early childhood intervention models and much more.

Research shows that only 10% to 20% of an individual’s health status is driven by medical services.  Another 20% to 30% of health status is influenced by genetics. Another 20% to 30% is driven by behavioral and lifestyle choices, meaning what you eat and drink, whether you smoke, whether you wear your seatbelt, whether you get basic screenings, etc.  What remains, whether it’s 30%, 40% or even more, can be attributed to social determinants. Many tend not to appreciate the role that social determinants have in influencing health status, but in reality, they’re the essence of health and well-being.  For instance: whether one has a home, a job, good food and needed transportation each have a major impact on health.  Beyond that, we now know clinically that people who live with significant stress for long periods of time have actual and detrimental changes to their DNA.

Dogwood Health Trust’s mission is to dramatically improve the health and well-being of all people and communities of Western North Carolina.  Accordingly, it will focus its efforts on analyzing, understanding and addressing the core social determinants of health and well-being to address the root causes of poor health status.  Funding might include things like affordable housing, enhanced education, transportation, healthy food, job creation, early childhood intervention models and much more.

Dogwood Health Trustwill be self-perpetuating, meaning that it will use the investment returns from the initial funding to make grants, expected to be many tens of millions of dollars yearly to dramatically improve the health and well-being of the residents of western North Carolina.  That doesn’t mean that it would never raise funds, but it has no requirement to do so.

Dogwood Health Trustwill have board members broadly from western NC focused on skills, expertise, life experience and more.  Geographic diversity is one very important characteristic, but not the only one.  Most importantly, Board members must have a firm commitment to the Dogwood Health Trust’s bold mission to dramatically improve the health and wellbeing of all people and communities in Western North Carolina and understand they do not serve on behalf of any particular geography, but rather as a fiduciary steward to ensure that Dogwood’s mission is achieved for everyone in every community across this region.

That said, there is a natural limit to the ability to have “all counties represented.”  Best practice board size is typically in the 11-13 range; given that there are 18 counties in western North Carolina, it is not realistic to believe that every county will have a director on the foundation board.  Rather, all three regions (East, Central and West) will be thoughtfully reflected on the board and there will be numerous other mechanisms to ensure front-line input from all communities (and by extension, all counties).  The board, even when taken as a whole, could not possibly “represent” or fully appreciate the many nuances associated with each community.  Ensuring that understanding will take a systematic, concerted and continuous engagement with each community.

While it’s understandable that there are concerns from anyone who faces change or uncertainty, the truth is that every entity within Mission Health will have very significant protections that it lacks today under the contemplated transaction with HCA Healthcare.  Those safeguards include protections against both program and facility closures.  In addition, the mission of the Dogwood Health Trust will be to dramatically improve the health and well-being of all people and communities of Western North Carolina. To that end, its focus will be to analyze, understand and address core social determinants of health and well-being.  Funding could be used to meet healthcare needs, but also for housing, education, transportation, healthy food and much more.

Savannah Memorial Hospital and Mission Health are very, very different organizations so it’s not surprising that the terms of each agreement would be quite different.  As part of the Mission Health transaction, the new Foundation will receive all of the proceeds Healthcare and it will not fund capital improvements for HCA; HCA’s capital commitments are above and beyond its purchase price.

The newly formed Foundation will not be controlled or influenced by HCA.  A governing board will be created by the current Mission Health Board of Directors, and the new Foundation will be focused exclusively on the current mission of Mission Health: to improve the health of the citizens of western North Carolina and the surrounding region.

The Foundation proceeds will be determined by the ultimate purchase price paid, and any remaining balances within Mission Health after retiring all outstanding debt, payables and adjustments for working capital.  It is those total proceeds that will be used to improve the health of the people in western North Carolina and the surrounding region.  Funding could be used to meet healthcare needs, but also for social determinants of health including: food programs, housing, education, transportation and more.

Dogwood Health Trust not be controlled or influenced by HCA Healthcare; rather, it will be focused on the current mission of Mission Health: to improve the health of the citizens of western North Carolina and the surrounding region.

Yes, there is an enforcement role that is part of the new Foundation that will be created to oversee and manage the proceeds from the contemplated transaction with HCA Healthcare.  HCA Healthcare will be making significant contractual commitments to operate in certain ways and with certain obligations.  Dogwood Health Trust, in addition to its transformational role in improving the health of the people of western North Carolina and the surrounding region, will also be the entity charged with enforcing those contractual obligations, should there ever be a need to do so.

More generally, joining HCA Healthcare would not change how Mission approaches patient care. All hospitals are required to meet many of the same federal and state requirements and are held to the same quality and patient safety standards.  Both for-profit and non-profit hospitals provide charity care.  Click Here for a quick comparison of for-profit and not-for-profit hospitals.

Also of interest, is a study by the Harvard School of Public Health that determined that switching from non-profit to for-profit status appears to boost hospitals’ financial health but does not appear to lower the quality of care they provide or reduce the proportion of poor or minority patients receiving care. Click here for the link.

Thank you for your excellent questions.  First, none of the existing Foundations within the Mission Health system are part of the contemplated transaction with HCA Healthcare.  Those foundations will remain intact.

Second, the Dogwood Health Trust, contemplated as part of this transaction, will receive all of the proceeds from the transaction.  Those proceeds will be determined by the ultimate purchase price paid, and any remaining balances within Mission Health after retiring all outstanding debt, payables and adjustments for working capital.  It is those total proceeds that will be used to improve the health of the people in western North Carolina and the surrounding region.  While many details remain to be determined, including the specific structure of the newly created Dogwood Health Trust, a rule of thumb might be that 5% of foundations assets are spent yearly in support of its mission.

HCA Healthcare Questions

When considering a transaction with HCA Healthcare, Mission has looked at the company as a whole as it is today – the quality of its services, the caliber of its people, the scale of its operations and the values it strives to live by.  HCA Healthcare has been recognized for nine consecutive years as one of the Ethisphere Institute’s “World’s Most Ethical Companies.

We also know that any company of the scale and scope of HCA Healthcare operating in an industry that is highly regulated as the healthcare industry is will have issues from time to time.

We are very comfortable with what we know at this time about HCA Healthcare on all of these fronts.

The Columbia challenges are from more than twenty years ago and before the 1997 return of HCA Healthcare’s founder as Chairman and CEO. HCA Healthcare is a different company now and celebrates nine consecutive years as one of the “World’s Most Ethical Companies” as designated by Ethisphere, the global leader in advancing the standards of ethical business practices.

The Columbia challenges are from more than twenty years ago and before the 1997 return of HCA Healthcare’s founder as Chairman and CEO. HCA Healthcare is a different company now and celebrates nine consecutive years as one of the “World’s Most Ethical Companies” as designated by Ethisphere, the global leader in advancing the standards of ethical business practices.

While HCA has a process for determining appropriate charges that is based on the cost of providing care in a particular community, the broader industry issue of hospital charges and patient billing can be confusing.  What is important to remember is that the amount patients actually pay for hospital services has more to do with the type of insurance coverage they have than the amounts listed on a hospital’s chargemaster.  Government programs like Medicare and Medicaid determine how much they reimburse hospitals, and commercial insurance plans negotiate rates.

Uninsured patients are eligible for free care through HCA’s generous charity care program or receive uninsured discounts, which are similar to those a commercial insurance plan receives.

Mission Health’s designation as an IBM Watson Health Top 15 Health System is one of the many reasons HCA Healthcare is excited about this partnership. HCA Healthcare has had numerous hospitals designated Top 100 Hospitals by IBM Watson Health over the years, including three hospitals receiving that designation in 2018 – West Valley Medical Center, ID; St. David’s Medical Center, TX; and Lakeview Hospital, UT.

Further, 106 of HCA Healthcare’s 178 hospitals are ranked as Joint Commission Top Performers on Key Quality Metrics, and 10 of the hospitals are Magnet designated for providing the highest quality of patient care, nursing excellence, and innovations in professional nursing practice.

HCA Healthcare currently operates 20 hospitals in communities that can be considered rural. Seven of those hospitals are Critical Access Hospitals and are similar to Mission Health’s five rural hospitals.

