David Orcutt, the chief executive officer of Lake Granbury Medical Center, made a surprise visit to the Somervell County Hospital Authority Board meeting last week and again made the case for working with or partnering with Glen Rose Medical Center.
His appearance came during the public comment part of the board's regular meeting. The board then heard a proposal from the Community Hospital Corporation to perform a detailed operations assessment of GRMC and possibly assist the nonprofit facility later in determining whether to partner with a large health care provider.
Orcutt was not invited to address the board, but apparently heard that members were considering a proposal from CHC and decided to show up in the time reserved for public comments.
After Orcutt's brief remarks, the hospital board heard two representatives from CHC make a lengthy presentation. The board voted unanimously to hire CHC to perform a detailed assessment of key hospital data at a cost of $9,500. The assessment is to begin immediately.
Orcutt urged the board to consider working with a sister organization, Quorum Health Resources, a competitor of CHC's that also provides an array of consulting services and manages and owns hospitals. He assured the board that Quorum would set up a “firewall” so that its assessment would remain independent and no proprietary information would be shared with Lake Granbury, an investor-owned hospital.
He called reaching an agreement with CHC “an awful big step” and one that often leads to partnering with the firm that does the assessment.
“It concerns me that you are doing an operational assessment without a competitive process and without an RFP,” or request for proposal, he said.
Orcutt said he believed the medical center should consider partnering with Lake Granbury.
“I think looking at that option is a good thing for Glen Rose Medical Center,” he said.
After making his comments, Orcutt left the meeting and was said to be talking with GRMC's physicians downstairs about his concerns and desire to partner with Glen Rose.
Orcutt declined to be interviewed. His administrative assistant, Karen Nichols, said in an e-mail response to a reporter's phone call that Orcutt gave his complete comments before the board.
Board member Ernest Reinke, who said he had visited with Orcutt in the past, said he had received information from Lake Granbury.
“But I feel more comfortable with these people,” he said, referring to CHC.
Board member Gary Whittle said he did not consider it necessary to get proposals from three or four different consultants.
In its presentation, CHC representatives Cindy Matthews, senior vice president of planning and market support, and Mike Bowers, vice president of operations and development support, said the company was developed in 1996 by 13 Texas hospitals, all not-for-profit.
CHS was founded because investor-owned healthcare systems were purchasing community hospitals, Matthews said. It is a 509(a) support organization, a type of nonprofit.
“All of the financial assets stay in the community,” Matthews said. “We don't sweep cash into a corporation. We are there to support and serve.”
The new hospital board has said it wanted an independent assessment to help it carry out its fiduciary responsibility and assess the hospital's mission and vision, how it is doing and what it can do to prepare for the future.
During the assessment, CHC plans to evaluate key data about the hospital's day-to-day operations, including on-site visits.
Once it presents its finding to the board, the members will then decide whether and how they want to proceed with the next steps, including hiring CHC to consult on the medical center's “strategic vision and opportunities related to potential affiliation and partners,” as Bowers put it. The potential partners would include CHC.
The next phase of the assessment would cost an additional $30,000. Then, if the board wanted to hire CHC for additional strategic services, it would be billed on day rates and capped at $20,000.
For now, though, the board voted to start with the initial phase.
Board members said they made their decision to go with CHC partly because Quorum's costs were open-ended, while CHC's were fixed.
“We hear from the community that they're wanting an operational assessment,” said Bob Lancaster.
“They expect us to do this,” Reinke added.