Mission Inhospitable | HCA, NDAs and For-Profit Healthcare

The Hospital Corporation of America purchased the nonprofit Mission Hospital four years ago in a deal shrouded in secrecy. Since then, hundreds of doctors, nurses and support staff have resigned. North Carolina’s attorney general has joined them in protesting what they see as an unflinching profits-over-people business model. 

The Asheville Watchdog has written many stories detailing much of the decimation of Asheville’s once-vaunted hospital. Recently, the Watchdog’s executive editor, Peter Lewis, wrote an extensive column that asks “What can be done?”

Lewis walks us through a purchase that, from every angle, appears nefarious. We talk about HCA’s anti-competitive actions and some missed opportunities to place certain quality-of-care guardrails on the sale. We also run through a range of ideas and options for influencing how HCA manages Mission Hospital.

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Transcript

Matt Peiken: What were your thoughts as a journalist and as an editor and how you begin even parsing out what the stories are here because there's so many how did you even begin to wrangle that?

Peter Lewis: My wife and I moved to Asheville in the end of 2019 and Part of the reason that we chose Asheville as a retirement destination was because of the reputation of Mission Hospital as one of the top hospital systems in the country And so it was quite a surprise when we actually landed here and I discovered the nonprofit Mission had been sold to HCA. In my career, I was a reporter at the New York Times and had come across HCA. Lot of the stories that we've recounted recently about their massive Medicare fraud settlements and various lawsuits around the country that sort of follow HCA around. And I wondered why the heck did they sell to Hospital Corporation of America?

And so being a Retired journalist, it was I started asking, like, how did this happen? And I was surprised when people said, I'm sorry, we can't tell you, which to an investigative journalist is catnip. 

Matt Peiken: And which is mind boggling, even at the, on the face of it, that HCA had this litany, this trail of past behavior and yet from your reporting and the watchdogs reporting, Barbara Durr has done great work on this, other journalists have done this, that it seems that this deal was in the bag, that it, like something happened, you said, how could this happen?

And years later, it seems like you don't have an answer. As to how this happened. We don't know fully how this happened, do we? 

Peter Lewis: We have a good inkling of how this deal happened. I started reading the Citizen Times, the local daily paper about the sale. Trying to figure out how the sale went down and how it was received in the community.

The sale happened before I arrived here. The actual handover took place in February of 2019. 

Matt Peiken: Yeah. And it was only a one and a half billion dollars to me. Look, I'm not in this industry, but that seems a pretty sweetheart price for that. Am I wrong in assessing that? 

Peter Lewis: Several economists have told me that trying to figure out hospital and healthcare valuations is a type of voodoo that requires a very specialized understanding of how hospital finance is done. The best that we can say is that the Attorney General's office and Mission both had investment firms look at the deal and they determined that HCA made a fair offer for Mission.

Matt Peiken: So the attorney general and others who might oversee this deal were looking primarily or exclusively at whether the financially this was a fair price? Were there other considerations brought to bear before this deal was allowed to go through? 

Peter Lewis: There's quite a history of it.

Going back to 1995, Mission Health was allowed to operate as a state regulated monopoly in western North Carolina. And that meant that they did have monopoly power for this region. But in 2015, Mission Hospital appealed to the state legislature to rescind that state regulation.

Which created a situation of all of a sudden you have an unregulated monopoly. And that took Place in 2016, I believe. 

Matt Peiken: That's really interesting that they were already allowed to have a monopoly, but a regulated monopoly. I can see why they would want to ask for no regulation, but why would anyone grant? Why were they allowed to have an unregulated monopoly? They were already given a regulated monopoly, which in itself seems like that goes against the grain of antitrust regulation, so what happened in 2015 -2016 to rationalize allowing Mission to no longer have to abide by regulations regarding this monopoly.

Peter Lewis: The overall trend in healthcare in the United States is to consolidation and growth. And I think Mission made an argument that apparently the legislature found compelling that the regulations on Mission prevented it from competing and getting the best deals they could from insurance companies and other things.