**Lafayette Regional Health Center, LEXINGTON, MISSOURI

**TriStar Ashland City Medical Center, ASHLAND CITY, TENNESSEE

*Allen County Regional Hospital, IOLA, KANSAS

*Carroll County Memorial, CARROLLTON, KENTUCKY

*Cass Regional Medical Ctr., HARRISONVILLE, MISSOURI

*Medina Community Hospital, HONDO, TEXAS

*Frio Regional Hospital, PEARSALL, TEXAS

Val Verde Regional Medical Center, DEL RIO, TEXAS

Cuero Regional Hospital, CUERO, TEXAS

Parkridge West Hospital, JASPER, TENNESSEE           

Methodist Hospital South, JOURDANTON, TEXAS               

LewisGale Hospital Alleghany, LOW MOOR, VIRGINIA

Brigham City Community Hospital, BRIGHAM CITY, UTAH

Fairview Park Hospital, DUBLIN, GEORGIA

Memorial Satilla Health, WAYCROSS, GEORGIA

Putnam Community Medical Center, PALATKA, FLORIDA

Lake City Medical Center, LAKE CITY, FLORIDA

LewisGale Hospital Montgomery, BLACKSBURG, VIRGINIA

LewisGale Hospital Pulaski, PULASKI, VIRGINIA

Mountain View Hospital, PAYSON, UTAH

**Critical Access Hospital – HCA Healthcare Owned

*Critical Access Hospital – HCA Healthcare Operated

Yes, HCA Healthcare hospitals provide charity care at all of their locations.  In addition, HCA Healthcare led the way for the hospital industry by being the first to provide a discount to uninsured patients who do not qualify for Medicaid or charity care. HCA Healthcare has one of the most generous charity care policies in the industry, even more generous than Mission Health. HCA Healthcare provides charity care to those below 200% of the Federal Poverty Guidelines and a sliding scale discount with an out-of-pocket cap for those between 200% and 400% of the Federal Poverty Guidelines.  Additionally, HCA Healthcare has interest free payment arrangements. To best serve patients, HCA Healthcare has experienced financial counselors available to provide estimates prior to receiving care and to answer billing questions following care.  HCA Healthcare provided charity care, uninsured discounts and other uncompensated care at a cost of more than $3 billion in 2017.

It is too soon to know how Mission Health and HCA Healthcare will grow in our region.

While HCA Healthcare will always evaluate opportunities to expand their presence within communities they serve, our focus now is to work together on the Mission Health partnership and to finalize our proposed transaction by year end.

Non-Profit vs. For-Profit Questions

Thank you for your question about whether Mission Health will become a for-profit company if it joins HCA Healthcare. The answer is yes. However, there are far more similarities than there are differences, and joining HCA Healthcare would not change how Mission approaches patient care.  Fundamentally, all hospitals are obligated to meet the same federal and state requirements and are held to the same quality and patient safety standards.  Both for-profit and non-profit hospitals provide charity care.  A key difference is that as a for-profit organization, Mission would pay taxes, which would benefit our communities.  Click here for a quick comparison of for-profit and not-for-profit hospitals.

During the due diligence period the grants staff in the Department of Philanthropy are identifying potential partners on currently grant-funded programs where, if the partnership with HCA is finalized, grant awards could be transitioned to support and continue Mission Health’s programmatic activities and deliverables required by the funder in the grant agreement.  Also, if the transaction is ultimately consummated, Mission Health will create a very large Foundation focused on the current mission of Mission Health: to improve the health of the citizens of western North Carolina and the surrounding region.  That new Foundation therefore would have similar interests to the current grant work underway.

Tax benefits will apply anywhere that Mission Health owns property or provides taxable services. We don’t yet have an estimate of the potential impact locally.

Joining HCA Healthcare would not change how Mission approaches patient care or treatment of the uninsured in any way, and Mission’s charity care would absolutely continue under HCA Healthcare.  HCA Healthcare has committed to continuing a generous charity care policy, and elimination of charity care programs is inconsistent with their mission and the Hippocratic Oath sworn by its founding physicians.

Also, whether a hospital operates as a non-profit or a for-profit, its legal requirements to serve the poor and uninsured are essentially the same.  Federal law protects patients who are in need of emergent care, and it is illegal to require up-front payments for that care.  Regardless of status, all hospitals are obligated to meet the same federal and state requirements and are held to the same quality and patient safety standards.

Additionally, a report by Harvard School of Public Health confirmed that not-for-profit hospitals and health systems switching to for-profit status maintained their level of care for poor patients or at-risk populations

Employment Questions

Our goal in pursuing joining HCA Healthcare is to be an even stronger organization going forward than we would be alone.  While some positions will likely change or be eliminated over time due to changes in market demand as they have been for years, we do not anticipate significant changes, but beyond what we typically experience or that would be required as we evolved and expanded our organization alone, without an HCA Healthcare relationship.  Additionally, HCA Healthcare plans to invest and grow here so, importantly, we do expect new jobs and new opportunities to be created – particularly for clinical staff.

While we are still early in the process, it is HCA Healthcare’s desire to retain current management. Current management is one of the many reasons that HCA Healthcare is interested in Mission Health. It is anticipated that Mission Health would remain as an independent division of HCA Healthcare with current management operating the division and overseen by HCA Healthcare. As is true with every topic, all decisions are subject to due diligence on both sides and the choice of individuals in management.

We don’t expect that clinical (or other) staff will need to reapply for their positions.  Another orientation will not be required, but HCA will have employee communication meetings. A final decision on whether employees will have to do a pre-employment onboarding drug screen hasn’t been decided yet.

HCA Healthcare has benefits that are very comparable to ours and any retirement contributions you have made are and will be safe.  In fact, the existing 403B plan will roll over directly into a HCA 401K plan on the same terms and conditions.  Additionally, Mission Health team members will be able to carry forward up to 200 hours of PTO. This is not the PTO “ceiling,” but represents the amount of Mission PTO team members can carry forward upon joining HCA.  Mission’s PTO policy will remain the same for the first year, including ceiling and accrual rates.

More than half of HCA hospitals insource this function, and the rest is outsourced.

Although we do not have every detail yet, we do know that generally HCA Healthcare offers education benefits that are very comparable to ours.  It goes without saying that it would be impossible for every benefit to be identical, but on average, we expect things to be quite similar.  We’ll know more as our conversations continue over the next several months. As we have new updates and information, all impacted individuals will receive updated information.

We agree that Phased Retirement is an effective and popular program.  Phased Retirement benefits will still be honored when our employees move from Mission Health to HCA.

Unfortunately, we do not have these types of details finalized at this point.  Since we haven’t completed due diligence, it is still too soon to have the answers to these types of questions.  What we can tell you is that we are thoughtfully working through every detail, that HCA Healthcare has benefits comparable to ours, and that we’ll know more as our conversations continue over the next several months.

Since we haven’t completed due diligence, it is too soon to know the employment impact for people working in dietary or any other area of Mission Health.  We’ll know more as our conversations continue over the next several months.

The overwhelming majority of team members will be continuing with the organization as part of HCA, and will keep the same (or very similar) position with the same salary and title they now have for at least 12 months after close.  After this initial 12 months, there may be some changes reflecting the integration process with HCA, but the majority of our team members will not be impacted by these changes.  This process is no different from what we have been doing for the past several years as we have become more efficient and effective in our work.

In many areas, no changes will be called for, while other areas will experience significant changes. Some of those changes will happen quickly, while others will happen over months or longer. To manage this process, we will be working with HCA to create a transition plan.

We understand that times of great change can be difficult, and that unknowns can add to that stress. We have received many questions related to the integration process (e.g., what roles will be outsourced, what functions might be centralized versus decentralized, how will we be structured, and others). Those questions and more will be addressed as we move through the integration process.

Since due diligence is still underway, those details are not yet finalized. What we can tell you is that HCA Healthcare has benefits comparable to Mission Health, and that we’ll know more as our conversations continue over the next several months.

Mission will not convert to HCA benefits for at least the 2019 health plan year.  We will have open enrollment this fall, just like we have done in the past.

HCA Healthcare has a wide variety of risk-bearing experiments in different markets, including one-sided and two-sided Accountable Care Organization models and more.  While it is still too early in the process to have worked through these types of details, we know that they have interest in our success in both entities, and we’ll know more as our conversations continue over the next several months. As we have new updates and information, it will be posted to MissionHealthForward.org.

It is still too early in the process to have worked through this level of detail.  We’ll know more as our conversations continue over the next several months. As we have new updates and information, it will be posted to MissionHealthForward.org.

The StandOut program will be retained for at least two years following the close of the proposed transaction.  As with any organization, our culture has evolved over time and will continue to evolve, whether or not Mission Health ultimately joins HCA Healthcare.  What won’t change is our commitment to our community, team members and core values.

