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Has Pardee Management Lost Its Bearings?

When you spend much time talking with local leaders or ordinary citizens, the conversation turns soon enough to our county’s dealings with Buncombe, and no matter the issue, invariably the judgment is: “…we got rolled that time too.” People tell me they have a real concern that the “joint” venture between Pardee and Mission will only be another wooden end of the Popsicle for Henderson.

When I joined the Board of Commissioners (BOC), I found that Pardee’s management and trustees were rushing to enter into an agreement as a very junior partner to Mission. I say rushing, because every conversation with the trustees emphasized the need to finish quickly because of the amount of time already spent planning, never because they had a good business case or for any benefit to Pardee or the taxpayers who own it. (for a seat-of-the-pants technical view, see my year-old analysis of the demographic justifications claimed for the project below at “County Line Presentation”)

Roles and Responsibilities
A majority of the Commissioners insisted that the deal be renegotiated with our direction to make it a true 50/50 partnership. But Mr. Kirby says that two Commissioners “…are diverting the hospital’s time and resources by continually micromanaging this project which they claim not to understand.” This statement indicates that he seems to have absorbed the Justice Street misunderstanding of the proper roles among those who share responsibility for the hospital.
  • Mr. Kirby is employed through UNCH by contract with the Board of Trustees as CEO
  • The Board of Trustees (BOT) is appointed by the BOC to implement the BOC’s fiduciary responsibility for the $100 million county asset that Pardee represents. The trustees oversee the CEO and executive staff
  • The BOC, who have the only binding fiduciary responsibility, oversee the trustees.
That Commissioners duty of oversight includes asking questions and getting answers no matter how inconvenient and uncomfortable or diversionary the trustees and CEO find them to be. If their answers are not responsive to the concerns, the questions will continue. It is not a “diversion” to be accountable for ones actions, it is one’s duty, even if one would rather avoid the accounting and perhaps go to a newspaper to obfuscate and sow confusion.

I can only speak for myself, but I have never told Mr. Kirby that I did not “understand” the project. I have questioned with respect and courtesy; perhaps this has been judged as misunderstanding. If so I think I can disabuse Kirby and his friends of that notion.

The Venture
I have in fact grown more alarmed at each different version of the continually changing memo that passes for a contract between our hospital and Mission. Some of the changes we find are in fact acceptable responses to the concerns of Commissioners; that is well and good. But these are few relative to the tortured legalisms seemingly demanded by Mission. And why is it that Pardee leaders invariable reply to questions of why is: “…that is the way Mission wants it” and “they can do this without us”.

The truth is that by current law Mission cannot cross the county line without Pardee involvement. If they could they would, or as Mr. Kirby says: “Move 500 yards north if they want to…” and avoid the “complications” caused by the BOC insistence on doing its duty. The fact is Mission wants the venture to encroach on the business of our two hospitals here.

Our CEO says that we need to be in this venture to get Pardee’s share of the referrals.  He says that refferals are the key to survuval and pleads with us "...don't shut me out of the business in that area" because without it we can't survive.  He says that today hospitals must own the doctor practices. 

OK, granted.  But that means that in today’s environment Pardee employed doctors will refer to Pardee and Mission’s doctors to Mission. We will get the same referrals from that area whether our doctors are working out of the back of ’72 Ford truck, up on blocks and parked at a defunct Fletcher gas station, or in the $50,000,000 monument to an edifice complex being shared across the county line.

And if doctor referrals are the indispensable element and the key to the hospitals prosperity, how many doctor practices can Pardee buy, to get their referrals, for the $30 million or so proposed to be spend on bricks, mortar and asphalt?

It is just hard to fathom what reasons there can be for so desperately pushing this effort. For crying out loud the demand for endoscopy, the primary clinical reason stated for Mission’s part in this venture is not only not keeping pace with area growth or even remaining steady, but is falling in absolute terms.

A key bone of contention is the ownership of the real estate under the project. Mission simply refuses to settle on a simple 50/50 ownership by the partners directly. It has invented one twisted proposal after another to avoid simple joint ownership of the real estate, ostensibly to keep the BOC at arm’s length since they are politicians, you know.

When we ask why Mission desired this venture at all since the entire hospital is overseen by those same politicians, there is never a straight answer. And when your supposed partner will not agree to simple joint ownership of the key asset, he makes his view of the partnership chrystal clear.

Another Building – Soon?
While doing unrelated real estate research I accidently discovered, never mentioned by our hospital trustees or management, that Mission also owns another parcel of 9 more acres adjoining the original property to its south. To their (though tardy) credit the Pardee/Mission work group quickly disclosed that the nine acres would be just a “parking lot”…maybe a thousand cars worth…I wonder.

Then there is the other party. The one which will finance the first building’s construction, act as the landlord for all tenants including hospitals, collect the first money, the easiest money, and the most dependable money in the project; and collect a guaranteed fee. Why is Pardee/Mission so willing to pay the fees and give this up? Where is the financial analysis that demonstrates, without begging the question, the wisdom of the decision? And why is this project, primarily in Henderson County, not called “Pardee/Mission”?

It simply is not acceptable that our Hospital enter into an agreement that makes them less than fully equal in ownership by the same people who own the Justice Street assets. It is plain that Mission does not consider Pardee anything but a junior partner and tool to cross the county line in pursuit of completing its advanced health care monopoly in surrounding counties, which never at any time has been challenged by Pardee competing for the handful of facilities Mission has swallowed in recent years.

The Venture and Obamacare
Our CEO and trustees partly justify the venture by saying that Obamacare’s mandate will require that all hospitals get big. Does that mean Pardee must be disappear into the belly of the Mission?  Haven't we already got the best of what Mission can offer us through UNCH?  And more than half the state Attorneys General have sued on the mandate in Obamacare and this premise, and likely the whole oppressive law, just now hangs by a thread from the right hand of Mr. Justice Kennedy.

Monopolists, in a free society, plant the seeds of their own demise; they invariably minimize cost and maximize profit while quality and service to all suffers. The only way they can survive is by suppressing competition. Ask a veteran like me about the VA system. The joint venture is nothing more than a leash held by Mission to wrap Pardee in a web of legalisms that amount to ownership of decision making, and marginalize our central hospital as a competitor for later bite by bite consumption, and to circumscribe Park Ridge, our other great hospital in the north of the county. The health care of all hereabouts will suffer without the vibrant, free, three way competition among the medically superior facilities we now have.

Will We Be Rolled Again?
We are on the verge of being rolled by Buncombe again, just as with the airport and the north end water deal. We should never forget that if we say have been rolled, the mirror is the only place to find blame. We are responsible for contracts we sign. The citizens and voters expect nothing less of us. We hope many will be moved to add their voices to the defense of our hospital.

A few wise people in and out of the hospital business have quietly said to me that a Mission monopoly is inevitable, some even say desirable. My reply is, and I am confident that a BOC majority will join me to say; “Not on our watch!” It is up to us on the BOC to see that we, and our hospital, enter into none but equitable agreements, and no foolish surrenders to power like this one. It is also our duty to train up and encourage the next generation to, in their turn, take on the duty to protect our excellent, competitive, health care environment with three medically excellent facilities striving to earn our health care business and loyalty – by competing.



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