UHS refuses to disclose financial information on the Hospital deal | Eastern North Carolina Now

     Publisher's Note: We do very much appreciate this fine article on the BRHS debacle from our friends at the Beaufort Observer. It is the opinion of this publisher that their continued, complete reporting and analysis of this controversial issue is unparalleled in scope.

    We have learned very quickly how University Health Systems intends to operate the Beaufort Regional Health System (UHS). Secretly.

    Included in their "Letter of Intent" (LOI) which has already been signed by Alice Mills Sadler on behalf of BRHS and Dave McRae for UHS is a provision (#7) that "The Parties shall continue to adhere to the Confidentiality Agreement executed by the Parties in or around June, 2010." It goes on to say that the LOI itself can be made public but apparently that is all the public will be able to see about the transition to and the operation by UHS, notwithstanding that subsequent to June, 2010 the BRHS had no problems releasing whatever we asked for.

    So last week we made a routine request for information. That information was to review the "scoring" of the "final" UHS proposal by the Chief Financial Officer of BRHS that had been asked for by Commissioner Hood Richardson at the time the BRHS board voted to recommend UHS to the County Commissioners. Richardson stated at that time that he was not prepared to vote on any agreement until he could see the numbers. Because UHS had revised its original offer the CFO agreed to provide that scoring "within a couple or three days." That was several weeks ago. So when we heard nothing about the information having been presented to the Commissioners we ask County Manager Paul Spruill about it and he referred us to the Hospital. So we made the request of Pam Shadle. Her usual prompt response was that she would see if she could find it and forward it to us. We waited a week or so and asked again. Here is the communication:

From: Webeditor [mailto:webeditor@beaufortobserver.net]

Sent: Mon 1/24/2011

To: Pam Shadle

Subject: Revised UHS proposal

Pam:

Can we get a copy of Dick's scoring of the revised UHS proposal?

Thanks

*******************************************

From: Webeditor [mailto:webeditor@beaufortobserver.net]

Sent: Thu 1/27/2011

To: Pam Shadle

Subject: Insurance

Pam:

Can you find out how much the hospital is insured for. (what is the amount of coverage)?

Thanks

************************************

From: Webeditor [mailto:webeditor@beaufortobserver.net]

Sent: Saturday 1/29/2011

To: Pam Shadle

Subject: Scoring UHS proposal

Pam:

I hate to be a pest, but we need to make Dick's scoring of the "final" UHS proposal public with enough time for potential speakers at the public hearing to have the information to prepare their comments with accurate information.

What's it looking like?

And the insurance coverage is going to become important so we need "accurate info" on that ASAP.

Thanks

************************************

From: Webeditor [mailto:webeditor@beaufortobserver.net]

Sent: Monday, February 07, 2011 8:56 AM

To: Pam Shadle

Subject: What's up

Pam:

Have you/Dick forgotten our requests (for the scoring of the UHS "final" proposal) and the insurance coverage BRHS has on its facilities?

**********************************

Today (2-7-11) we received the following reply:

From: Pam Shadle

Sent: Mon 2/7/201 11:13 AM

To: Webeditor

Subject: What's up

The Letter of Intent is now the guiding document for this stage of the process. And as the LOI states confidentiality must be strictly enforced.

Pam Shadle

Director of Marketing and Public Relations
Beaufort Regional Health System
252-975-4134 (office)
252-945-3806 (cell)
pshadle@brhealthsystem.org

    In the event the information we were asking for is not obvious here is what we were seeking. The "scoring" is as had previously been done on all of the proposals submitted, including UHS's original proposal. Because each proposal deals with specific elements of accounting, such as Accounts Receivables, Accounts Payables, working capital, the value of certain properties after due diligence was done, and other assets and liabilities the "bottom line" of the final deal cannot be accurately determined without know this information.

    For example, we know that outside contractors have been working on collecting receivables (what is owed the Hospital), and we know that another contractor has been working on improving the reimbursements from Medicaid, Medicare and insurance companies. But the public does not know how successful that effort has been. Thus, it is quite possible that UHS will reap a windfall from those activities that they could 'pocket' without factoring them into the "net" that will be paid the county. And those amounts could be quite substantial, in the hundreds of thousands of dollars, if not millions.

    The purpose of requesting the amount of insurance coverage was two-fold. One, given the financial condition of the Hospital we wanted to know if the insurance had been kept in force. Secondly, we wanted to know what the insurance value of the property is for purposes of comparing that to the $10 million UHS proposes to pay in its end-of-lease option to purchase. So we assume it is substantially more than $10 million today and that is why they are trying to hide it.

    We'll have more on this later.