It is still too early in the process to have worked through these types of details.  We’ll know more as our conversations continue over the next several months. As we have new updates and information, it will be posted to MissionHealthForward.org.

Physician and Clinical Questions

The letter of intent, subject to due diligence, envisions a 3-year transition from Mission Medical Associates to HCA Healthcare’s employed physician group.

Mission Health will always operate in accordance with the terms and conditions of its existing contracts. As we have new updates and information, it will be posted to MissionHealthForward.org.

HCA Healthcare has agreed to assume all existing contracts held by Mission Health, including our important PSA contracts.  In general, we will continue our routine work schedule.

We don’t expect any changes for private practice primary care physicians.  In general, although HCA Healthcare has been expanding its employed physician group in recent years as has Mission Health and most every health system nationwide, the overwhelming majority of physicians associated with HCA are private practice physicians.

As we’ve stated previously in numerous settings, all of Mission Health, including but not limited to its ambulatory clinics, would become part of HCA Healthcare if the sale of Mission Health to HCA Healthcare is consummated.  Additionally, every component of Mission Health will continue to operate under their current names.

HCA Healthcare has numerous examples of population health activities, care coordination platforms and markets focused on primary care.  Its practices and 1000+ primary care physicians are providers in Medicare and Commercial accountable care organizations, comprehensive primary care plus practices, Medicare Advantage and shared savings programs, and clinically integrated networks.

With respect to HCA’s intentions regarding supporting nurse staffing it is too soon to say.  But your question is important and there is a lot of information that we can share about current efforts.

Nurse staffing is a national challenge and Mission Health is not immune to the background trends identified in the Institute of Medicine report on nursing and the Advisory Board.  The aged and aging population in our area coupled with a high number of nurses in the United States and at Mission nearing retirement age, adds to the complexity of an already tight labor market.  Further, Buncombe County has the lowest unemployment rate in the state and one of the lowest in the nation.  The hospitality and service industry in our region also results in an extremely competitive market for CNAs, EVS, and food and nutrition compared to other areas of the nation.

Because of the crucial role that nurses have in caring for our patients, recruitment and retention are top priorities for Mission Health.  We regularly compare our nursing hours against the National Database of Nursing Quality Indicators(NDNQI).  While it is true that issues likely family medical leave (FMLA), vacation and other factors can contribute to staffing challenges on a given nursing unit, for the first quarter of 2018, Mission was at the mean for total nursing hours provided (employee + agency) against hospitals of like size.  Even with our challenges, at the end of May Mission Health RN turnover was 12.4%; Mission Hospital RN turnover was 11.9%, both below the Advisory Board 50thpercentile of 15.1%.  EVS turnover at Mission Hospital as of May was 29%, with nationwide trends ranging from 30-50% depending on the source and location.

From our candidate and employee feedback we know that the most important reason for joining Mission (and remaining with us) is our reputation for outstanding and compassionate care for patients and each other.  Below are a few of our best practice strategies in place:

  • We routinely evaluate and adjust our compensation strategy, which includes merit, market, and off-cycle adjustments.  Mission is very competitive with our competition nation-wide and the night shift differential was adjusted upward within the last year.
  • We have an on-site CNA classroom and lab which prepares candidates for our positions routinely.  CNA scholarships are provided to our employees, children and family members of our employees, and to the community.
  • 87 new RN graduates have been hired and began this month.  We continue to hire over 80 to 90 new graduates every year.
  • In addition to hiring 38 CNAs this month alone, we host regular CNA, EVS and Food and Nutrition “hiring blitzes” with same day offers. We also have partnerships with Green Opportunities and other community agencies to fill these positons.
  • CNAs and nursing students are being hired into our staffing pool to more effectively cover vacations, vacancies, high census needs and FMLA absences.
  • In addition to recruiting at nursing conferences nationally, we have held highly successful virtual job fairs, Facebook Live events and other campaigns. Special recruitment videos have been created and shared to emphasize the quality of our team members and there is a high utilization of social media engagement.
  • We have strong relationships with nursing programs throughout the Southeast, and continue to build our pipeline. Mission also hosts clinical rotations for nursing and other clinical specialties.  Additionally, we have a strong internship program, which also includes nursing and clinical experiences.
  • We have utilized sign-on bonuses, employee referral bonuses, and relocation assistance to increase our recruitment of top talent.
  • Traveling nurses have, and are, being utilized for support of units while searching for permanent candidates.
  • Mission provides roughly one million dollars per year in tuition reimbursement, and has invested in a Career Exploration Center.  HCA has just instituted more enhanced tuition reimbursement for RN growth and development, and is highly interested in Mission’s Career Exploration Center.
  • All nurses are encouraged to participate in our professional governance model, NDNQI RN satisfaction survey, clinical ladder, our mentor program, preceptor program, leadership development, and other growth opportunities.
  • To more effectively retain our nurses and other team members, we have invested heavily in our Great Place to Work and Practice strategy providing resources to support and build resilience in our team members.
  • Stay interviews are being conducted routinely.
  • To retain our employees we have several recognition opportunities, such as WooHoo, Daisy Awards, NC Great 100 Nurse awards, CNA Compassion in Action awards, Leadership Awards, Annual Quality awards and more.
  • Ongoing data reviews are conducted to identify areas where specific and additional strategies for recruitment and retention are needed.

As always we welcome partnership, ideas and suggestions from our team members as we work together to ensure an environment that welcomes and retains top talent.

HCA Healthcare has agreed to assume all existing contracts held by Mission Health, including our important contracts with MAHEC.  They are aware of the very important role that MAHEC provides within Mission and across western North Carolina, and are eager to learn more about potential opportunities. As we have new updates and information, it will be posted to MissionHealthForward.org.

We certainly understand and share your concern about the potential impact on student loans. While we are sensitive to any potentially impacted individual’s concern, please bear in mind that this is a federal program and not a benefit that is provided by Mission.  The program itself has only existed since 2007, with an enhancement by the Obama administration in 2010.

Currently, the program is dramatically under-funded which puts its long-term sustainability in doubt for all participants, whether working for a non-profit or not. Further, there have been numerous federal discussions about eliminating the program in its entirety and it is extraordinarily complex even for those who believe that they are in it, to actually determine whether they qualify and when – if ever – they will benefit from the program. See for example: Panicked Borrowers, and the Education Department’s Unsettling Silence , A Student Loan Fix for a Teacher, and Many Other Public Servants or Who Is a Public Servant? Borrowers Have a Lot Riding on the Answer.

All participants are expected to submit an employer attestation each year they participate in the program (see:https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service); at Mission Health, there are less than seventy such individuals who have done so but there are just over two hundred who currently perceive that they are in the program. All that said, we share the concern about any potential impact on student loans, and we are investigating whether there are any realistic options to mitigate or eliminate those concerns.  Unfortunately, it is too early to have any definitive guidance at this time, but we will communicate more as any options become clearer.

HCA Healthcare’s community of hospitals, physician practices, urgent care centers, freestanding emergency rooms and ambulatory surgery centers are recognized by our patients as providing some of the highest quality of compassionate care in the nation. In that same vein, HCA Healthcare’s graduate medical education programs provide residents and fellows with the opportunity to be a part of a learning hospital network that is changing the nation’s healthcare landscape.

 

HCA Healthcare currently is the largest provider of GME in America and developing more residency programs than anyone in the country to reinforce the physician pipeline in the communities they serve. Today, it offers 203 residency programs across a broad spectrum of specialties all across the country.  You can learn more about HCA Healthcare’s GME programs here.

Mission Health has been uniquely focused on the issue of clinician burnout.  In fact, our CEO Dr. Paulus, was one of three co-founders of that National Taskforce for Humanity in Healthcare, a group of national thought leaders focused on developing system, practice and individual changes that restore joy to caring.  Those efforts include our nationally recognized “reNEW” program, a system-wide improvement initiative aimed at eliminating burnout among medical staff by reducing hassles, improving efficiency, and innovating how colleagues collaborate.

Additionally, for a third consecutive year, Mission Health was named a Best and Brightest in Wellness® company in 2017 by the National Association for Business Resources. Evidence-based programs like Resiliency 101, nutrition counselling, and virtual healthy weight programs were added to the multitude of programs already improving employee wellness.  To expand support for care team members experiencing difficult emotional circumstances in their work, Mission became a member of the Schwartz Center for Compassionate Healthcare, which focuses on the human dimension of medicine and aims to offset the extraordinary stresses of today’s healthcare environment that threaten the delivery of compassionate care.  These efforts have yielded notable improvements with the percentage of fully engaged Mission Health team members increasing from 28% to 39% between Q1 2016 and Q1 2017, more than double the national benchmark of 18.7%.

