OHA details purchase plan of MCMC; Adventist to keep reproductive health care in TD
By Tom Peterson
A recent publication of documents detail Adventist Health Systems’s plan to purchase Mid-Columbia Medical Center, according to the Oregon Health Authority (OHA) website.
If the deal goes through, Adventist will own Mid-Columbia Medical Center. Adventist Health has promised $100 million in investment into MCMC over a 10-year period.
Click to expand. This organizational chart provided to OHA shows that MCMC will come under the control of a California 501(c)(3) or nonprofit headquartered in Roseville, California. Stone is solely owned by Adventist.
Stone Point Health is a California 501(c)(3) public benefit corporation. It is solely owned by Adventist Health will take ownership of MCMC. The governing board of Stone Point Health is the same as the Corporate Board of Adventist Health, according to Adventist Health System/West CEO Todd Hofheins.
“Through this business deal, Adventist will become the new owner of MCMC,” according to the notice summary posted by OHA “...Adventist says that MCMC will continue to provide its existing health care services, including reproductive health care.”
“Adventist plans to invest $100 million in MCMC over ten years to improve facilities, recruit more doctors and expand clinic services. The notice states that Adventist will continue and enhance resources to assist patients who cannot afford to pay. Adventist and MCMC expect that the deal will provide better access to services and improved health outcomes for the community,” the OHA notice states.
OHA is currently in the middle of a 30-day review of the deal to understand how it could affect the cost and quality of health care, access to services, and health equity.
OHA and The Oregon Department of Justice must sign off on the deal.
During the review, OHA is using health care data, news and media reports, information from the companies, and input from the public to decide whether the deal should be approved,” the notice states.
OHA is expected to make a decision this month.
Much of the information gathered in the review is posted on the OHA website here.
Public Comment
The information also includes public comments as well as those from Oregon Federation of Nurses & Health Professionals and SEIU Local 49, Cascade Aids Project, Basic Rights Oregon.
Of the 50 comments received 18 were against the merger, 17 were in favor and 12 did not say specifically.
Concerns centered around current management, religious affiliation and the ability to access care.
“This deal would ensure that the only two hospital systems in the area would be faith-based. There are many people in our community (LGBTQIA2S+, BIPOC, those accessing reproductive healthcare, those accessing end-of-life care) who feel uncomfortable or even unsafe in Christian/Catholic faithbased settings and deserve to have access to a secular option for healthcare,” was a common refrain in 16 comments.
Others pushed for the quick approval of the purchase to help stabilize MCMC.
“With this merger I feel that we can continue to have the access to healthcare that we need and hopefully open back up what we have lost the last couple of years. We need a bigger pool of providers that a larger organization can afford us,” came one comment.
Unions not in favor
“... our coalition noted that the number of independent hospitals in Oregon had declined from 28 to only 16 since the year 2000. We worried this trend would accelerate because smaller, independent hospitals had been disproportionately financially harmed by the pandemic – and would be vulnerable to acquisitions by better-capitalized, larger health systems. The hope and intent was that the HCMO program would safeguard community interests in future transactions, according to SEIU Local 49, a union statement.
“While Adventist and MCMC describe this deal as only a net positive for patients, decades of research point to a different possible conclusion,” the statement continued. “When independent hospitals are acquired by large health systems, it often leads to: higher prices, reductions in essential services, lower wages for workers, potential service reductions, potential health equity implications, potential restrictions to care, potential challenges recruiting and retaining workers.”
More on Adventist $100 million investment
Additional details about the $100 million promised in capital investment as well as the construction of a future hospital were also available in an Adventist supplemental information letter.
Spending $100 million
”Adventist has agreed to invest $100 million in MCMC during the ten years immediately following the closing of the Proposed Transaction. The exact timing for allocation of this investment is subject to MCMC’s economic performance and prevailing needs. However, up to $6 million of the investment will be spent in the first two years after closing on those capital needs deemed most urgent by the President of MCMC and the Oregon Network President of Adventist. These needs include urgently-needed major medical equipment to be put into service on MCMC’s main campus,” reads the supplemental letter.
“A majority of the remaining portion of the investment—approximately, $94 million—will be used: (i) to revitalize and make long-term improvements to the facilities at MCMC’s main healthcare campus in The Dalles, (ii) to finance strategic expansions for the benefit of MCMC, (iii) to purchase equipment and information technology software or systems, or finance capital projects costing $500,000 or more, or (iv) to develop new healthcare facilities for MCMC. To identify specific projects on which the $100 million (or $94 million, as the case may be) will be spent, and to create a timeline for implementation of those projects, the parties have agreed to convene a capital committee. This committee, which will include representatives of the MCMC executive team, medical staff, and community board, is charged with devising a plan or budget for the allocation of the investment over the 10-year investment window. Adventist’s corporate board will have the ability to modify this plan.”
When will decisions be made about possibly building a new hospital versus refurbishing the existing one?
It has been reported that in late 2021, MCMC had plans to build a new hospital financed through a loan.
Why was this plan abandoned?
Several years ago, MCMC recognized the need to refurbish or replace its existing hospital, which was originally constructed in 1959. The organization’s hope at the time was to be able to finance the needed construction through operating revenues, investment returns, and charitable contributions. MCMC initiated some preliminary planning and engagement with the community about the potential for a new hospital.
As it was considering its facility needs, MCMC’s net cash from operating activities declined to a negative $5.73 million in 2021, from a positive $28.2 million in 2020.
Net cash from investing activities fell to a negative $2.7 million in 2021, from a negative $2.46 million in 2020.
These financial results did not support immediate, debt-financed construction of a new campus. Confronting these access-to-capital and other financial challenges, MCMC concurrently evaluated whether to remain independent or to seek an affiliation with a large, stable, well-regarded, and like-minded corporate partner. After careful deliberation and consultation with affected constituencies, MCMC’s process led to the proposed affiliation with Adventist.
Decisions about whether and when to build a new hospital facility will now be made jointly by MCMC and Adventist. The parties have sought to inform this decision by engaging an experienced consulting firm to provide recommendations. While it is premature to identify a specific date when the parties will make final decisions about which capital projects to undertake, existing agreements commit the MCMC capital committee to presenting an investment plan or budget to Adventist for approval within eight months after the closing of the Proposed Transaction.
