Southern New Mexico Chapter of Common Cause

March 17, 2004

To:Dona Ana County Commission,

Las Cruces City Council, &

Mr. Matthew Holt, Attorney

Interested Parties & Organizations

Re. Lease of MMC to Province Health Care of Tennessee

Southern New Mexico Chapter of Common Cause is extremely interested in the lease of MMC to Province Health Care of Tennessee. We consider this issue to be one of the most important public policy issues in this county and city. Our members offer the following suggestions for improvements in the agreements between the Citizens of this County and Province. We do so in a spirit of constructive assistance in the hope that we can obtain a final agreement which fully serves the needs of ALL citizens of this county, and also serves the interests of Province and its stockholders. We want to make it clear that these comments are not to be taken to be critical of Province HealthCare. In fact, we believe our suggestions will clarify and make much more specific the terms of this lengthy lease agreement, which will benefit and protect both Province and the citizens of DAC. Further, our suggestion in item 13 will specifically benefit Province, and enhance its ability to serve all citizens.

We understand that there have been several drafts of the proposed lease and related agreements and assignments since discussions between legal representatives began in January, 2004. Our comments are based upon our examination of the most recent lease draft, which Mr. Holt assures us is current as of March 15, 2004

Our concerns with the current draft of this 40 year lease of our community hospital are in three categories:

(A) Access to hospital services by the uninsured families of this county. An estimated 40 % of the population of DAC have no health insurance protection. This does NOT include those are covered by Medicare or Medicaid, and it includes only a small percentage of those who are commonly labeled as “indigent” and for whom federal sole provider funds, matched by the county, cover hospital care costs. There are an increasing number of uninsured, employed families who are at risk with no health insurance protection.

(B) Oversight of Province’ delivery of services to the indigent and the uninsured, and access to information regarding the operation of our hospital.

Specifically, we offer the following suggestions for improvement to the lease and related agreements:

1. There is NO reference to providing care for uninsured or indigent patients anywhere in the lease document. There are two principal agreements: the lease ($138 million) and the Asset purchase Agreement ($12 million). It would appear that providing indigent or uninsured care is NOT a condition of the main agreement (the lease). We think it should be . If it is not in the 40 year lease, city-county have no leverage to enforce compliance.

2. In the Asset Purchase Agreement, the Lessee (Province) does covenant (section 6.5(a) that they will " institute and maintain during the term....policies for the treatment of indigent patients comparable to those presently maintained by MMCI". But, having even this statement within the Asset purchase agreement renders the promise to provide such care meaningless, since the assets will be transferred at the time $$ are exchanged, and there is therefore no “teeth” to the covenant……no way to enforce compliance.

3. There is no definition of the word "indigent", so it is impossible to tell what care Province actually would provide and to who. The lease indicates they will provide care “comparable” to what MMCI has provided, but what specifically does that mean? The use of the word "comparable" is very imprecise........and allows the Lessee to claim comparability over a wide range. For example, what happens when the population doubles and triples over the next 40 years? Does that mean Province will only provide the 2004 level of care? Does it mean comparable in terms of types of treatment provided, or in terms of numbers of patients, or $$ spent, or what?

4. There is NO mention of Province assuming any responsibility for caring for uninsured patients in either document. As noted above, these patients ( some 13,000 of them last year) are residents who under current MMCI definitions are usually not indigent. Yet, this is the major category of need within DAC. These families are often lumped into the category of “uncompensated care” Is Province agreeing to care for them? And if so, where is it so stated in the documents? If not, will the county or city provide funding to cover these costs ? We would think Province would want to know, as would we, on behalf of these families.

5. There is also no mention of another category of care....i.e. "community benefit" or "charity" care. This is another group of persons MMCI was caring for….some 2,900 last year. Who will cover these costs?

6. Whatever categories of care that Province does finally agree to pay for should be very specifically defined, and a process set forth for the determination of eligibility, and an effective city-county oversight methodology should be included within the agreements. In addition, there should be penalty provisions if Province does not meet their promised obligations.