HCA Healthcare is the second largest provider of Behavioral Health services and one of the nation’s largest acute care psychiatric providers.  Even more, the letter of intent specifies that HCA Healthcare will continue Mission’s in-flight capital projects, including a new Behavioral Health hospital.  And, because HCA Healthcare understands the sensitive nature of caring for geriatric patients suffering from behavioral health issues such as anxiety, and depression that can be common for patients in this stage of life and offer Geriatric, HCA Healthcare provides dedicated programs designed to address the unique challenges of our aging community.  Simply put, HCA Healthcare has a significant commitment to patients requiring Behavioral Health support.

As one of the nation’s leading providers responsible for providing approximately five percent of all U.S. hospital services, HCA Healthcare brings a strong track record of assisting older adults meet their unique healthcare needs and providing access to geriatric primary care physicians and specialists in aging. HCA Healthcare’s system not only includes advanced Geriatric care services, but also supports specialized geriatric emergency rooms and programs tailored to healthy aging.

Additionally, HCA Healthcare Behavioral Health Services is one of the nation’s largest acute care psychiatric providers. Because HCA Healthcare understands the sensitive nature of caring for geriatric patients suffering from behavioral health issues such as anxiety, and depression that can be common for patients in this stage of life and offer Geriatric, HCA Healthcare provides dedicated programs designed to address the unique challenges of our aging community.

HCA Healthcare currently is the largest provider of GME in America and developing more residency programs than anyone in the country to reinforce the physician pipeline in the communities they serve. Their GME program supports several Geriatric Medicine Fellowships to prepare graduates to be able to obtain board certification in geriatric medicine, and to be capable of excellent performance in geriatric care as practitioners, educators, administrators or directors of elder care facilities.

You can learn more about HCA Healthcare’s GME programs by clicking here.

Thank you for your question about Mission’s EMS services. Importantly, Mission Health is not going anywhere. This proposed transaction is about preserving and expanding healthcare for the communities of western North Carolina.  While we do not yet have answers to every question, there is nothing that we know of at this time that would impacts Mission’s EMS services.

HCA Healthcare does not currently have a presence in western North Carolina. So, while it is too soon to have answers to every possible question, there is nothing that we are aware of at this time that would impact Mission’s EMS services or fixed wing support.

Member Entity Questions

On Mission Health’s September 2017 financial statements, our cash and investments totaled $1.13 billion.  Of this, the following items were committed or required:

  • Dogwood Insurance Reserve – $64.4 million
  • Debt Service – $19.7 million
  • Donor Restricted Funds – $18.3 million
  • New Tower (Mission for Advanced Medicine) Funding – $171.4 million

This would reduce the net available at 9/30/17 to: $858 million

Please find below the 2017 Income Statement.

The amount of debt reflected on the balance sheet, including current and long-term bonds, mortgages and capital leases including premiums and net of issuance costs totals $583,450,000 as of August 31, 2018.

Mission Health intends to settle the debts using a combination of current cash and proceeds from the sale to HCA, depending on the nature of the debt.

Please find below a copy of Mission Heath’s balance sheet

As shown on the most recently published report, Mission Heath’s change in unrestricted assets for FY17 over FY16 was $162 million, with $68m provided by operating income and the remaining $94m through non-operating activities such as investment income.  All of the operating cash flow increase is reinvested into operations via capital investments and equipment, while the non-operating asset growth is retained for balance sheet and credit rating strength. 

Mission has no ownership of the Highlands Cashiers Foundation and has never had any ownership of that Foundation.  Rather, it is an independent, tax-exempt foundation supporting Highlands Cashiers Hospital. As such, it is distinct from and not part of the HCA Healthcare and Mission Health relationship currently in due diligence.  That money has always been, and will always remain in that Foundation supporting that Foundation’s purposes.

While we understand that everyone has their own perceptions, we do not agree with the characterization of “prior to Mission taking over” and subsequent to Mission enabling the hospital to remain viable and dramatically improving both clinical and operating performance. Service offerings are driven by what can be done safely and effectively in any given community. In view of the fact that the community isn’t changing with this contemplated transaction, it would be unlikely that services would change significantly.  Mission is very proud of the work we have done in collaboration with the Highlands Cashiers Board and the community.

With regard to your questions about potential future changes on the Highlands Cashiers campus what we can say today is that HCA has a long, proven history of investing in the communities it serves – from expanding access to urgent and primary care to enhancing specialty services.  HCA is committed to investing and helping move healthcare forward in each of our local communities by helping improve access and maintain quality and clinical outcomes.

This was true prior to Mission taking over, when Highlands-Cashiers Hospital lost nearly $5 million.  As you can see from the graph below (which depicts performance WITHOUT Foundation support), the hospital has continually and dramatically improved its operating performance with Mission’s support (as have all of our member hospitals).  With the addition of HCA Healthcare’s cost savings and expertise, Highlands-Cashiers Hospital has by far its very best opportunity to be sustainable over the long term.

The payor mix in our region is tremendously challenging as we’ve highlighted repeatedly.  We are disproportionately dependent on governmental payors (Medicare, Medicaid), and North Carolina has not expanded Medicaid.  Please see the chart below which shows the payor mix for each of Mission Health’s rural hospitals.

We’ve addressed some of the many obstacles faced by rural hospitals in the prior question. With respect to assets or benefits that our rural hospital members will enjoy going forward, there are several:

  1. First is the scope and scale of HCA Healthcare. All Mission Health entities will benefit directly from the expertise, purchasing power, efficiencies, capabilities and learnings that HCA Healthcare brings to Mission Health.  For example, just since 2013, HCA Healthcare has recruited 200 providers to its rural facilities in specialties including cardiology, general surgery and orthopedics. HCA Healthcare currently supports more than 100 rural clinics staffed by HCA Healthcare affiliated and employed physicians.  They are committed to serving patients wherever they live — providing care sooner and closer to home.
  2. Second, Mission Health will forgive and eliminate nearly $80 million in debt owed to it by its member hospitals upon closing of the transaction. That’s an extraordinary, direct contribution to each local community, relieving them of payments that otherwise would have been required.
  3. Third, the successor foundation to be created as part of the transaction with HCA Healthcare will provide substantial benefits to these communities because they suffer from the same problems that the foundation has pledged to attack: the social determinants of health.[1]

[1]https://www.cdc.gov/socialdeterminants/

Rural healthcare in America is under extreme duress directly related to federal and state healthcare policy and reimbursement combined with low population density and challenging demographics.  More than one rural hospital in the United States closes monthly.[1]  Just recently, Regional Medical Center Jacksonville, a 104-bed hospital in Alabama, closed June 30, 2018 — after 42 years in operation due to rising input costs and insufficient revenue.  The National Rural Health Association has said that one of every three rural hospitals is at risk of closure.  Not surprisingly, many have reported on the very difficult challenges that rural hospitals face[2]and some have called for reinventing rural healthcare entirely.[3]

In general, rural hospitals suffer from all of the same challenges as other hospitals, but then they are further stressed with: smaller populations with more challenging demographics (including payor mixes) that make sustainable service offerings difficult, and fewer physicians and other clinicians who want to live and practice in rural areas.  Difficulties in recruiting to and retaining physicians and other clinicians in rural areas are multifactorial, including: patient volume limitations that makes maintaining specialized skills difficult or impossible; challenges for non-medical spouses in finding employment in rural areas; access to educational opportunities that such professionals frequently desire and, ironically, the economic stresses that rural hospitals face which result in negative implications for long-term practice and/or employment stability.

So when hospitals in western North Carolina were challenged, Mission Health reached out to support them as good neighbors, good stewards and good friends. With the stability that has come from being a part of Mission Health, it’s easy to forget that every regional member hospital was in economic distress prior to joining Mission Health (e.g., emergency funds were extended to Blue Ridge Regional Hospital in Spruce Pine even many years before it ultimately joined Mission Health; McDowell Hospital in Marion had depleted its cash and was unable to buy equipment or pay vendors; Angel Medical Center in Franklin was in default of its debt obligations; and Highlands-Cashiers Hospital in Highlands was losing nearly $5 million a year necessitating philanthropic support to remain open).