Matt Peiken: Okay. But they didn't have competition, right? They had a blessed monopoly in this region. Am I missing something here? What competition would they have faced in getting good deals from insurance companies? There were no other hospitals bidding or competing for these patients.

Peter Lewis: Right after the certificate of public authority, the monopoly legislation was rescinded. Mission tried to strong arm Blue Cross Blue Shield into reducing the rates that they charge Mission or to allow them to raise prices. And Blue Cross Blue Shield essentially rubbed sand in Mission's face.

I won't get into the psychology of it, but I think the people who were running Mission at the time felt that they needed to get a large partner in order to be able to negotiate better deals. 

Matt Peiken: So getting this large partner, is this where we're opening the door to the HCA, the monster of HCA? 

Peter Lewis: I went through 17, 000 documents that we received from the Attorney General's office under a public records request, and it was not an easy process to get those documents, because everything involved in this deal is cloaked in non disclosure agreements that even today lawyers say prevent anyone who was involved in the deal with talking about it publicly.

Matt Peiken: That in itself now I'm not a lawyer, I have no idea about this, but did the attorney general's office have any power at the time to say, wait, that doesn't pass the smell test. I'm not going to allow this deal to go through. If you're going to among many other potential considerations here, but why are you asking for NDAs? Was there a trail of red flags that the attorney general either overlooked or didn't have any power to do anything about anyway. If there were these red flags, who had any power to stop the Mission board before the sale from going forward with the sale. 

Peter Lewis: The negotiations with HCA were conducted in secret.

And so by the time the board approved the deal and announced that they were planning to. Do this sale that triggered the Attorney General's activation. The Attorney General is obligated to investigate the sale of any nonprofit corporation to a for profit corporation to protect the public's interest because the public for 133 years has been supporting Mission.

Mission didn't have to pay taxes. Thousands of people volunteered at the hospital to help it. Contributions from the community. The Attorney General's role is to make sure that in any sale of a non profit, that the public's interest is represented. 

Matt Peiken: So you mentioned that Mission in 2015 2016 sought and were successful in deregulating their monopoly.

They then felt they needed a partner to go forward in the business of being a hospital. You said there's a lot we know about why this sale happened. I still don't know why. You said so much is cloaked in secrecy. NDAs in perpetuity, despite the secrecy and the NDAs. What do you know about why this sale?

From Mission's standpoint, was it simply a Craven money grab? I don't get it. I don't understand why anybody on the Mission board other than CEO Ronald Paulus, within days of the closing of the sale, ended up working, joining the staff of HDA, right there, it's too late then, sorry we're closing the door on this deal, it's done. But, why would the Mission board go along with this? Because you say we know a lot, that goes to, what do you know there? 

Peter Lewis: After the Attorney General was notified of Mission's desire to sell itself to HCA, they began an investigation, and a very thorough investigation of the deal.

And they found a number of very troubling things about the agreement that the board had negotiated with HCA. They actually requested the opportunity to tell the Mission board about some of the concerns they had and they were not allowed to make that presentation to the Mission board. 

Matt Peiken: How can they deny the state attorney general?

Can the attorney general say if you're not going to allow me to do this, I'm not going to approve this sale. 

Peter Lewis: The attorney general has the ability to investigate, but not to stop the deal. If the board of Mission. It was determined to do it. So the board voted unanimously the first time to sell to HCA.

The Attorney General found a number of conflicts of interest. It determined that the contract that Mission had negotiated with HCA was lopsided in HCA's favor. And they went back and they told the Mission board they wanted them to know all of the conflicts that they had discovered.

And asked the board to vote again, knowing that there were problems with the deal. And the board once again voted unanimously to pursue the deal. At that point, according to the Attorney General, he had no authority to stop the deal, but he could issue conditions on the deal. And in fact, he did.

Fifteen different conditions. An example under the original contract HCA would have been allowed to close unprofitable services in Western North Carolina after five years. And the Attorney General said, no, it's got to be 10 years. So those conditions were added to the deal as a condition for him to issue a letter of non objection.

