Tulare’s hospital district board made public Tuesday night a slate of draft agreements between the district and Adventist Health, the district’s potential partner in operating Tulare Regional Medical Center.
The board plans to continue the discussion at its July 25 and schedule a special meeting for August 1; interested citizens can discuss the agreements at both. Additionally, an ad-hoc committee was formed to provide a review of the documents and recommendations to the board.
The agreements include:
- An interim Management Services Agreement between Tulare and Adventist until voters approved Adventist’s lease of the hospital
- The potential lease agreement between Tulare and Adventist,
- The potential asset sale agreement between Tulare and Adventist,
- A credit arrangement between Tulare and Adventist,
- A security agreement that would pledge collateral between Tulare and Adventist,
- A short form deed of trust and assignment of rents.
During the meeting, one question from the crowd drew significant discussion: could leasing the district’s property to Adventist Health, a faith-based healthcare organization, and allowing it to operate the hospital until the lease was approved, run afoul of the 1st Amendment?
Religious Questions
Barry Caplan, a Porterville resident, noted that Adventist Health was a religion-based organization and added that Andrea Kofl, Adventist’s President of the Central Valley Network, described the organization’s care to the Voice as “Christ-centered.”
Leasing the hospital to a religious organizations, and/or allowing it to operate the hospital until the lease was approved, could prove to violate 1st Amendment restrictions on government entities favoring one religion over another, he said.
“I have engaged in an online discussion with a gentleman I have good faith reason to believe works for the IT department of Adventist, and he has explained to me that meetings of management and others often begin with prayers. This is one specific way in which the facilities that the District owns and benefits financially from the lease from will entangle you with religion,” Caplan said. “This is not a statement about the quality of care that will be provided. The constitution does not make exceptions for ‘unless the service is good enough.’”
Todd Wynkoop, an attorney for the board, said that the hospital would not need to worry about those religious issues because it would lease the hospital to Adventist and effectively not have any involvement in Adventist’s Tulare operation.
“There are churches built on leased county land,” Wynkoop said. “Because of this being a lease, you are not operating this facility. You are only owning the land under the facility.”
He went in-depth: the district currently owns and operates Tulare Regional. Once it leases the facility, it will cease to be operated as a public hospital.
“Tulare Regional Medical Center will no longer be a public hospital,” he added. “It will be a private hospital owned by Adventist Health, leasing land still owned by the district, which the district is receiving revenue from.”
Wynkoop said that it was his opinion there were no 1st Amendment issues and that he could write a memo advising the board of the same; but, given the complexity of the issues involved, such a memo could cost $20,000.
“As an attorney at McCormick Barstow, I’d really like you to pay me $20,000 to write that memo,” Wynkoop said. “But as your counsel, what I’d tell you is it’s not $20,000 you should spend.”
He said that during the period between the hospital’s re-opening and Adventist assuming the lease, it would be “wholly appropriate” to ask Adventist to operate the hospital as a secular institution.
“We have not had that discussion,” he said.
Caplan also asked whether Adventist would potentially decline to serve certain groups of people — such as LGBT individuals — or decline to provide mental health, birth control, or other services.
Randy Dodd, Adventist’s Vice President of Business Development, was on hand at the meeting to respond to those concerns.
“I think like many hospitals in our country, we have a religious foundation. There are Catholic hospitals, there are Methodist hospitals, there are Adventist hospitals. We do not turn people away because they don’t share the same faith that we have. In fact, we work very closely with ministerial associations that allow all faiths in to our hospital to care for those religious interests of patients in the hospital getting medical care,” Dodd said.
“It certainly doesn’t change, if you will, the types of services that we provide to all people that come to our facility,” he added.
Responding to a question from the crowd, Dodd said Adventist’s services are only limited by the level of care that each of its facilities could provide.
“We’re not limited by religious directive, if you will,” Dodd said.
Interim Management Services Agreement
Adventist Health would initially administrate the hospital, according to the provided draft of the Interim Management Services Agreement. That agreement, once finalized, would govern until voters approve a November ballot measure that would allow Adventist to lease the hospital.
Under the terms of the agreement, Adventist would manage day-to-day operations of Tulare Regional Medical Center and provide an executive leadership team, including a CEO, CFO, Chief Nursing Officer, and vice-presidents.