One objective numerical marker for the degree of distress faced by Mission Health’s rural hospitals is that cumulatively, they are today nearly $80 million in debt to Mission Health. If any hospital were to leave Mission Health that debt would have to be repaid in full.  Instead, Mission will forgive all of that debt upon the closing of the transaction with HCA Healthcare.

Fortunately, since joining the system, member hospitals’ combined operating margin has risen steadily from a negative $16.4 million in FY10 to a positive $11.7 million in FY17, a net improvement of +$28.2 million.  So today, while there is an annual struggle to maintain performance for everyone under the Mission Health umbrella, the overall financial condition of Mission Health’s rural hospitals is good.  But every rural hospital is always just one step or change away from distress – the loss of one or more doctors, yet another Medicare or Medicaid cut, or demands from a dominant insurer that rural hospitals subsidize inflation on the cost of the care provided to its enrollees.

With respect to your question as to whether any of Mission Health’s rural hospitals “could be profitable or break-even as stand-alone hospitals,” that outcome is extremely unlikely (with Mission Hospital McDowell being the one possible exception).  With respect to how an affiliation with another health system might change things, that forecast is obviously hard to project.  In general, supporting small rural communities that are not part of a contiguous geographic area where care can be coordinated directly via the larger system entity to benefit patients (e.g., telemedicine services, outreach clinics, etc.) is either exceedingly difficult or impossible.

Over time, Mission Health has received offers from health systems to purchase some of our smaller hospitals (from entities other than HCA Healthcare).  Each was willing to pay a significant amount of money, but only if they would be allowed to subsequently close the hospital.  Such offers were counter to our values and we’ve never engaged substantively in any of those discussions.  In that context, it’s obviously important to note that under the contemplated transaction with HCA Healthcare, every entity within Mission Health will have very significant protections that it lacks today, including protections against program closures or being sold or closed entirely.

[1]https://www.cfra.org/news/160301/rural-hospitals-closing-rate-1-month

[2]As rural hospitals struggle, solutions sought to preserve healthcare access (e.g., http://www.modernhealthcare.com/article/20150516/MAGAZINE/305169959)

[3]Reinventing Rural Healthcare (https://bipartisanpolicy.org/library/reinventing-rural-health-care/#1516117449654-f88d3ad5-17b6)

The Highlands-Cashiers Hospital Board of Directors understood deeply the many benefits that will come with an HCA Healthcare affiliation and the very grave dangers that would result from any purported “spin-off.”

In general, rural hospitals suffer from all of the same challenges as other hospitals, but are further stressed with smaller populations with more challenging demographics (including payor mixes) that make sustainable service offerings difficult, and fewer physicians and other clinicians who want to live and practice in rural areas.  Difficulties in recruiting to and retaining physicians and other clinicians in rural areas are multifactorial, including: patient volume limitations that makes maintaining specialized skills difficult or impossible; challenges for non-medical spouses in finding employment in rural areas; access to educational opportunities that such professionals frequently desire and, ironically, the economic stresses that rural hospitals face which result in negative implications for long-term practice and/or employment stability.

Fortunately, since joining Mission Health, its rural hospitals’ combined operating margin has risen steadily from a negative $16.4 million in FY10 to a positive $11.7 million in FY17, a net improvement of +$28.2 million resulting from Mission Health’s support, lower cost of operation and more.  So today, while there is still an annual struggle to maintain performance for every provider under the Mission Health umbrella, the overall financial condition of Mission Health’s rural hospitals is much improved.  But every rural hospital is always just one step or change away from distress – the loss of one or more doctors, yet another Medicare or Medicaid cut, or demands from a dominant insurer that the rural hospital subsidize inflation on the cost of the care provided to its enrollees.

Highlands-Cashiers Hospital has continually and dramatically improved its operating performance with Mission’s support (as have all of our member hospitals), and with the addition of HCA Healthcare’s cost savings and expertise, Highlands-Cashiers Hospital has by far its very best opportunity to be sustainable over the long term.

With the contemplated transaction with HCA Healthcare, every entity within Mission Health will have very significant protections that it lacks today, including protections against program closures or being sold or closed entirely.  Most importantly, HCA Healthcarehas a very strong track record of enhancing the operations of its hospitals.  HCA also has a proven history of investing in the communities it serves and supporting healthcare in each community.

Additionally, if the transaction with HCA Healthcare is consummated, Mission Health will forgive and eliminate nearly $80 million in combined debt owed by its member hospitals.  That’s an extraordinary, direct contribution to each local community.

As we’ve stated previously in numerous settings, CarePartners is part of Mission Health.  All of Mission Health, including but not limited to CarePartners, would become part of HCA Healthcare if the sale of Mission Health to HCA Healthcare is consummated.  CarePartners, and other components of Mission Health will continue to operate under their current names.

By contrast, none of the existing Foundations within Mission Health, including but not limited to CarePartners Foundation, are part of this contemplated transaction.  Those foundations will remain as independent entities.

Although Mission Health has signed a letter of intent with HCA Healthcare, we do not have the answers to every possible question.  However, as the letter of intent is currently structured, subject to due diligence, all of Mission Health, including CarePartners and Eckerd Living Center would become part of HCA Healthcare, operating under the current name.

The negotiations with HCA Healthcare are not finalized so there are no final, definitive answers.  [Note: the reason for the discordance in this issue has to do with an absolute commitment (no sooner than five years) and a test for closure (two consecutive years of losing money despite trying not to do so; meaning the total time is either (3 + 2 = 5) or (5 + 2 = 7)].

Most important, HCA Healthcare has a very strong track record of enhancing the operations of its hospitals.  HCA Healthcare also has a proven history of investing in the communities it serves and supporting healthcare in each community.

Right now, no entity in the Mission Health system has any material protection relative to its program or service offerings.  Under the contemplated transaction, every entity within Mission Health will have very significant protections that it lacks today with respect to both program and facility closures.  HCA Healthcare has committed to a series of significant protections, including a commitment not to close any hospital for a significant period of time and not without first attempting to sell the hospital to any willing bidder (should that circumstance ever occur).

We have signed a letter of intent to explore a relationship with HCA. It is far too early to have definitive answers to many questions. That said, if HCA Healthcare were to acquire Mission Health, subject to due diligence, it would acquire the entirety of the health system, including Mission Hospital, Angel Medical Center and other Mission Health member institutions. Mission would not “remain autonomous”, it would be part of HCA Healthcare as would Angel Medical Center.

HCA Healthcare has a long, proven history of investing into the communities it serves – from expanding access to urgent and primary care to enhancing specialty services. We do know HCA is committed to investing and helping move healthcare forward in each of our local communities by helping improve access and maintain quality and clinical outcomes. We’ll know more as our conversations continue over the next several months and due diligence is performed as described in the letter of intent.

No, not anything more specific or different than any other Mission Health entity.  Mission Hospital – McDowell is an important member of the Mission Health system.  As for all of Mission Health, we believe this is the right choice for our communities, patients and team members and truly transformational for all of western North Carolina.  HCA is excited about the brand-new Mission Hospital – McDowell and looks forward to serving the community for a very long time.

McDowell patients can look forward to the same high-quality care, delivered by their trusted caregivers that they deserve and have come to expect.  But in addition, the remarkable new Foundation that will be created to improve the health of the people of western North Carolina and the surrounding region will be a game changer for our community’s health, including but not limited to the McDowell community.

This proposed transaction is about preserving and expanding care. Importantly, although we are still early in the negotiation process and haven’t completed due diligence, HCA Healthcare has made initial commitments to ensuring that our capital projects in flight continue, including Angel Medical Center and the Mission Hospital for Advanced Medicine. If HCA Healthcare were to acquire Mission Health it would be responsible for constructing a new hospital facility in Franklin. Until that time, if ever, Mission Health remains responsible for the new facility. Our patients in Franklin can look forward to the same high-quality care, delivered by their trusted caregivers that they deserve and have come to expect.

Mission Health Bond Questions

Please see EMMA for this and any other bond-related questions.

Please see EMMA for this and any other bond-related questions.

We can confirm the amount of bond issued, which was $100,285,000 for the 2017 issuance.  This is a matter of public record from the Offering Statement.  Otherwise, we don’t have anything new to add that we haven’t already published on EMMA.  Our position on the questions asked have been fully addressed in the EMMA disclosures and on the MissionHealthForward.org website.

