Danville Register & Bee - editorial
March 19, 2007
Danville Regional Medical Center missed a huge opportunity last week to silence some of its critics. It was a misstep that shouldn’t go unnoticed.
Last week, the hospital announced that it had received a “preliminary denial of accreditation” from the Joint Commission, a national health care accreditation organization.
Here’s what Danville Regional’s CEO, Art Doloresco, said about that in a hospital news release: “Danville Regional Medical Center is accredited today, and we have every intention to remain accredited. The hospital will continue to participate in the Medicare and other payor programs while it works to address the requirements for improvement. While we have considerable work to do, the Joint Commission was complimentary of the effort of our staff and physicians and our commitment to fulfill the mission of the Medical Center to provide excellent healthcare. We will work in partnership with the Joint Commission to uphold the high standards of safe, quality patient care.”
But when Doloresco was asked exactly what areas had concerned the Joint Commission, he told a reporter for this newspaper that it was a “private matter between me, the hospital and the commission.”
A private matter? Really? Danville’s only hospital has received a “preliminary denial of accreditation” and it’s a private matter?
LifePoint Hospitals Inc. has taken a lot of criticism in this community for not only its management of Danville Regional Medical Center, but for the sale of the hospital itself. In fairness, though, it’s not LifePoint’s fault the hospital was sold.
But everything that’s happened since the hospital sale was finalized in July 2005 is on
LifePoint, and here’s the opportunity that was missed. Telling the community what the Joint Commission found wrong during its on-site inspection, what was being done to fix the problems and how LifePoint would make sure this never happens again would have raised
LifePoint’s stature in the community it claims to want to serve.
Openness in the face of bad news builds confidence. In this case, it could have finally put LifePoint on the public relations offensive in Danville.
Calling the preliminary denial of accreditation at Danville’s only hospital a “private matter” will do nothing to improve LifePoint’s standing among the people it hopes to win over. It’s too bad LifePoint has missed an opportunity of this magnitude.
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16 comments:
Here's just another reason we should regain control of our hospital. Who knows? LFPT could be bought by someone who is worse.
Now Community Health (CYH - Cramer's Take - Stockpickr - Rating) and Triad (TRI - Cramer's Take - Stockpickr - Rating) have wedding plans.
Community has agreed to pay $54 a share for Triad -- topping a leveraged buyout offer of $50.25 a share for the company -- in a deal valued at $6.8 billion. Community, best known as a rural hospital operator, is now set to emerge as the largest publicly traded hospital company in the country.
"This deal will substantially increase [Community's] overall scale and enhance its geographic diversity," Community CEO Wayne Smith said on Monday. "This is a strategic growth opportunity."
Sheryl Skolnick, senior vice president of CRT Capital Group, thought Triad might attract another suitor. She has, therefore, maintained her buy recommendation on Triad's stock throughout a so-called go-shop period that has now drawn to a close.
Still, Skolnick was surprised by the latest development. She points out that Community could have chosen to bid on LifePoint (LPNT - Cramer's Take - Stockpickr - Rating) -- another rural hospital operator in its own neighborhood -- instead of seeking out a larger hospital chain in a different part of the country.
To Skolnick, LifePoint looks like one of few hospital companies that could still attract a buyer. HCA has already gone private in one of the biggest LBOs ever. Meanwhile, Health Management Associates (HMA - Cramer's Take - Stockpickr - Rating) has pulled off a financial restructuring -- complete with significant amounts of debt-- that essentially serves as a poison pill for would-be suitors. And Universal Health (UHS - Cramer's Take - Stockpickr - Rating) can pursue a deal only if its leaders, who control the company's voting stock, wish to do so.
Your points, plus the eloquent editorial from the Register, are why the men controlling the $200 million must be brought to the table. Considering our yellow-bellied leadership in this region (exceptions: Harville, Castiglione, Saunders and Tomer) the newspaper is our only hope. If they would make it a campaign to get the bank boys to the table with the money, and when that happens, the pay-off would be big for the paper--worth far more than all the goofy ads they have run for LifePoint.
Yes, to all the above! But you must consider all the advertising in the R&B done by American National Bank, Piedmont Broadcasting, Barkhouser Lincoln Mercury and Ford, Davenport Energy, First Piedmont, Holiday Travel and last but not least THE Institute. All of these plus the goofy ads amount to alot of advertising dollars. The editors are always telling me that reporting is separate from advertising. That is a CROCK full.
I
really do
NOT want to work for TRIAD.
Anyone else heard that the CFO is leaving?
I heard the CFO will be hitting the dusty trail soon.
Here's something the investors have said about LifePoint. Follow the link for similar issues at other LifePoint hospitals.
Danville Regional Medicare Center ("Danville"): Danville, acquired in
July 2005, is also performing below budget. Our understanding is that
the CEO initially hired by LifePoint alienated both the medical staff
and the community. Revenues have suffered as admitting doctors have
been boycotting the hospital in protest of the Company's actions. The
CEO of Danville, like the CEO at Valley View, has been replaced after
just a short tenure.