The nonprofit would keep the net income earned while it was managing the hospital under the agreement, and take over billing/collection services as well.
Members of Adventist’s management team are already on the grounds of the hospital preparing for the reopening, Interim CEO Larry Blitz told the Voice last week.
“Adventist Health has a presence here at the Allied Building in Tulare, and we’re working with their point guard so to speak Randy Dodd, and almost everything we do we want to run by them,” he said. “Even though the district still has the responsibility to run the hospital until the vote happens, we still want to run things by them because we don’t want them to have to make any changes.”
“They’re there in good faith, dedicating a lot of resources to this project, and we’re basically working with them on a minute to minute basis for them to have the kind of data they need, and us to get the kind of support we need,” he said.
Meetings were being held to discuss needed repairs, salary structures, benefits structures, recruitment, and staffing needs, Blitz added.
If the ballot measure were to fail, and voters did not approve Adventist’s lease of the hospital, its management would end November 30. Day-to-day management of the hospital would revert to the district.
Lease Agreement
That lease would be for five years, with five initial five-year increments, for a total of 30 years. Requirements in the lease would force Adventist to keep the hospital as an acute care hospital throughout the term of the lease, ensuring that acute care services could not be abandoned for more lucrative, or convenient, forms of operation.
Under the agreement, Adventist would pay a fair market value rent, increased yearly to account for the Consumer Price Index — a measure of inflation.
The first year’s rent would be entirely offset against repayments on a $10m loan that the nonprofit would provide Tulare. The second year’s rent, and each year thereafter, would have 50% of rent payments offset against the loan.
The draft agreement provided to the public also allowed Adventist the option to purchase the hospital. Board President Kevin Northcraft said it wasn’t part of their original pitch to the board.
“One of the things — our RFP process in which Adventist Health responded made no reference to the sale of the hospital,” Northcraft said. “We’re in discussions to try to resolve that issue — don’t panic over the feeling that we’re losing our hospital.”
Another key provision relates to the perpetually-stalled hospital tower expansion: if the tower wasn’t finished within 10 years, and/or the hospital was not considered seismically compliant on or before January 1, 2030, Adventist could exit the agreement with 270 days’ notice.
If the board accepted a loan from Adventist, and/or entered into the Interim Management Services Agreement with the nonprofit, and the lease was not approved, Wynkoop told the board that certain consequences would result.
“Adventist [would] no longer operate the hospital [under the Interim MSA], the line of credit becomes due in five years, and operation and liability responsibility reverts to the district,” he told the board.
“So, we have a short reopening and closure of our hospital, among other things,” Northcraft responded.
Xavier Avila, a member of the board, said that he wanted to impress upon the public the importance of the lease being passed.
“It’s vital that this lease gets passed, overwhelmingly, on November 6,” Avila said.
“Another key provision relates to the perpetually-stalled hospital tower expansion: if the tower wasn’t finished within 10 years, and/or the hospital was not considered seismically compliant on or before January 1, 2030, Adventist could exit the agreement with 270 days’ notice.”
Another bond is coming for sure. While it is necessary to make the hospital seismically compliant,the concern would be how this money will be managed considering what happened in the past. We are still in the dark of how that money was spent. The board proved to be in favor of Adventist, but there’s an underlying push also for us to pass another bond. They will give us the bacon ( to reopen the hospital) and we will need to pass another bond….and then where the money will go to next is unknown.
The property owners really need to rise up in anger! How many more bonds are we supposed to accept? Welfare beggars don’t care about the rest of us, sadly.
Well, I am the person in the IT department that made the mistake of discussing w/ Barry that Adventist Health does not discriminate against anybody no matter what race, religion, sexual identity, nor for any other reason. Everyone is treated the same.