Mission Health will always handle its financial transactions, including its bond transactions, in good faith and in accordance with the obligations disclosed clearly to investors in the underlying documents for any bond.  Please see the Mission Health System voluntary disclosure that has been posted to the EMMA website maintained by the Municipal Securities Rulemaking Board.  https://missionhealthforward.org/EMMA-Notice-Mission-Redemption-Provision.pdf

In the event that the proposed transaction is consummated, Mission intends to pay, redeem or defease substantially all of its outstanding indebtedness at or prior to closing in accordance with the applicable documentation relating to such indebtedness.  The special call provisions for each such series of bonds were fully and clearly disclosed in the “Redemption Provisions” section of the respective final Official Statement for each such series of bonds. Please see Mission Health’s voluntary disclosure posted to the EMMA website maintained by the Municipal Securities Rulemaking Board for the language describing these special call provisions.

Since these call provisions were clearly and fully disclosed in the Preliminary Official Statements and Official Statements for each of the bond issues described above, Mission obviously assumes that:

  1.  Investors who purchased any of these bonds were fully aware of such call provisions; and
  2. The purchase price or yield at which such investors purchased these bonds (either at the initial offering of in the secondary market) reflected the known redemption risks relating to such call provisions (as well as the other optional and extraordinary optional call provisions described in the Official Statements relating to these bonds).

No definitive decision has yet been made by Mission as to how it will pay, redeem or defease its outstanding indebtedness upon consummation of the proposed transaction. Mission intends to post additional information regarding this matter when it determines that such disclosure is necessary or appropriate.

Operational Questions

That provision is a technical one and won’t have any impact on services provided.   As a $2 billion enterprise with thousands of services and large amounts of real estate, those final decisions have not yet been determined.  But should any clinics or real estate (facilities) not transfer to HCA, any related patient care services would continue to operate regardless.  Practically speaking, any such decision won’t have any impact on patients

The agreement stipulates that member hospital services, which are described on schedule 7.13b, will be maintained for 5 years.  For Mission Hospital and CarePartners, the time period is 10 years, and those services are described on schedule 7.13a.  Any exceptions to these protected periods are described in section 7.13 of the APA. The full APA and these schedules are posted on MissionHealthForward.org.

Obviously it is a very difficult if not impossible challenge to see into the future with perfect clarity.  Standards of care can change, technology can change and consumer preferences can change among other things.  Levels of staffing, for example, routinely change (whether up or down) as demand shifts and technology enables services to be provided more efficiently and effectively. As such, rather than trying to imperfectly define what “maintaining” means or to line item each and every possible service for time periods of 5 and 10 years, the services themselves are described generally and an exception process is defined.  A key feature of the agreement is that there are local advisory boards in place (built from the existing community boards) as well as an arbitration process described to settle any differences of opinion that can’t be otherwise resolved.

With respect to enforcement, the first relevant body is the local advisory board that has authority to make any changes to agreed upon services.  Should there be a dispute there, Mission Health would be the next line of defense to the extent that it remains in existence and has the wherewithal to push for enforcement.  Because Mission Health will ultimately not exist and because many provisions in the agreement persist to perpetuity, Dogwood Health Trust will have the ultimate enforcement role along with the assets to ensure its ability to do so. As a perpetual organization, it will be the ongoing steward and protector of the HCA Healthcare agreement.

Mission Health is a not-for-profit, independent, community-governed health system.  Our Board of Directors – all of whom are community volunteers – have both the legal and fiduciary responsibility for the organization.  Mission Health does not have shareholders and no one – not the Board, nor CEO nor management – stands to personally benefit from this transaction. Because there are no individual “owners” and because the health system has benefited from its non-profit status, the proceeds must go exclusively to the benefit of the community.  That’s why all of the remaining cash and investments will ultimately be transferred to the Dogwood Health Trust, with the sole mission of dramatically improving the health and well-being of all people and communities of western North Carolina.

A Letter of Intent (LOI) means that the parties have mutually agreed to further evaluate a potential relationship between them using a defined process and within certain parameters.  Said another way, the LOI provides an outline of what an agreement might ultimately look like but it is fully contingent upon additional information and is non-binding.

As a result of the signing of the Letter of Intent, Mission Health and HCA Healthcare have begun the due diligence and definitive negotiation phase of process.  We anticipate that the due diligence process will take 90-120 days to complete. If we confirm in this next discovery phase that joining HCA Healthcare holds the great promise and potential that we believe it does and definitive agreements are signed, that will trigger a 90-day regulatory review period.  Any transaction remains subject to eventual approval by the Attorney General, but given the promise and potential we believe this holds for western North Carolinians, we are hopeful this transaction will proceed smoothly and receive the required regulatory approvals.

If regulatory requirements are met, Mission Health would then become a member of the HCA Healthcare family sometime later this calendar year.

You are correct that Mission Health will be a new division within HCA Healthcare.  What that means is that certain local infrastructure (such as management, key support departments and so on) will remain local rather than being fully centralized.  This also means that our system will have continuity of existing leadership, services and name.  Additional details will be determined as Mission Health and HCA Healthcare continue our discussions toward a definitive agreement.

As a result of the contemplated transaction, Mission Health would become part of the HCA Healthcare family. Importantly, Mission Health, and our facilities, will remain in western North Carolina—providing the same world-class care and services, with the same people and the same name as it has for the past 133 years.  Together, Mission Health and HCA Healthcare will bring the strength of Mission Health’s clinical excellence with HCA Healthcare’s commitment to investing in western North Carolina through improved access to care and the creation of a new foundation that would invest tens of millions of dollars each year to improve the health of our 18-county region, including a focus on the social determinants of health.

Mission Health does not have shareholders and no one – not the Board, nor CEO nor management – stands to personally benefit from this transaction. The people who will benefit the most should this transaction move forward, are our communities and patients. Becoming part of HCA ensures that Mission Health will be here for the long-term and able to continue – and enhance – our tradition of providing high quality care. This is a win for our patients. HCA provides scale and resources that Mission Health doesn’t have, helping us to access new tools and technologies, which is a win for our team. Finally, the creation of a substantial new foundation as part of the contemplated transaction that could invest tens of millions of dollars annually will enable us to support the underserved and address the root causes of many health problems in ways and with depth that would have been completely impossible.

Mitigation has never been a “growth strategy”, it has been a cost reduction strategy necessary to sustain high quality care in an environment where our costs rises but our payors do not respond in kind.  At this time, our focus is on delivering world class healthcare to our patients and on our proposed transaction with HCA Healthcare.

As you know, being named a nationwide Top 15 Health System in six of the past seven years is an extraordinary feat which represents the incredible dedication, skill, compassion and commitment to excellence of the entire Mission Health team.  But no organization can rest on its laurels; rather, it must continue to evolve, change and adapt to rapidly changing market conditions.  Mission’s goal in potentially joining HCA Healthcare is to become an even stronger organization going forward than we would be alone.

Mission Health and HCA Healthcare make a good match given our rankings and the fact that 106 of HCA Healthcare’s hospitals are on The Joint Commission’s list of Top Performers on Key Quality and 10 of their hospitals rank among the eight percent of hospitals nationwide that are Magnet designated for providing the highest quality of patient care, nursing excellence and innovations in professional nursing practice.  Although we are in process, Mission Health does not yet have a hospital that has achieved this designation.

HCA Healthcare brings significant capabilities in clinical trials, research, predictive modeling and analytics and more that augment the excellent capabilities that Mission Health has now.  We expect that patients, team members and our community will all benefit from the planned transaction.

If the transaction moves to completion, HCA Healthcare (HCA) will be responsible for the remaining budget for the Mission Hospital for Advanced Medicine.  Like the Mission Health Board, HCA management understands the critical importance of that new facility for everyone in western North Carolina, and they have committed to completing it.

Transylvania Regional is our major facility in the area and it would benefit, like our other facilities, from this proposed transaction.  Moreover, although we are still early in the negotiation process, HCA Healthcare has made initial commitments to ensuring that our capital projects in flight continue. Our patients in Transylvania, Polk and Henderson counties can look forward to the same high-quality care, delivered by their trusted caregivers, that they deserve and have come to expect.

Thank you for asking this question! It seems that this incredible opportunity has been somewhat lost in the larger news, understandably. Mission Health and HCA Healthcare intend to create a healthcare innovation fund that will be based in Asheville and dedicated to fostering innovations, companies and jobs dedicated to improving health. Mission and HCA Healthcare will each contribute $25 million to the fund.  The innovation fund is in addition to the establishment of a large new foundation that would provide tens of millions of dollars in annual investments dedicated to improving the health and wellbeing of western North Carolina.