Matt Peiken: So he didn't really approve the deal, he simply couldn't. He abstained, in a sense, right? 

Peter Lewis: He did make the deal more favorable to the citizens of this region. 

Matt Peiken: Did any of these conditions stipulate anything about quality of care? No. Do you know why? As vocal as the Attorney General has been about HCA and continuing to talk about it, he himself has not addressed why he didn't seek any conditions of quality of care.

Peter Lewis: I investigated a lot of similar sales of non profits to for profit healthcare organizations across the country. And I've got to say, in most of those cases where the Attorney General did intervene I didn't find any examples of them making quality of care a requirement. There were some in California. When Kamala Harris was the Attorney General of California before becoming Vice President, she did insist on some quality of care metrics for deals like this.

Josh Stein, the Attorney General did not. And in retrospect that's questionable. 

Matt Peiken: It's really mind boggling, and it just goes to show how much of a, quote, pro business state we kind of are. Would the state legislature have been able to do anything about this if it was a different makeup of a state legislature?

We're not a Republican supermajority. Do you think the legislature could have come in and done something about this? 

Peter Lewis: I don't know. We are in a remote part of the state. Quite, far removed from Raleigh. And whether the state legislature has a full understanding of healthcare in this part of the state where people are older, sicker, and poorer than people in the rest of North Carolina.

It's a different animal. So I don't know, 

Matt Peiken: The watchdog has done. I can pick out any number of stories that have dived into the quality of care issue. I can pick out a couple of things about ambulance wait times, and the departure of whole physician groups and nurses groups.

And yet, HCA almost, maybe not even almost, but blatantly, it's like, I don't, we don't care. There's no response. They just say, when you quote Nancy Lindell the PR person, she said, we provide the quality of care Western North Carolina deserves and we will continue to provide the best quality of care. You could create that in an artificial intelligence quote, 

but other than that, HCA doesn't seem to do any, have any response. 

Peter Lewis: They've been extremely responsive this past week. And I think we've actually seen a sea change. A shift in HCA's stance, where they're coming out swinging. 

Matt Peiken: Talk about that a little bit. I want to bring this up. That HCA, from what I understand has tried to pass new bylaws or new requirements on their physicians and nurses and other staff that they cannot say anything or write anything that is disparaging of HCA or there would be steep consequences in their job.

Is that what you're talking about in terms of them coming out swinging? 

Peter Lewis: That's part of it and The Attorney General a couple of weeks ago issued a demand to HCA for 41 sets of documents regarding quality of care and physician practices at Mission Hospital, and HCA's response was to enlist what may be the largest law firm in the world, certainly the most profitable law firm in the world, to write a letter, essentially telling the attorney general that he didn't have the authority to ask HCA to comply with that request. So basically it's our lawyers will beat up your lawyers.

Matt Peiken: And you allude to this in your column that HCA, Fortune 100 company, can have lawyers at its disposal that would dwarf the North Carolina Attorney General's office and any other State or government law entity that would come in their direction, right? 

Peter Lewis: Yes. I think that's exactly what happened 

Matt Peiken: And yet, you have You have physicians and nurses and other staff leaving by the scores.

You have physicians who are grouping to write letters saying, this is what's happening at HCA. This is why we can no longer be there. Nurses have left by the hundreds and yet what I found interesting, give me your take on this. There's a group of existing physicians at HCA who wrote a counter letter saying things are fine here. We, yes, we've had some struggles with the changeover as any changeover in ownership would be, but our quality of care has not dropped and we are working tirelessly for the betterment of health of Western North Carolina. What do you make of that letter from physicians who are continuing to work for HCA? 

Peter Lewis: It was a direct response to a letter signed by 50 or 60 former physicians at Mission and other health care people in the area decrying the decline in health care at Mission. So this was a response to that where Mission doctors We're asked to sign a letter saying, no we're providing a great quality of care here.

Matt Peiken: What do you make of that? And what do people who you've talked to other physicians, nurses, others who have worked in the past for Mission and HCA, what do they make of that letter? The counter letter from existing physicians at who are working for HCA. 