Of course there will be another bond. The first Tower bond made clear that a second would be needed to complete the Tower. The bond money was gone before HCCA came in and if the community had backed the bond measure your hospital wouldn’t have closed and you would have a completed Tower by now. But nooo, a small group of folks rallied up and stopped that, so now you have paid more to Wipfli, a closed hospital, which will never be public so it won’t qualify for State subsidies and your still facing a bond. What have you accomplished? Nothing. You will have a terrible contract with AH, and really probably with anyone cuz the risk is great, good job Tulare. Meanwhile the rest of us suffer with our over impacted hospital that we pay for through our district taxes. Stupidity is so rampant you can’t get out of your own way. Gone on for decades
So explain to me how the bond money was gone before HCCA took over? Well then how do the bank records reflect $700,000 being withdrawn by Benzeevi? Fake news? Seriously.
Linda, what proof do you have that $700,000 was withdrawn from HCCA? The bond was spent and gone before HCCA. Have you thought about why over a year of investigation by DA and truck load of money was spent for the investigation and no crime is being discovered by HCCA? Following the money trail from the bank statements should have revealed something by now. The DA should also really look at where the bond money went after it was passed.
EH–
The truth will come out why all this nonsense happened. It will just take time. Sometimes I wondered what really drove these supporters to close the hospital in the first place. Oh… I forgot, HCCA charged too much and stole money from the community. No crime is being discovered, and Wipfi is costing a fortune while the hospital is closed, now the hospital is going to be privately run, and the bond will still need to be passed. Maybe these people are getting a kick back from Adventist and this is the true reason for all of this fiasco in the first place
Check the $700,000 withdrawal with the DA. He did make the statement that that was the amounts taken out by HCCA! Believe it was at the hospital meeting he stormed out of when people were booing him just prior to the election!!
Adventist Health has a remarkable reputation. Lets take a look at Adventist Health Bakersfield for example; They built a state of the art Cancer center, Out patient Surgery center, Breast Center, Quest Imaging and the Adventist Health Physician Network. Adventist Health Bakersfield is the only hospital in Kern County ranked in the top 5% in the nation for overall care three years in a row. The most 5-Star quality Awards in the region They have expanded to Tehachapi, where they faced challenges with the opening of their new facility given that the district also had their own challenges. Now, they are a few months away before opening their doors to a new hope for their community. They are committed to High Quality Care.
The Tehachapi new facility was to open in 12/2016 and still isn’t open. they are still working out of old buildings
Do you mean that it can be compared to Mayo Clinic and Cleveland clinic , do you read newspaper , it was ranked lowest to lowest in ranking in consumer report. Most of the chiefs cannot be credentialed in Kaweah Delta , let alone to CRMC , it must be made mandatory for the board members that they must be treated in new Tulare hospital. I feel why we are punished for living in Tulare for such substandard care for wrong decisions taken by incompetent board.
The board is planning to wash their hands of it and not be responsible for the care at the hospital. They only care about it opening and have no idea what they are doing to Tulare. We are destined for low quality care with the same players back in place. Just whsaw n you think everything can change it just stays the same.
One concern was that TRMC was favoring one religion over another. TRMC asked Dignity Health for a RFP proposal. Disgnity Health is Catholic, so no preferences here.
Mr. Christenson,
Thanks for your comments. It appears you don’t understand my concerns, so let me elaborate a bit.
The concern is not that Adventist discriminates internally, although clearly by their own words, they do favor religion over non-religion, and their 7th Day Adventist vision of Christianity over other faiths.
Your comments to me didn’t make me aware of this, they only affirmed local details and implementations. There’s plenty more on Adventist’s own web site, so if you feel concerned you spoke out of turn about proprietary information, don’t worry, you didn’t.
As a private organization, that’s their right to discriminate that way I suppose. In any case, they are not constrained by the First Amendment’s Establishment Clause. That clause applies only to public agencies and constrains only public actions.
The concern is that the Board is getting entangled with a faith organization, in the sense that the Founders themselves discussed as deleterious to the functioning of the government they set up and that we currently live under. There is no exception or provision for abandoning the rights of district members and patrons “if the agency is in a bind”.
That another faith organization was offered to participate doesn’t lessen the Board’s responsibilities, it increases them. Committing the same error twice doesn’t excuse the error.
Nonetheless, for whatever reason, Dignity chose not to participate, and so the Board will not be getting entangled with them. Their hypothetical further participation is moot.
You can be assured, in my discussions with Mr. Blitz, I certainly indicated that my concern would be the same regardless of the faith of the organization. It’s not a matter of which faith the board is entangling itself with, it’s that there is any entangling with faith and faith organizations at all that concerns me.
