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KH trustees hold off on naming Capella advisory board

Offers hospital district executive directorship to unnamed candidate

Posted: April 30, 2015 5:43 p.m.
Updated: May 1, 2015 1:00 a.m.

The KershawHealth Board of Trustees voted unanimously Monday night to hold off on nominating members of what will become an advisory board to Capella Healthcare until after the Franklin, Tenn., company closes on its pending lease/purchase of the hospital. The board also voted unanimously to extend an offer to an undisclosed candidate to become executive director of the Kershaw County hospital district.

The district is a legal status KershawHealth will retain even after the sale to Capella and its takeover of hospital operations with MUSC Health, the patient care arm of the Medical University of South Carolina.

In December, KershawHealth attorney David Summer explained the current board of trustees will hold whatever remains of the $36 million purchase price after paying off bond and other debts. Those remaining funds will be set aside and invested, held in trust in the event the board ever needs to repurchase the hospital’s furniture, fixtures and equipment and/or take back hospital operations should Capella choose not to renew the lease at the end of its 40-year term. The current board would, essentially, oversee the interests of the district and the fund, to be administrated by the executive director.

According to a letter of intent between KershawHealth and Capella, the current board is charged with nominating and appointing members to what the letter refers to as the Local Board of Trustees -- the advisory board.

Two weeks ago, following an executive session at the end of the board’s April 13 meeting, Chair Karen Eckford announced the formation of two ad hoc committees. One would review advisory board applications and was scheduled to bring a slate of candidates to trustees at Monday’s meeting. The other was to schedule interviews for candidates for the district executive director. At the time, Eckford said the board had already posted the opening and was actively recruiting. No votes were taken as part of Eckford’s announcements.

This week’s votes came after an executive session held at the end of Monday night’s meeting. Specifically, Trustee Steve Holliday Jr. motioned to table the appointment of the advisory board until after the closing of the Capella deal. KershawHealth announced March 24 the letter of intent was being extended from March 31 to May 31.

The move to table the appointment may have been made because of a clause in the pertinent section of the letter of intent. Referring to the advisory board, it states, “The current Kershaw Board will nominate and appoint the first Local Board of Trustees after the Closing, subject to Capella’s approval.”

Once the new board is in place, it will nominate its own replacements, also subject to Capella’s approval.

The letter of intent does not specifically state how many members should be seated on the advisory board. However, the letter does state it will be made up “solely of residents of the hospital service area, with approximately 50 percent representing the medical staff and 50 representing the community.” The chief executive officer -- currently Terry Gunn -- would also sit on the new board. However, never more than 50 percent of the board can be made up of either Capella or MUSC Health employees.

Earlier, during the meeting’s public forum section, former Camden City Councilman Willard Polk addressed the board. During his remarks, Polk claimed the pending appointment of the advisory board was “not a well-known published situation” and urged trustees to consider appointing more community members than Capella/MUSC employees. He said this would represent “customers” more than “the foxes who may be guarding the henhouse.” On a separate matter, Polk also asked KershawHealth to consider consulting with oncology patients before making changes in oncology staff due to what he described as a close relationship between such patients and staff.

As for the district executive director, Trustee Eric Boland motioned “to extend an offer to a candidate for the position of executive director as discussed in executive session.” After the vote, the C-I asked about the decision not to disclose the potential director’s name and was told the candidate had not been officially informed and their employment would still be under negotiation.

The C-I then sent an email asking KershawHealth officials, including Summer, if the board had come up with a list of finalists before considering the offer to the unnamed candidate. The C-I also asked if it could be pointed to wherever the job had been posted so it could report on the skills and experience the board was seeking and what salary range, if any, would come with the job.

Walt Cartin, one of Summers’ colleagues at the Parker Poe law firm, forwarded a copy of the job description and requirements. The board is seeking someone who will work directly with the current board of trustees “to oversee and direct all aspects of managing KershawHealth’s assets, retirement obligations, insurance coverage and other responsibilities.” Potential candidates should have at least a bachelor of science degree in a healthcare-related field and a master in health care administration. They must have at least seven to 10 years of work experience in the healthcare and at least five years of experience working with South Carolina healthcare regulatory agencies. Candidates must also have “strong organizational skills and experience working with high-level hospital administrators,” as well as “exceptional verbal and written communication skills and attention to detail.” They must also be able to begin working immediately.

No salary details were included.

Cartin said in his email there were six applicants for the executive director position, but did not name them.

The S.C. Freedom of Information Act (FOIA) does allow public bodies to discuss employment matters and contracts in executive session. However, it requires all material relating to no fewer than three final applicants for a public job to be made public.

In 2007, the S.C. Supreme Court rejected the Spartanburg County School District’s interpretation that “only those applicants deemed by the agency to be ‘finalists’ are subject to disclosure.” The S.C. Press Association (SCPA) has repeatedly interpreted this to mean a public body must release information about whatever number of final candidates there are for a public position.

When the board went through the process of seeking an interim CEO in late 2013 -- ultimately leading to Gunn’s hiring -- SCPA attorney Carmen Maye said even if the board were only interviewing two final candidates, it would need to disclose information regarding those two applicants as well as any applicants in the pool from which those two interviewees were selected.

“If, for example, they had 20 original applicants and narrowed the pool to five from which the two interviewees were drawn, they would need to disclose about the pool of five,” Maye said in an October 2013 interview.

In other business Monday:

• KershawHealth Executive Vice President and COO/CFO Mike Bunch reported on March’s financials, calling it a “very positive month” with the hospital generating operating income of $909,000 -- a $1.1 million improvement from March 2014 when the hospital suffered a $266,000 operating loss. Bunch noted revenue included approximately nearly $500,000 in cost settlement and final disproportionate share hospital payments, and another $206,000 from a S.C. Department of Health and Human Services LiveWell grant. Inpatient admissions, emergency department visits and surgical cases were all up from March 2014. Fiscal year to date, KershawHealth has generated just a little more than $1 million in operating income, a more than $3.1 million improvement from this time in 2014 when the hospital was suffering a cumulative loss of more than $2 million.

• KershawHealth Chief Nursing Officer Stacy Collier announced Lorene Jeffcoat, a hospice nurse, is the second quarterly recipient of the hospital’s DAISY Award. “Lorene went over and beyond for a family at a very sensitive time in their lives and the card that we received from the family was quite moving,” Collier said. Next week is Nurse’s Week, and Collier said the hospital will announce the winner of the third quarterly DAISY Award recipient followed by a celebration of all nurses on May 6.

•Vice Chair Dr. Tallulah Holmstrom announced KershawHealth earned three stars in the Hospital Consumer Assessment of Healthcare Providers and Systems survey. Holmstrom said some South Carolina hospitals earned four or even five stars, but indicated these tended to be smaller facilities.

• Trustees agreed to move their May 25 (Memorial Day) meeting to May 26.

(This story has been updated to correct the first name of the second quarterly DAISY Award recipient.)


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