Peter Lewis: There's some valid points in it. One of the misconceptions is that Mission is somehow unique in its staffing problems and its cleanliness problems.

Various other issues. Hospitals all across the country are having staffing problems and wait times at emergency rooms are climbing and, it's not an easy business to be in. 

Matt Peiken: I want to say before you continue mentioned wait times. Ambulances that brought patients to Mission for emergency care in 2018, only four patients had to wait an hour or longer. This year through September,, 309 patients have had to wait an hour or longer. Now, you alluded to that hospitals everywhere are dealing with these issues. Is it impossible to suss out how much of this is post pandemic problems that are rife across industries, hospitals and elsewhere from problems that are acutely

Peter Lewis: The pandemic clearly puts strains on health care systems all around the world. One thing that we pay most attention to is when physicians who have experience working at Mission go to other hospital systems and say, Hey, The difference is night and day. I think the most telling criticism of Mission, even considering national conditions, is that Doctors who have familiarity with Mission and other systems say things are much better elsewhere than they are at Mission. 

I have personal experience going through the emergency room at Mission this past summer. I was sent to the Mission emergency room by my personal physician. That was at 11 o'clock in the morning for what she thought was an urgent medical need. I was finally admitted to the hospital at three o'clock in the morning. 

Matt Peiken: Wait. So you were there for, for 15, 16 hours before you got seen? 

Peter Lewis: Yeah.

And most of that time in the emergency room and the emergency room when I got there, there was a line of people waiting to register for emergency help There were people throwing up in the hallways. There were meth addicts tweaking out on the floors. It was really a Hieronymus Bosch kind of painting.

And, I think in the article that I wrote on Halloween it was like Halloween in the emergency 

Matt Peiken: room. 

I can't imagine what the backup there was. How many people you were in there with? 

Peter Lewis: There were some physicians in there as well. Taking their parents into the emergency room for various things. And we had lots and lots of time to talk to other people in the emergency room.

And the conditions there were simply unacceptable. I've lived overseas, in what would be considered less advanced parts of the world. And I've been in the hospitals there. This was just simply a rotten experience, and I wouldn't want to go there again. 

Matt Peiken: Your column, the real heart of it is you ask what can be done. And spoiler alert, very little, it seems if you go down all the possibilities. And I think it's important I want people to read through. You bring up all kinds of things.

You mentioned, can our community force a sale? Say unlikely. Can the hospital be bought back? Unlikely. And you mentioned this is, of HCA's 183 hospitals in its system, Mission is number two in revenue. And you say, point blank, why would they give that up?

It's a cash cow. it's an approved waterfall of money that will never abate. 

Peter Lewis: Yeah, HCA bought a monopoly health care situation here in western North Carolina. And as I mentioned, it ranks number two in terms of net patient revenue among all of the 183 hospitals that HCA operates.

And number one has twice as many beds as Mission Hospital does. Wow. So they're making a lot of money here. 

Matt Peiken: You mentioned very early in our conversation about HCA, we were talking about acquiring Mission. Do you know how many of HCA's hospitals were acquired versus built or developed on their own?

Peter Lewis: I don't know that, but Matt, there's one development. Last month University of Oklahoma bought back a hospital that it had sold to HCA. It's a much smaller operation than the one here in Asheville, but there is a possibility that the community might be able to make HCA an offer.

Matt Peiken: You did talk about that. You mentioned going down the line of different possibilities. Can we amend the purchase agreement? Probably also unlikely. You mentioned the only other bidder. If they can even be considered a bidder in this process. It seems like Novant Health. Game was rigged from the start it seems like.

So Novant Health, the only other bidder. And they seemingly came in with a better offer than HCA. 

Peter Lewis: That was the thing that kicked off our, certainly my reporting on Mission was reading the papers and not knowing who else bid on the hospital.

And the hospital refusing to say who bid. They said that there were multiple people interested in buying the hospital. But my reporting found out that nobody was given the opportunity. In fact, Novant was the only company besides HCA that was given the opportunity to make a presentation to the board of directors.