In addition, management has cited the local economy in Danville as a
reason for weaker than expected results. We do not think the economic
outlook should have been a surprise for LifePoint management. Dan
River, the area's largest employer, filed for bankruptcy in March 2004
and has been steadily laying off employees since then. Ironically,
Danville Regional Medical Center is the third largest employer. Given
that LifePoint planned significant personnel reductions as part of the
acquisition, it is surprising that they should be caught off-guard by
higher than expected unemployment in Danville. Dimon Tobacco, the
fifth largest employer, closed its factory, laying off 500 employees
in April 2005, over a month before LifePoint signed the Danville
acquisition agreement.
http://www.pharmacychoice.com/News/article.cfm?Article_ID=24597
The most striking revelation:
"Given that LifePoint planned significant personnel reductions as part of the
acquisition" probably explains the reason for their method of operation. Staff leaving was part of the plan, and the more they could force out, the less unemployment they had to pay. And as was stated earlier in this blog "They could merely say they didn't come in and slash and burn jobs, the folks in "dumbville" just couldn't handle change"
From the above it appears neither the boys at the bank or LifePoint did due diligence before signing the deal.
Earlier in that same letter from Accipiter to Lifepoint, there is an interesting note about Valley View Medical Center...especially in light of the recent Joint Commission inspection:
"Valley View Medical Center ("Valley View"). Valley View has been a second problematic de novo former Province hospital. Valley View was opened by LifePoint in the fourth quarter of 2005 and failed to receive Medicare certification during the inspection by the Centers for Medicare and Medicaid Services ("CMS") in January 2006 due to inappropriate staffing levels. Another CMS inspection scheduled for February 2006 was cancelled by the Company due to a lack of readiness and we believe no inspection is currently scheduled. As a result, Valley View is treating Medicare patients but not receiving Medicare reimbursement. Our understanding is that the hospital CEO appointed by LifePoint management only a few months ago has already been replaced.
Neither we nor our industry contacts are aware of any for-profit hospital company that has failed to be certified for Medicare reimbursement for such a long period."
Okay, did those who approved the sale NOT KNOW about this company's track record or just IGNORE it?
Either they didn't bother to look into LifePoint or $200,000,000 blinded them to what they had seen. As someone said earlier remember Ashby's quote to the paper...
"When the size of the affected population -- 130,000 -- is considered, the foundation can be considered one of the most influential per capita in the nation," Ashby said.
CFO is leaving...supposedly to go back to Colorado (he never technically left)to be with his wife who is recovering from several back surgeries. These surgeries occured a LONG time ago. No one seems to be upset by his leaving, hmmmmmm......
But, until we have GOOD CEO leadership, if we do get a good CFO, then it's for naught. A bad CEO will control the management and it won't get any better.
I know LPNT is worried about yet another change in management, but leaving the status quo is doing more harm than good. This is the opportunity for LPNT to stand up and say "we haven't gotten it right yet, but we believe we can, so we're going to keep looking until we find the RIGHT CEO."
Personally, I don't think it has anything to do with the CEO (Heck we've been through 5 or 6 - no company can be that bad at scouting talent). It all goes back to who controls the purse strings, LPT and it's investors. I am sure accredidation, community acceptance etc. means a little to them but the bottom line is "what's the stock price".
That is why hospitals have historically operated better as non-profits. The profits generated are windfall used to improve the facility, offer new services, attract quality employees (maintain ratios?), offer community wellness programs etc. Millions of dollars going to pay the upper management and to pay dividends to stockholders is millions of dollars that could be kept locally and spent in and around the facility.
"This is the opportunity for LPNT to stand up and say "we haven't gotten it right yet, but we believe we can, so we're going to keep looking until we find the RIGHT CEO.'"
Or, to be more accurate, the opportunity for LPNT to stand up in front of its shareholder critics (like Accipiter) and say "we are working on getting it right in order to protect your investment."
They aren't going to do it just because it's the "right thing" and gives us all a case of the warm and fuzzies.
CFO is leaving...supposedly to go back to Colorado (he never technically left)to be with his wife who is recovering from several back surgeries. These surgeries occured a LONG time ago. No one seems to be upset by his leaving, hmmmmmm......
Shame DRMC is losing such a nice guy, Dan Janicak! If you want to point a finger at him , don't. Dan's been very lowkey and "benign", background kinda guy. Too bad more people didn't get to know him.
As for ART...he's gotta go I agree.
More people didn't get to know him because he never came out of his office!
I'm sure he has seen the writing on the wall (bright man) and knows he had better make a quick exit before things become much worse (as they will soon).
Good luck to him!
Now, what about Arthur and Bill?
Who's sweating Bill ?
He'll be or do whatever he's supposed to do per the CEO....like a marionette.
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