7. The provision 6.5(d) in the asset purchase agreement....... about providing assistance to the Clinics is vague. There should be a specific agreement with the Clinics included as a rider to the lease, so the city-county, the clinics, and Province all know exactly what is expected.

8. In 6.7 of the asset purchase agreement, Province promises to form a hospital board....which includes doctors and community leaders. We believe that patient advocacy groups....or others who would be more representative of the citizenry and “customers” of the hospital should be included. A patient “omsbudsman” should also be provided for in the agreement, and should be independent of Province management.

9. Province is agreeing to only one public meeting per year. We do not believe that is adequate. All the meetings of the Board should be open public meetings, with public participation invited.

10. There is no provision for an independent community oversight committee, which is certainly needed to assure that indigent and uninsured care is provided in an effective way, and with courtesy.

11. Approvals regarding transferring the lease, or subleasing are loose at best and seem to be weighted heavily in favor of Province. These should be renegotiated.

12.Province makes promises as regards retention of hospital employees, ( Section 6.4 in the asset purchase agreement). Since the lease draft calls for all employees to be “at will”, and describes offers to current employees as “substantially comparable” to their current status, and also gives Province a no-fault provision if they do not hire these employees…….this document essentially provides no real protection for current staff. We understand that Province may need to make certain personnel changes in order to operate efficiently, but we think the negotiators need to go back to the table on this and do a better job protecting the interests of current MMC employees. At the minimum, we think Province should be required to report to city-county and the public, the status of current employees and their employment on a periodic basis after they take control of the hospital.

13. There is no provision yet included in this draft of the documents which defines the use of the proceeds from the one-time lease-purchase fee ($150 million), after the MMC indebtedness is paid. We believe this should be placed in a secure trust, with the corpus left intact, and the interest applied to reimbursing Province for their care of uninsured and indigent residents. We also suggest that an amount equal to the property taxes and the local share of gross receipts taxes paid by Province should also be used for this purpose. These amounts should be administered by a trust officer with very specific instructions regarding their application to the costs of care for indigent and uninsured residents.

14. On page 19 6.5(e), Province makes certain promises preceded by the words “Lessee shall consider the following”, and then goes on to list; care at the detention center, a data system between clinics and hospital, veteran’s care, additional hospitalists, the cardiac step-down unit, pastoral care, mental health services, and First Step prenatal care. Since the words “shall consider” precede these promises, they are essentially meaningless. The negotiators should go back to the table and try to get firm commitments on these items. At the minimum, there should be a required report from Province and a timeline regarding their decisions about these matters which are important to many residents.

Finally, We realize this is a lease draft……and we understand that our elected public officials of city and county bear full responsibility for the content of the final agreements. However, as an interested group of citizens, we request the opportunity to examine and comment on future drafts in a timely manner before any final decision is made. We earnestly hope that the above minimum provisions, all of which will strengthen the agreement on behalf of the citizens of Dona Ana County, will be included in the final document. If they are not, we respectfully suggest that the entire deal should be reconsidered.

Respectfully submitted,

Southern New Mexico Chapter of Common Cause

Governing Board of Directors

Co- Chairs: Dr. Phil Banks and Dr. J.M. Kadlecek

Vice- Chair: Dr.Jane Asche

Secretary: Vanessa Quiroz

Board Members: Gus Bigelow, Dr. John Bloom, Don Brown, Rose Garcia, Ron Gurley, DoloresHalls, Woodie Jenkins, Mike McCamley, Vicki Simons, Tamie Smith, and Charles Welch

Copies to:

Area Legislators, Governor’s Office, Attorney General’s Office, Media,

League of Women Voters, Dona Ana County Advocates, Community Action Agency, Bishop Ramirez, La Clinica De Familia, Ben Archer Clinic, MMC Foundation, NM FOG, NM Common Cause, and other interested parties and organizations.

For further information, contact Dr. J.M. Kadlecek 505-541-1566 or 505-649-0873

Or at <DrJMKadlecek@aol.com>