The Mission Health System Board of Directors is comprised of local community members with deep and strong ties to the region – both Buncombe County and beyond. All of these Board members are part of our community, volunteering their time without pay because they care deeply about ensuring access to high quality care for everyone in western North Carolina for generations to come.  It is that commitment that governs their every decision.

Board seats are awarded based upon necessary skills and qualifications.  Mission Health is an approximately $2 billion entity operating in an extraordinarily complex and regulated industry.  The skills, experience and dedication required to fulfill that fiduciary duty are significant. While it is certainly likely that someone could both live outside of Buncombe County and have great competence, passion, time and more, the point here is that it is competence, skills, time and alignment that matter most in effective governance.

These committed and exceptional individuals not only govern Mission Health with dedication, they are also philanthropic, civic minded, and talented leaders in the community as well as respected leaders in the corporate community sitting on national Foundation and Corporate Boards, serving as members of Rotary, and serving on regional Economic Development Coalitions and Chamber Boards.

Our Board members are:

  • John R. Ball, MD, JD, Chair – Ball, a retired medical executive, attended both medical and law school at Duke University, originated the Washington Office of the American College of Physicians and served as its executive vice president for eight years. He lives in Asheville with his wife.
  • John W. Garrett, MD, Vice Chair­­ – Garrett has practiced gastroenterology for 27 years in Asheville where he has lived with his wife and family. He remains active in medical practice and serves on several national committees for the American Gastroenterological Association.
  • Janice Brumit – Brumit, a native of western North Carolina who was born and raised in Boone, NC, currently lives in Asheville with her husband and is the Vice President of Community Relations for Brumit Restaurants Group.
  • Daniel Casse – Casse is co-founder and managing partner of High Lantern Group, a firm that focuses on business communications, strategic positioning, and thought leadership for executives. Mr. Casse lives in Asheville.
  • Suzanne S. DeFerie, Treasurer – DeFerie, a native of Lenoir, NC, has served as President and Chief Executive Officer of Asheville Savings Bank since 2008, recently acquired by First Bank in 2018. She currently lives in Asheville.
  • Bridget A. Eckerd, PE – Eckerd served on the Foundation Board of Mission for 12 years and was on the construction team for the Reuter Children’s Outpatient Center. Ms. Eckerd moved to Asheville in 1991 where she resides today.
  • Leon Elliston, M.D. – Elliston, a member of the Mission Hospital Staff since 1979, is a partner in Allergy Partners, and a Fellow of the American Academy of Allergy, Asthma & Immunology. Dr. Elliston lives in Asheville with his wife, Katherine Volatile, MD – an Ophthalmologist who practices in both Hendersonville and Brevard.
  • ChrisFlanders, M.D. – Flanders is a Board-Certified Emergency Medicine Physician. His private-practice group, Carolina Mountain Emergency Medicine, has provided services to Mission Health for many years. He lives in Asheville with his family and has served as Emergency Services Service Line Leader.
  • Scott Hickman – Hickman is Chief Executive Officer of Riverbend Malthouse, the third craft maltster in the nation and the first in the South. Just prior, he was president of Tamalpais Ventures and previously CEO of the W.P. Hickman Company, his family’s business.  He lives in Arden with his family.
  • Lynn Kieffer – Kieffer is recently retired as a community pharmacist and has resided in Asheville for 28 years with her husband. In addition to the Mission Health board, Ms. Kieffer serves on the Mission Foundation Board’s Executive Committee.
  • Thomas (Tom) A. Maher – Maher is the owner of Pisgah Investments LLC, which focuses on public equities, primarily public real estate companies, and the President of Pisgah Investments Foundation, a private foundation focused on charitable giving in western North Carolina. He lives in Asheville with his family.
  • Tom Oreck – Oreck is the CEO of 3Green LLC, specializing in branding and multi-channel marketing. He is the former CEO of Temp-tations LLC and the former President, CEO and Chairman of the Oreck Corporation. Mr. Oreck lives in Asheville with his family.
  • Anne Ponder, PhD – Ponder is Chancellor Emerita of UNC Asheville after serving nine years and retiring in 2014. She was recognized with the Order of the Long Leaf Pine Award, the state’s highest civilian honor, and is a consultant specializing in presidential transitions and college and university strategic planning.  Dr. Ponder lives in Madison County with her husband.
  • Kenneth (Ken) G. Racht – Racht is Chairman and CEO of Racht Development Corp. After retiring in 1986, Mr. Racht elected to work in non-profit governance and has served as Chair of the Transylvania Endowment and Vice Chair of Transylvania Regional Hospital. He lives in Brevard with his wife.
  • Jeffrey (Jed) Edwin Rankin – Rankin, a native of Marion, is the owner and president of Marion Credit Company, Mitchell Credit Company in Spruce Pine, Macon Credit Company in Franklin, M&J Loans of Shelby and R&R Reinsurance LTD in Marion. He also serves on the Mission Hospital McDowell Board. He has always lived in Marion with his family.
  • Robby Lee Russell – Russell is Senior Vice President and Commercial Relationship Manager of PNC Bank as Senior Vice President and Commercial Relationship Manager covering western North Carolina. He lives in Arden with his wife.
  • LaVoy Spooner, Jr., Secretary – Spooner and his wife have lived in the Asheville area for 18 years. He retired from AT&T in 2014 after a significant career in the telecommunications industry, receiving the Excellence in Public Service Award from the Asheville Area Chamber of Commerce that same year.
  • Wyatt S. Stevens, Immediate Past Chair – Stevens, a native of Asheville and a partner in Roberts & Stevens, has more than 20 years of experience in complex personal injury litigation and commercial litigation. Mr. Stevens has been recognized in Business North Carolina magazine’s Legal Elite.  He lives in Asheville with his family.

Regulatory Review Questions

The North Carolina Attorney General’s Office is required to review and approve the proposed transaction. With respect to the FTC or the US Department of Justice, it’s important to note that HCA Healthcare does not currently operate in North Carolina.  While we can’t presume to speak for regulators, we do not anticipate any competitive concerns.

For any transaction, the attorney general (and his or her counterparts at the federal level) will review the effect the transaction might have on market competition. In this instance, since HCA is new to North Carolina and there is no market consolidation (just a change in ownership of Mission Health), this should not be an issue.

Second, for any transaction that involves the sale of a non-profit entity like Mission Health, which has benefitted from tax exemption and public support, the attorney general will want to ensure that HCA is paying a fair price for the entity.  If, for illustration purposes only, Mission Health was worth $100, and HCA was paying only $10, then the public would be shortchanged by $90. The attorney general’s job is to prevent that from happening. Mission Health is fortunate in that it has been advised by extremely well-qualified financial advisors with extensive experience in negotiating transactions of this type and knowledge of the prices paid in similar transactions. Once the relevant data is shared with the attorney general as part of his review, we’re confident he will be satisfied that the public is being adequately compensated for the sale.

Third, the attorney general will want to ensure that any proceeds resulting from the sale continue to benefit the public. One typical manner to accomplish this is for the sales proceeds to be transferred to a charitable organization (such as a private foundation) that will continue to provide benefits to the public.   And, the closer the mission of the resulting charitable organization is to the mission of Mission Health, the more likely it is that the very same public that has supported and been supported by Mission Health for so many years will benefit from the activities of the new organization.

In the case of Mission, Dogwood Health Trust, the successor foundation, will have an almost identical mission to that of Mission Health.  Its focus will be: to dramatically improve the health and well-being of all people and communities in Western North Carolina

We are currently completing due diligence and have not yet sent the signed documents to Attorney General Stein.  The approximately 90-day timeframe given for the due diligence period was only an estimate. Most important, the process couldn’t commence immediately upon signing the letter of intent because both Mission and HCA Healthcare needed to produce, among other things, tens of thousands of documents for the process. Given the delay in starting, we are largely on track with our estimate and anticipate that part of the process coming to conclusion by the end of August.

Yes, the attorney general (and his or her counterparts at the federal level) will review the effect the transaction might have on market competition, ensure that HCA is paying a fair price for the entity (the fairness opinion) and ensure that any proceeds resulting from the sale continue to benefit the public.

While a sales agreement is typically not a publicly shared document and includes confidential information from both the buyer and the seller, it is unlike to be made public.  That said, we have and will continue to keep the public informed on where we are in the process and how and if the anticipated arrangement might change.

