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AG forum on Bell Hospital sale draws crowd, questions

September 25, 2013
ZACH JAY - Journal Ishpeming Bureau Staff (zjay@miningjournal.net) , Journal Ishpeming Bureau

ISHPEMING - More than 50 people, most of them Ishpeming area residents or Bell Hospital employees, attended a community forum on the proposed sale of Bell to LifePoint Hospitals hosted by lawyers from the state Attorney General's office Tuesday night.

The forum began with an overview of the sale and comments from Bell and LifePoint executives, who saw the sale as very positive for both sides and expressed their commitment to continue providing a "community-based approach" to health care.

"We are excited at LifePoint about the prospect of becoming a part of this Ishpeming community," said Bill Carpenter, chairman and chief executive officer at LifePoint.

Article Photos

More than 50 Ishpeming area residents, Bell Hospital employees and others attended a community forum on the proposed sale of Bell to LifePoint Hospitals. The Tuesday night forum was hosted by lawyers from the state Attorney General’s office. (Journal photo by Zach Jay)

Carpenter attributed LifePoint's success at the company's 57 hospitals in 20 states to recognizing that each hospital and surrounding communities have unique needs.

"I think that we have been successful at LifePoint ... because our approach is to listen first to the needs of the local community and then to help respond to those needs," he said.

Carpenter said that, based on the turnout at the forum Tuesday night, he can tell how strongly the community feels about the hospital - which he believes will help contribute to LifePoint's success.

"Because you are so passionate about your hospital, we understand that we can be successful here," he said.

For Bell, the decision to sell was made after the hospital had struggled financially in recent years. As part of the sale to LifePoint, co-chief executive officer Gerald Messana and board of directors chairman Robert DellAngelo said LifePoint will pay off all of Bell's substantial debts.

Messana said that due to "significant operational issues," Bell had reported three years of operational losses totaling more than $10 million, had an unfunded pension plan of more than $4 million, a broken revenue cycle and building debt of more than $30 million.

Their account had been turned over to an asset restructuring banker, he said.

"So we were in some pretty significant trouble," Messana said.

DellAngelo said the hospital's first option was to try to find financing to help with the hospital's debts, but without many financing options, they then put out requests for sale proposals.

"With our financials being what they were, realistically getting financing that we could afford was just not an option," DellAngelo said.

Proposal requests were sent to 13 different companies. For the two proposals received, DellAngelo said an eight-person task force conducted "reverse due diligence" which involved inspecting LifePoint's other hospitals and speaking to staff. The task force - which DellAngelo said included four physicians - then unanimously recommended choosing LifePoint's proposal.

LifePoint has committed to providing $5 million in capital investment at Bell over the next decade. Proceeds from the acquisition will be used to eliminate Bell's debt with all remaining proceeds - estimated at approximately $1 million - will be used to fund a locally-governed charitable foundation to support health care needs in the community.

Some of those present at Tuesday's forum, while not opposed to the sale or to LifePoint as a company, had objections to the $1 million being given to establish a community fund - saying that it wasn't enough.

"To be told that a million dollars is sufficient for the foundation to become the compliance organization that is going to have to monitor for 10 years LifePoint's compliance with the contract they've signed with the Bell Hospital board, when the attorney fees will eat up 60 to 70 percent of that money - what does that leave the foundation to grant out to help the health care here on the west end of Marquette County?" asked Mike Prusi, a representative of the Western Marquette County Health Foundation (formerly the Bell Hospital Foundation).

An estimated $600,000 in "compliance costs" will come out of the community fund to ensure that LifePoint is honoring their contract with Bell.

Prusi said that in light of this, as well as the approximately $7 million of in-kind donations given by the community to build the new Bell facility, the $1 million community fund is inadequate.

Optometrist Ron Meyer agreed and implored "LifePoint and the attorney general to make the (foundation) amount comparable to what the community donated 10 years ago."

DellAngelo said that they would all like to see more money, but argued that because the money was spent on Bell's new hospital facilities, and those facilities will still be in use, the community hasn't lost their investment.

"I think we all committed that money to basically have a quality hospital in our community, and I don't see where LifePoint owning it changes that," he said.

Carpenter called the million dollars "not a small amount," and said that he hoped the funds could be added to in the future to continue to provide help in the Ishpeming area to those in need.

"We certainly understand your interest in the funding for the foundation," he said. "We recognize the vital role that the Bell Foundation - now the Western Marquette Community Health Foundation - has played in ensuring the success of the hospital to this point."

Bell Hospital officials said their primary concern is keeping the hospital "viable."

The sale is expected to be finalized by Nov. 30, pending the approval, or absence of any objections, from Michigan Attorney General Bill Schuette.

The attorney general protects "charitable assets," such as publicly-owned hospitals, under common and state law, and must determine that the sale price is fair and that Bell and its assets will not be used or misused for "private benefit."

Zach Jay can be reached at 906-486-4401. His email address is zjay@miningjournal.net

 
 

 

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