My advice to the Board was to look into this very carefully and be certain before creating a new crisis should the contract turn out to not be valid at all.
It’s possible I’m wrong, but they should have a good understanding of the Constitutional issue from Counsel before proceeding, or, failing that, the contracts should contain terms for unwinding the contract should it end on this basis later.
I’m waiting to see the next draft, same as others. In the end, it’s their responsibility to do the right thing, not the rushed thing. Rushing a contract is exactly how the previous board created this situation in the first place, right?
I hope this helps you and others understand my concerns more completely, so thanks for the opportunity to explain.
I’m not discussing this with you Barry. We discussed it before and I came up in the board meeting. You do not live in Tulare, you do not even live in our hospital district. Your questions were clearly answered in the meeting.
As I said before. I wish you the best.
They by law have to treat everyone who comes through their doors no matter their religion, color, race, gender, age etc. Just like they have to treat someone who doesn’t have the ability to pay.
I love that ideology– All man are created equal.
Well, we humans do not treat everyone as equal. What is in theory and what is in reality.
Please forgive my ignorance but why a bond that only property owners pay for? We know that a large percentage of the users of the hospital rent or lease in the district. Why not a sales tax and make every one pay for the tower?
I am not sure if anyone caught the remark that Senovia made that she had not had a chance to read all of the contracts and agreements yet. I thought to myself, “Well here we go again.”
It is beginning to look very similar. How could any of the board members read over 300 pages with 24 hour notice. It is becoming obvious that Northcraft is the commander and dictating all the moves.
As you talk to more and more people in the health arena this deal has been in progress for quite some time. Long before the date of May 16th that Northcraft continues to bring up.
Just tell people the truth on what this deal is and what it isn’t.
Not to change subject….. but what has Tim Ward been up too? Any word on Benny’s where abouts. Will there be a orange jumpsuit in his future? Or was the case dropped due to election results.
I am so glad you brought Mr. Ward’s name up. He was open about the resources he needed to complete his investigation of HCCA and hopefully Boluki squandering 84 million dollars, but now that he has been reelected, he is very quiet. What has happened to the investigation? When will the key players including the previous Board members be indicted? The community will not pass another bond without seeing where every penny is spent and who is going to jail for misappropriating the last 84M.
So they are once again handing over the keys. Norcraft said once they lease the hospital to Adventist, the board will have nothing to do with it. Sounds like a HHCA round 2 contract. The exact thing they said they wouldn’t do.
J, I understand the concerns everyone in Tulare has about “handing over the keys” and leasing the hospital to another chain. As an employee of Advensist Health, and a property owner in Tulare, Adventist Health is a very different company that HCCA.
We are a large and successful healthcare chain with a provable and documented history of success in bringing high quality healthcare, especially to underserved areas. HCCA has none of that.
It just looks to me that the board is so desperate to hand over their responsibility to another company. They can wash their hands once they hand it over and the district and citizens will have zero control going on forward. This is what Northcraft intended from day one? There is something that is driving him. Adventist may be better or worse, we just don’t know, but the idea of losing total control over our hospital is what the board wants? We are now forced with that as the only viable option. The next step to to pass the bond….and who knows who will really benefit from all of this.
This board is the one who bankrupted the hospital.
It gets better! Medsphere, the IT management company, just fired the IT manager because he refused to give Ed Humphrey, TRMC’s CIO and Thomas Grove, the acting CIO, administrator access into the email archive system. The IT manager was also the Information Security Officer. By eliminating him and his security oversight the CIO and acting CIO now have the ability to delete, change, or modify this very sensitive archive system. I think Medsphere, the IT company needs to be looked at closer.
In my dealings with the IT manager (Dan Sedano) I always found him combative and incompetent. Good riddance to that guy.
Is this happening so it will be convenient to define the future narrative. Let’s see – the bond was spent correctly and HCCA was just trying to do the best they could. The previous board was trying to do everything right, even though they didn’t understand they were responsible for safe care. Audit shows perfect books, DA files nothing.
Nothing criminal or abnormal here so please trust us with another bond as we put the same people in charge. No Thank You!