In fact Ron Paulus, the CEO of Mission, had approached HCA before the Mission Board even authorized him to begin searching for partners. They had an offer in hand from HCA for both a sale and a partnership agreement, a 50 50 arrangement that would have allowed The Mission system to remain locally controlled.

Matt Peiken: How does that work? Local control, but HCA owns it. 

Peter Lewis: They're a partner. So Mission would take advantage of HCA's scale, the ability to buy supplies and medicines and other things at cost. But at the same time, Mission would retain local control over the hospital in a partnership with HCA.

And is that what happened? No. The board rejected that deal. Why? I 

Matt Peiken: don't know. Why would they say, we don't want control? Why would the board, it defies logic. 

Peter Lewis: I wish we could 

Matt Peiken: ask them. 

You actually did post the names of every board member and every leader at the tail end of your column and you left an invitation saying, now that we're past this deal, we're now four years since the closure of that deal. You're asking the board. Have you had time to reflect and maybe reconsider the wisdom of this? I want to ask you, has any member of the Mission board anonymously, with promised anonymity, reached out to you about this? 

Peter Lewis: No. 

Matt Peiken: Nobody has? 

Peter Lewis: No. 

Matt Peiken: So you did mention among the solutions, you mentioned we could make public pressure.

HCA, seemingly, from the outside looking in, seems impervious to public pressure. So much has been written about the criticisms from patients, doctors, nurses, staff, everybody in this chain HCA. Has lobbied and levied criticisms upon criticisms with data, not just anecdotal experiences. And HCA seems to be completely shameless around this.

How can public pressure of any variety make a difference? 

Peter Lewis: I think It's really telling that at least once a week now, somebody says they're thinking about moving. They call us up and they say they're thinking about moving to Asheville, but they're concerned about the reputation of Mission Hospital.

And we have to say, yeah, it is a concern. And if enough people in this community express concerns about the quality of health care here, then that's got to get HCA's attention. 

Matt Peiken: How? I don't know how. In fact, there are a lot of people. The artists and others in this community who say there are already too many people moving here and if the So called poor quality of health care keeps people from moving here.

Fine. Stay away there are a lot of people here who don't want to see more people moving here I don't know how that pressure would make any difference. People are moving here regardless. One thing you did mention It seemed like the only real potential lever was the oversight of the Centers for Medicare and Medicaid and the Joint Commission on Accreditation of Healthcare Organizations.

You said they can't close the hospital but their certifications or the absence or taking away certifications can have a real impact on hospitals. Can you talk about that?

Peter Lewis: The Centers for Medicare and Medicaid services oversees the regulatory system, oversees, whether or not a hospital can get reimbursed for Medicare and Medicaid patients, which 

is huge.

That's everything. That's huge. It would be a 

death penalty. If especially in this region with so many uninsured people and so many people on Medicare and Medicaid. If they were found to offer substandard care, then that is a possibility that CMS could threaten them with losing that ability to make money.

But, last week Mission Hospital was given an A grade by an independent monitor called Leapfrog. For the last five years, Mission has been very proud of the fact that they've received A ratings for safety and health care from the leapfrog group. This year they chose not to participate in it because I think they have to report on things like cleanliness and staffing ratios and all of that.

Matt Peiken: So it's a voluntary assessment?

Peter Lewis: Yeah. So this year for the first time. Certainly in recent history they refused to participate on their own, but the reports coming in from the Department of Health and Human Services and from the Centers for Medicare and Medicaid Services, apparently gave Mission good enough grades that they still retained an A grade from LeapFrog.

Matt Peiken: Wow. What do you make of that? 

Peter Lewis: We wrote a story last year about how valid these rating systems are. It's sort of like... opening up a magazine and seeing that Asheville is named, number three, best place to retire. How do you measure something like that? 

Matt Peiken: Also, there are things like getting a plus rating for the Better Business Bureau.

