Local hospital hires University Health Systems management team | Eastern North Carolina Now

    Beaufort Regional Health Systems Board of Trustees narrowly approved a “sweetheart deal,” at yesterday’s regularly scheduled meeting, to bring in University Health Systems as hospital management, before its other suitors will have a chance to submit their leasing proposals. On the very same day that the draft version of the hospital’s Request for Proposal form became available for review by the board, the board already managed to create the perception of a “conflict of interest” in the bidding process by making this special deal with UHS.

    Not all of the BRHS board members were notified, ahead of yesterday’s meeting, of the chairman’s intent to hire UHS, a regional healthcare network out of Pitt County, to manage the hospital. Some, including BRHS Board of Trustee member Alice Mills Sadler, were incredulous to the idea of establishing such a relationship with one of the prospective lessees before all of the bids have been made.

    “My concern is that UHS is one of the persons who’s expressed an interest in the RFP process, and I feel that the public will see that they have an unfair advantage over other people who are engaged in this process,” said Sadler. “And if we’re going to do that for UHS, we might need to open this up to other persons who might be available to come in and offer their assistance as a team, for transparency and integrity of the process. To just unilaterally appoint them raises all kinds of issues with regards to fairness and legality in my opinion, and their involvement in this RFP process constitutes a conflict of interest as a potential RFP participant.”

    Another of those who had been left in the dark was BRHS Board of Trustee member Clifton Gray. Gray tried to prevent this pre-orchestrated tumbling of events before the final vote was taken with a motion to “continue with the succession plan at least until the RFP process has ended, and then at that time consider the alternative plan of management if needed by looking at the management team that the chairman has spoken to already, University Health Systems.”

    After this motion failed in a four-to-five vote, Gray made another motion to table the discussion over whether or not to hire UHS “until we get more information about this process, because, with all due respect, we’ve gotten the information about a conversation that our chairman has had with University Health Systems, but I just don’t see that we have enough information to make a good faith vote at this time.”

    That motion similarly failed in a four-to-five vote.

    In the end, the BRHS Board of Trustees voted to approve, five-to-four, a third motion made by trustee Jack Piland to import interim management from UHS, rather than continue reliance on the in-house succession plan in place since BRHS Chief Executive Officer Bill Bedsole’s June 23 notice of resignation. Voting in favor of bringing UHS in as quickly as possible, in all three motions, were BRHS Chairman Sandy Hardy, along with Piland, Grace Bonner, Sandy Easley and Curtis Potter; in opposition were Sadler, Gray, Hood Richardson and Allen Roberson.

    Today’s influx of the BRHS management team, which had been scheduled before the vote, according Hardy, ended the week-long leadership role of BRHS Medical Practice Administrator Susan Gerard, who naturally succeeded Bedsole following his leave of absence.

    Hardy denied that the future interconnectedness of BRHS and UHS will pose a legal or ethical dilemma under the premise that there is a precedent of such arrangements.

    “I would like to state that they’ve done this before in eastern North Carolina, though. And they did it without any conflict of interest,” said Hardy.

    Gray interceded that BRHS will be held liable for any UHS interference in the fairness of the bidding process, which would make the hospital vulnerable to lawsuits from the other interested parties. Hardy, echoed by Easley, said that BRHS attorneys could write their contract with UHS in such a way that would protect the hospital from liability.

    “Well, I can tell you, under contract, we could make them liable,” said Hardy. “And I assure you that if anybody goes suing anybody, they’d be more likely to get money out of University Health Systems than Beaufort Regional Health System Authority right now.”

    Sadler rhetorically questioned Hardy’s admission that a lawsuit was possible.

    “Is your opinion just to let them sue?” asked Sadler.

    Gray also disagreed with Hardy’s lack of worry about potential lawsuits.

    “We certainly can be joined by University Health Systems in any lawsuit that anybody takes out against them,” said Gray. “University Health Systems would most likely join the hospital as a necessary party to that lawsuit. There is extensive liability to the hospital and the county, I would think.”

    Again, Hardy inferred that precedent and trust in attorneys should relax those worried about “conflicts of interest.”

    “University Health Systems has done this before and they managed not to get sued. They have a good legal team,” he said.

    Gray was unconvinced by Hardy’s rhetoric.

    “I understand that. I understand that doctors have performed surgeries before, and lawyers have done cases to the juries before; but there’s still malpractice in both fields,” said Gray.

    BRHS Board of Trustees member Hood Richardson voted against the proposal to bring in outside management in an attempt to preserve momentum for his “dual track method” to save the hospital, which planned to help the hospital contain costs and remain independent, while pursuing a merger as a last resort.

    “What this option does if it’s passed is it abandons the possibility that this hospital will be saved for the citizens of Beaufort County, because the board has not gone forward in good faith and tried to save the hospital from the reduction in operations standpoint and cost savings wherever they can,” said Richardson. “They abandoned that process way back when. So you can kiss your hospital goodbye when this motion passes.”

    Hardy presented the proposal to hire UHS verbally during closed session, providing no paperwork or contracts to board members, according to Richardson.

    Hardy admitted that BRHS was effectively hiring UHS for an unknown fee. He told reporters after the meeting that he was assured by UHS that the fee would be “reasonable.” Sadler took issue with having an uncertain management fee looming above the near-bankrupt hospital.

    “This agreement with University Health Systems does not come free, even though you said that they’re going to hold back on the bill,” said Sadler. “Eventually that bill is going to have to be paid, and we already don’t have any money.”