Accusations have flown back and forth since the board of trustees of Montrose Memorial Hospital announced on Oct. 15 that the county-owned hospital and its holdings would be leased for 50 years to a new nonprofit, Montrose Memorial Hospital Inc.
For five months, several members of the hospital board discussed the change among themselves, and the commissioners are enraged that they and the public were not included in the process or decision.
On Oct. 21, the board of county commissioners held a public hearing, demanding that the hospital board, which is appointed by the commissioners, explain themselves. But on advice of their attorney, the hospital board – with the exception of one – didn’t attend the meeting because of short notice.
Hospital board member Doris Van Ness didn’t speak at that meeting, but her attorney, Kirk Rider, said she knew nothing about the lease agreement before it was announced, and was not in on the planning to turn the hospital into a nonprofit. Rider said Van Ness would not serve on the new board of the hospital nonprofit organization, which the hospital board appointed from its own ranks.
Commissioner David White expressed the mood of his board at the meeting at Friendship Hall with about fifty people in attendance.
“They simply didn’t have the decency to notify us that they, and who else we can only speculate,” he said, had decided “to take it into the nonprofit sector.”
The lease transfer ownership from the county to the newly formed Montrose Memorial Hospital, Inc., could become official as early as Nov. 1, he said.
“The problem is a conflict of interest for a publicly owned hospital,” White said. “State law permits it, but the law is vague, and 50 years seems extreme.”
Commissioner Gary Ellis objected to the way the process evolved in secrecy.
“This is a radical change from the past,” he said. “Were Sunshine Laws observed? We believe in openness and transparency. Was there employee input? The community itself was not allowed in the vetting process.”
Ellis said the commissioners want to make sure that moving the hospital to nonprofit status is best for the community.
“When something like this happens, we have to be careful with county assets and public assets,” he said. “If we had been invited from the beginning we probably wouldn’t be here today.”
White added that the county budget has taken into account the possible passage of Amendments 60 and 61.
“Far be it from us to predict the will of the voters,” he said. “Apparently what was done was an end run around the voters, with all these unanswered questions and empty chairs.”
Amendment 60 would slash property taxes and Amendment 61 would severely limit the ways that state and local governments raise money.
Henderson also complained about the secrecy of the hospital board.
“I have been going to board meetings for the last two years and have not been been able to detect oversight,” he said. “It seems they got what they wanted to accomplish but are not able to explain what they did.”
Richard Harding of Olathe said that he had spoken with hospital administrator Hample as well as the hospital board’s attorney about the two ballot issues. He said the told them that Amendments 60 and 61 would most likely fail.
He also suggested an alternative: a special district with a board elected by the people, “not appointed by a few people.”
At one point, Montrose Library Board President Rob Ruyle, who said he was not defending the hospital board’s actions, said he had been a hospital administrator in Cumberland Md. Where the city-owned hospital was turned into a nonprofit.
“It worked beautifully,” he said. “The city retained ownership of the buildings and nobody lost anything. The hospital was able to borrow at a lower rate,” he said, because, unlike the new nonprofit, “the city couldn’t get a double-A ratings on bonds.”
Discussion continued about the hospital’s assets, including the Black Canyon Surgical Center and the San Juan Cancer Center, and how the 500 county employees who work at the hospital might be affected.
“I personally believe, reading between the lines, that it puts employees in a purgatory position, not knowing if they’re going to heaven or hell,” White said.
The meeting concluded with no action taken, but commissioners discussed firing the entire hospital board, for which they would need to give 30 days notice, too late to stop the transfer lease from going into effect.
By Monday of this week, the county board made a decision to file a lawsuit, a request for a court injunction to stop the hospital board from moving toward being a nonprofit instead of county owned.
“As the governing officials of Montrose County, the commissioners have a fiduciary duty to protect public assets and to consider input from all residents of the county,” stated a county news release.
After receiving the lawsuit, hospital board president Stephen Glassmann said the reason for secrecy in the process for changing the hospital to nonprofit was to protect the hospital budget in case Amendments 60 and 61 pass on Nov. 1, as well as other motives of the commissioners.
“First is the potential passing of 60 and 61, which would be devastating to the hospital,” he said.
Glassman also claims that commissioners Henderson and White are on record as looking into selling the medical facility.
“That’s another reason for doing it, taking it out of the political arena,” Glassmann said of the board’s maneuvering that has drawn the commissioners’ ire.
“We didn’t want to notify the commissioners ahead of time because they would have attempted to stop it or block it.”
According to state law, Glassman said, the hospital board acted within its authority. He cited Title 25 of Colorado State Statues, the Hospital Act, Section 3-3.13, which he said states: “The board of trustees may at its descretion rent or lease to a Colorado nonprofit.
“No approval was needed, so that’s what we did,” Glassman said. “This has been done in other places, like Cortez, Greeley and Denver General.”
County hospital employees are in favor of the idea, he said, and no one will lose their jobs or benefits.
“Readers need to understand there will be no change in services,” Glassmann said. Patients will ”check in like they always have and go and get treatments. HIPAA (patient privacy) laws still apply and patient records are safe.”
Another bone of contention between the county and the hospital board was a recent extension of the hospital’s contract with consultant management company QHR to 2015, which the commissioners criticized. QHR provides assessments of hospital quality control as well as providing top management officers, including hospital CEO David Hample.
Glassmann said QHR’s contract extension was reward for a job well done.
“This was done because of very significant levels of improvement in financial performance and clinical scores over the last two-and-a-half years,” he said. “We reward people who do good for us.”
Glassmann charged that Commissioner White “foams at the mouth” and in particular does not like QHR.
White said after the meeting that he doesn’t trust QHR, which Glassmann says manages more than 130 hospitals.
“They have quite a history of making money off the county,” White said at the meeting.
But Glassmann says it’s worth it.
“Yeah, we pay a lot of money to QHR for consulting services, but they give us some very significant services,” he said.
How the move to transfer the hospital to nonprofit status will play out in the courts is yet to be seen, but Glassmann said plans for the transfer lease will proceed.
“We’ve had too many people from the community tell us what a wise, good move this is,” he said. “It seems like a lot of the community supports this move.”