It's almost meaningless. You pay into these organizations. From what I understand, a lot of these ratings, the agencies that are tasked with rating, Are paid for by the people they are rating. Exactly. Is this similar, is LeapFrog a truly independent, like a consumer reports entity?

Or are they in the pocket of the hospitals that, that they're tasked with overseeing? 

Peter Lewis: I wouldn't go that far. They are a reputable organization. LeapFrog does have a very rigorous way of collecting data, analyzing it expert staff, but they do charge the hospitals a fee for using their ratings. But it's the same thing with the, we just did a big story on tourism where some magazine will rank Asheville, the top beer destination in America. They were paid to do that by the Tourism Development Authority. 

Matt Peiken: I'm just wondering with leapfrog and you're saying that they're very highly thought of and that you said their process is rigorous. We've just talked about just a fraction of the data that points to how quality of care, not just your own experience, but that of people who are giving the care are talking about it.

How could any entity leapfrog or anybody else to, What data are they using that we don't have access to that is leading them to believe that HCA Mission deserves an A grade? 

Peter Lewis: It didn't come from Mission HCA. It's really remarkable that they didn't participate in this process this year.

Matt Peiken: So how could any information have come to LeapFrog that would... Allow them to give such a rating if it's that rigorous, they would say we didn't we weren't allowed in, we can't give them a rating. Wouldn't that be a little more responsible and have more integrity?

Peter Lewis: Our reporter, Andrew Jones did talk to them to ask that very question. How did they get an A rating when they didn't agree to provide any data. 

Matt Peiken: Okay, so before I let you go where are we at with being able to do anything? Seemingly, there's no real leverage point, other than, potentially, the Centers for Medicare and Medicaid doing something, if they come in and find that the standard of care at HCA is less than stellar.

Peter Lewis: I think the first thing I would say is that the state legislature needs to rescind the Certificate of Need policy, which prevents other healthcare systems from moving into this area without approval. The Certificate of Need was set up to prevent the kind of, Thing that's happening here right now. 

Matt Peiken: Yeah, you even mentioned that as part of this, and correct me if I'm wrong in this, HCA has made more hospital beds available to show there isn't a need here, even though they're not being used.

Correct? 

Peter Lewis: The state determined that Asheville needed 67 more hospital beds. There's a fight over who gets to open there's a freestanding emergency clinic that is going to go into Buncombe County. The question is who gets to open it.

And the Attorney General says that he would like anybody except Mission to be able to do that. Mission has challenged they say, no, we're the best qualified to open those things. And I think anybody who's been in the system will recognize that they can't even staff the beds that they've got currently.

So why would they want to do 67 more beds except to keep out competition? 

Matt Peiken: So this 67 bed emergency hospital center, this seems like perhaps a foot in the door to having some alternative to HCA. You mentioned Josh Stein wants anybody other than HCA Mission to operate that. You said there is, right now, HCA is allowed to operate with an approved monopoly.

You said it would be up to the state legislature to allow this to go through, right? That somebody else other than HCA operate that 67 bed facility. 

Peter Lewis: Yeah. If you look at South Carolina and Kentucky those states have done away with this so called certificate of need, basically allowing the marketplace to determine, if some other hospital wants to come in here and build A new facility here in Asheville they, should they be allowed to do that?

Matt Peiken: That should appeal to any free market Republican, right? Exactly. I mean, Do you know how, just wondering how our Congressman Edwards how does he feel about this? 

Peter Lewis: We don't know. 

Matt Peiken: He's kept his mouth shut about this? 

Peter Lewis: He hasn't been active in the conversation. 

Matt Peiken: There anything we haven't talked about around HCA Mission that you think is important for people to know going forward?

Peter Lewis: Asheville Watchdog is beginning a series of public forums. In January, we're having one on Mission. And we're going to be talking about what can we do about the situation here? I think we've done our best to inform people about the history of the sale of Mission to HCA, raising a lot of questions that unfortunately the people who made this deal don't want anybody ever to find out about.

There are secrets involved in the deal that are protected by phalanxes of lawyers and that as a community, I think we deserve answers.