Because the health system has benefited from its non-profit status, the proceeds must go exclusively to benefit the community.  That’s why all of Mission Health’s remaining cash and investments – after all debts have been paid – will ultimately be transferred to the newly formed Dogwood Health Trust.  Dogwood Health Trusts’ sole mission is to dramatically improving the health and well-being of all people and communities of western North Carolina.  Once these sale proceeds are transferred to the Dogwood Health Trust, which will be a nonprofit, private non-operating foundation, its assets will be a public record.

Insurance and Healthcare Cost Questions

While it simply isn’t possible to answer this question with 100% certainty because it involves other parties (namely HCA Healthcare and numerous insurance companies), there is no reason to believe that there will be any change to Mission Health’s in-network status with any insurance company as a result of the transaction.

Nothing is changing other than the owner of the health system and everything else remains the same under all insurance contracts, until they reach the termination date.  As a legal matter, the insurance companies will need to agree to transfer the contract to the new owner, but that is a very simple, administrative matter that routinely occurs and shouldn’t create any difficulties.

Yes, we do plan to accept assignment for Medicare.  In addition, we also plan to accept assignment for Medicare Advantage plans that we are contracted with currently.  However, each Medicare Advantage plan must agree to allow us to move Mission’s existing contracts to HCA.  While it is our hope and desire to continue our contracts with our Medicare Advantage plans, we do not control this step, so we cannot guarantee that it will happen in all cases.

Yes, HCA Healthcare has interest free payment arrangements.

In addition, more than 10 years ago, HCA Healthcare led the way for the hospital industry by establishing an improved charity care and uninsured discount policy to help address the nation’s growing uninsured population. In fact, HCA Healthcare has one of the most generous charity care policies in the industry, even more generous than Mission Health, providing charity care to those below 200% of the Federal Poverty Guidelines and a sliding scale discount with an out-of-pocket cap for those between 200% and 400% of the Federal Poverty Guidelines.  HCA Healthcare and affiliated doctors and nurses provided charity care, uninsured discounts and uncompensated care at a cost of more than $3 billion in 2017.

To best serve patients and provide a meaningful estimate of out-of-pocket expenses, HCA Healthcare has experienced financial counselors available to provide financial estimates prior to service delivery and to answer billing questions following care.

Yes, more than 10 years ago, HCA Healthcare led the way for the hospital industry by establishing an improved charity care and uninsured discount policy to help address the nation’s growing uninsured population.  In fact, HCA Healthcare has one of the most generous charity care policies in the industry, even more generous than Mission Health, providing charity care to those below 200% of the Federal Poverty Guidelines and a sliding scale discount with an out-of-pocket cap for those between 200% and 400% of the Federal Poverty Guidelines.  HCA Healthcare and affiliated doctors and nurses provided charity care, uninsured discounts and uncompensated care at a cost of more than $3 billion in 2017.

Additionally, HCA Healthcare has interest free payment arrangements.  To best serve patients and provide a meaningful estimate of out-of-pocket expenses, HCA Healthcare has experienced financial counselors available to provide financial estimates prior to service delivery and to answer billing questions following care.

Healthcare costs aren’t driven by the ownership of a facility but rather by the input costs incurred to provide care. Therefore, we don’t expect that patients will see any significant changes related to the transaction. However, one of the benefits of joining HCA Healthcare will be increased efficiencies, so we look forward to the expanding access and accelerating improvements.  HCA is one of, if not the most, efficient and effective healthcare operators in the nation. One of the many benefits of their scale is that their back office and overhead is so much lower. A second benefit of scale is that every single thing they buy, from a Band-Aid to an MRI scanner, they buy at the lowest price in the US, if not the world.

HCA is one of, if not the most, effective healthcare operator in America. Given their size differential and the scale of economies that come with their larger size, HCA can generate the returns needed to maintain and improve care significantly easier than we can because we don’t have their cost structure.

SEARCH WNC Questions

All of the Legacy Foundation Boards are now and will continue to be comprised by community members and will be more important in their respective communities than Dogwood Health Trust Board. Those community Board members will determine how subsequent Board members for the Legacy Foundations are elected. These Legacy Foundations will be independent of both the future Mission Health and Dogwood Health Trust.

Separately, each rural hospital board also will form a local advisory board comprised of four members appointed by the local community board members of each hospital and four members appointed by HCA. Each local advisory board, and only the local advisory board, will have the authority to approve or “veto” variations from the post-closing covenants applicable to its hospital.

We appreciate your perspective, but strongly disagree. The Mission Health Board has a legal and fiduciary responsibility to ensure that Dogwood Health Trust is an appropriate recipient of the sales proceeds from the proposed transaction with HCA Healthcare. The Mission Health Board also strongly prefers that the selection process be conducted in Western North Carolina, utilizing best practices, and be as insulated as possible from partisan politics. Not only is there no “conflict” with respect to the current Dogwood Health Trust Board, there is a direct benefit from those Directors’ familiarity with Mission Health as the region’s largest healthcare provider, and each Director selected for the Dogwood Health Trust Board has impeccable experience and credentials to serve in such capacity.

When the referenced graphic was created (shortly after the letter of intent) the graphic was accurate because the now Dogwood Health Trust did not exist.  The foundation graphic has been updated based upon current state.  We appreciate your bringing that to our attention.

This is simply not a true statement.  Dr. Paulus never had any such conversations nor was Dogwood Health Trust created “in secret.”  Dogwood Health Trust’s bylaws, articles of incorporation and criteria for and nomination of Board members are all posted on its public website.  Further, only the Mission Health Board had this legal and fiduciary responsibility as Dogwood Health Trust is the successor to the not-for-profit Mission Health.  The Mission Health Board, by a vote, set up a committee of the board to select the initial Dogwood Health Trust Board, and through that vote, the first six Board members were appointed.  Subsequently, those Board members added three additional members. The current nine members will select all additional members.

That is incorrect.  Dogwood Health Trust can in fact pursue monetary damages from HCA using binding arbitration under the rules of the American Arbitration Association. In situations in which monetary damages are not an adequate remedy (for example, only injunctive relief will suffice), Dogwood Health Trust can pursue a claim for specific performance from a court of competent jurisdiction.

The Mission Health Board was given a choice between continuing Mission Health’s current charity care policy or adopting HCA’s charity care policy. The Mission Health Board chose to adopt HCA’s current charity care policy for the first ten years because it is on balance more favorable to patients than Mission’s current policy. The HCA policy provides charity care to those below 200% of the Federal Poverty Guidelines and a sliding scale discount with an out-of-pocket cap for those between 200% and 400% of the Federal Poverty Guidelines, along with interest free payment arrangements.  Importantly, very significant protections are provided in perpetuity – well after the tenth anniversary of closing – as HCA must maintain a policy that is at least as generous as the policy maintained by the then-largest North Carolina nonprofit healthcare system (currently Atrium Health).

HCA Healthcare has committed to keeping all hospitals open for a minimum of 10 years and also has agreed not to sell any hospital for a minimum of 10 years. HCA also has committed to maintaining clinical programs for at least 5 years.  Today, no entity in the Mission Health system has any material protection relative to its program or service offerings, and the broad economic, health policy and insurer environment in which Mission Health operates  has led to more than one rural hospital per month closing its doors.

It’s important to remember that 10 years in the healthcare industry is a comparatively long period of time.  For example, none of the advancements below were available 10 years ago:

  • 3-D printing of bionic limbs is helping those who have lost a limb, like a leg or hand
  • Precision Medicine to treat patients based on their unique genetic make-up
  • Targeted gene therapy to treat cancers
  • Minimally Invasive Surgery as the norm
  • HIV/AIDS as a chronic disease – patients now live an additional 50 years or more than just a few years ago

HCA Healthcare is paying a fair price for Mission Health, whose Board of Directors was advised by and received a fairness opinion from a pre-eminent healthcare investment bank to ensure that HCA was paying a fair pricebeforethe Mission Health Board was willing to approve the final definitive agreements.  The North Carolina Attorney General  reviews the effect the transaction might have on market competition, ensures that HCA is paying a fair price for the entity (the fairness opinion), and ensures that any proceeds resulting from the sale continue to benefit the public.

All of the relevant and appropriate transaction documents are posted on the home page of the Mission Health Forward website, far beyond the “basic text of the sales agreement.”  For instance, the Asset Purchase Agreement (APA) Schedules (a document with 2,670 pages) can be found here, the APA Exhibits can be found here, and the Mission Health Fairness Opinion can be found here.

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