Public discussion delayed, letter outlines advisory group’s position
Negotiations over a new lease for Carolinas Medical Center-Union are progressing slowly, county commissioners say, with details changing too often to discuss anything in public. Meanwhile, a letter to commissioners from their negotiating team at Kaufman Hall questions if the goal of Carolinas Healthcare System is a new lease or to buy the hospital from the county.
In a June 1 letter to commissioners, Kaufman Hall Senior Vice President Mike Finnerty and Vice President Stephen Sellers question if CHS is in fact interested in a new lease.
“Through our discussion, we believe that the principal objective of CHS in restructuring the existing relationship is to fully integrate CMC Union from a clinical, operational and financial perspective into CHS,” the letter reads.
Currently, Finnerty said in the letter, discussions between his group and Carolinas Healthcare System have revolved around the issue of revising the lease so that it both meets CHS objectives, while ensuring the hospital remains an asset of the county.
“We’ve committed ourselves that we will not sell the hospital,” Commissioner Jonathan Thomas, the board’s liaison to the negotiations, said. “Whether or not we can strike a deal with CHS, that’s up to CHS, it takes two interested parties.”
CHS Executive Vice President Dennis Phillips declined to comment on the letter from Kaufman Hall, saying it was not appropriate for the group to discuss advice or counsel the county receives.
“We are hopeful that current discussions will ultimately lead to an extension of our current lease agreement, that has more than eight years remaining, on terms that are acceptable to county government and CHS,” Phillips said.
The county owns the hospital building and property at 600 Hospital Drive in Monroe and contracts with Carolinas HealthCare System to operate the facility. That contract expires in 2020 and has been the focus of debate in the past two years. The previous county board had considered selling the hospital property to pay down the county’s more than $600 million debt.
But that board suspended the contract with Kaufman Hall after May’s primary election, in which Jonathan Thomas, Jerry Simpson and Todd Johnson won the Republican nominations for the commission. Seeing that as a rejection of any sale of the hospital, the previous commissioners suspended the contract so the new board would be able to take control of that decision.
It’s unclear exactly how much the county could get from a sale because of the time left on Carolinas HealthCare’s contract. Any buyer would have to either keep the current lease or negotiate with the health-care system to break it. Sale estimates range from $178 million to $280 million.
In 2008, the hospital group came to the board with a $335 million deal to extend the lease through 2048. That deal would have injected $135 million in payments and $200 million in improvements to CMC-Union.
The county later discovered that $200 million included work already done at the hospital.
Not the time for public discussion?
Commissioner Kim Rogers placed the item on the agenda for the board’s Monday, June 6 meeting, wanting an update on negotiations.
“Unfortunately, I get phone calls and I can’t answer the questions because I don’t know,” Rogers said, pointing out there hadn’t been an update to commission members in months.
Saying it wasn’t the time to discuss negotiations in public, commissioner chair Jerry Simpson requested the item be pulled, which it was by a 3-2 vote. Rogers and fellow commissioner Tracy Kuehler were in opposition.
“One of my primary reasons for running was the hospital and the citizens who voiced concern over its future,” Simpson said. “Early on, I placed my trust in Jonathan to serve as liason to our board. On every occasion when I’ve had questions, he’s responded with an update.”
Simpson said that he believes at a time that both Kaufman Hall and the county’s legal team deem appropriate, details about the negotiations would be presented to commissioners.
“Any public discussion this evening would have been premature,” Simpson said.
Thomas said there’s nothing in writing currently, but if the two groups can find middle ground, then a deal could be made. Officials from Kaufman Hall agreed, saying in the letter they believe a deal could be reached.
“Although we have not received a proposal from CHS related to a potential lease renegotiation, we believe based upon our discussions to date CHS understands the goals and objectives of the county and is interested in submitting an updated lease proposal,” the letter reads.