WVHCS officials: Sale offers best prognosis for system

By Andrew M. Seder aseder@timesleader.comTimes Leader Staff Writer

EDWARDSVILLE – John Newman, 65, of Dallas, underwent quadruple bypass surgery at General Hospital in 2007. He said the care he received was top-notch, and the experience led him to testify Wednesday at a hearing that is part of the process of selling the hospital and the rest of the Wyoming Valley Health Care System.

Before he spoke, Newman listened as WVHCS officials described the financial straits the county’s largest health care provider has been operating under and pledges that for-profit Community Health Systems Inc. is the best choice to assure continued and improved care.

“After listening to (hospital officials), they did not present a very optimistic future for WVHCS. I believe (the health care system) is a quality organization, and I believe they are the right organization to continue what we have now,” Newman said.

Before Wyoming Valley Health Care System officials agreed to sell to a for-profit hospital operator, they entertained options including merging with nearby health systems.

After ruling out combinations with Williamsport-based Susquehanna Health and Scranton-based Community Medical Center, both nonprofits like WVHCS, the board turned to the for-profit Community Health Systems Inc.

That deal, if approved by both Luzerne County Orphans Court and the state Office of Attorney General, could be finalized by June 30, according to WVHCS spokesman Kevin McDonald.

Officials spent a portion of Wednesday’s two-hour hearing explaining the “whys” of the proposed sale, but some of the nearly 250 people in attendance wanted to know more about the “whats” of the deal.

Specifically, what will happen to care for the indigent and uninsured; what will happen to the associated programs offered by the system, including Choices, Heritage House and the Visiting Nurses Association, and what happens if the deal doesn’t go through.

The hearing, conducted by the Attorney General’s office at the WVHCS-owned Thomas P. Saxton Medical Pavilion, gave the public a chance to ask questions, learn some of the essential details of the proposed $271 million sale to Franklin, Tenn.-based CMS or voice concerns about the transaction.

What those in attendance learned was that the WVHCS board started looking at ways to access capital in 2007. Three choices were put on the table: receiving an infusion of funds from Blue Cross of Northeastern Pennsylvania, issuing more debt, or merging with another regional health care system.

At first, “a sale was not on the table,” said Rusty Flack, chairman of the WVHCS board. But as the board looked into its options, selling the system emerged as the best option. Nine buyers indicated an interest, with only one of them being a not-for-profit entity.

The list was whittled down to five, with four making serious proposals. It came down to two finalists: CHS and Legacy Hospital Partners, based in Plano, Texas.

Flack said the board received a higher offer from Legacy, but there were things about CHS that it preferred. CHS was asked to increase its bid about $5 million, and it agreed to do so.

CHS also agreed to other guarantees that the board felt necessary to continue the WVHCS mission of community care for everyone and to providing the best health care facilities.

Under the terms of the deal, CHS would commit $135 million in capital improvements within the Wyoming Valley Health Care System over seven years if it is able to acquire the health care organization.

It also promises to maintain indigent care policies for 10 years, offer employment to all current staff members and to operate Wilkes-Barre General Hospital and First Hospital with the same mission currently in place for the next five years.

Each of those was something Flack felt was vital for any deal to take place.

Placing time frames on guarantees didn’t make everyone happy.

Vince Kabacinski, executive director of VISION, a homeless outreach and shelter in Wilkes-Barre, said the homeless, indigent, uninsured and underinsured need to be represented and promised they’ll be taken care of, not for a few years but for as long as care is needed.

“Homelessness and poverty is not going away in 10 years,” Kabacinski said.

There were also concerns raised about the fate of hospital-supported programs such as Heritage House, the Visiting Nurses Association and Choices. While there are no guarantees that they’ll be kept open once the transaction goes through, WVHCS Chief Operating Officer Maggie Koehler said the same would be true had the system not gone up for sale.

But Flack said he doesn’t see those affiliated programs automatically ceasing to exist once the ink on the agreement is dry.

Marty Smith, president of the CHS division that includes nine hospitals in Pennsylvania, said indigent care is mandated by federal laws and is offered at other CHS facilities. He said the continuance of other programs would be determined by administrators at the hospital and the local board that will be established once the sale goes through.

He wouldn’t offer guarantees that all programs currently offered within the health system will be in place a year from now or 20 years from now.

“It’s hard to predict the future,” Smith said.

But Diane Kane, the stroke program coordinator for WVHCS, tried to.

“I know we’ve maximized what we can do at the present time with our current assets … to move ahead we need that financial support. We want to be more than what we are, and we can be more than what we are for the community,” Kane said.

She said the sale would help accomplish that.

Couldn’t attend?

It’s not too late to make your feelings known. Send written comments to: Charitable Trusts and Organizations Section, Office of Attorney General, Strawberry Square, 14th Floor, Harrisburg, PA 17120.

Or fax your comments to 717-787-1190 or e-mail them to jcoles@attorneygeneral.gov. All comments must be received by the end of business Monday.

Andrew M. Seder, a Times Leader staff writer, may be reached at 570-829-7269.