By far the most common comment I receive from county residents opposed to a sale of Gila Regional Medical Center is that we will “lose local control.” When I ask for more specifics about what they are concerned we will lose, the answer is usually something along the lines of “local input into important decisions.”
Until a year or so ago, I strongly shared this belief. I now see it as largely a myth. The local control that means so much to so many Grant Countians is far lesser in scope and far less effective than is commonly believed.
First, our hospital operates in a highly competitive market environment. This greatly constrains the options available to hospital decisionmakers. The hospital must operate as a business and generate several million in net income per year in order to maintain their facility, modernize equipment, recruit talent, and build a reserve to weather downturns. As we have seen recently with the 13 layoffs in the billing office in favor of outsourcing that work to outside of our community, the imperative to maintain a sound bottom line even today constrains the hospital’s ability to keep local jobs, something one might think should be a priority for a locally-owned organization. Earlier examples include the privatization by the GRMC Board of Trustees of home health and hospice care, repeated decisions to postpone bringing our labor and delivery rooms up to modern standards, and cutting support for the Community Health Council. These may have been reasonable decisions given the scarcity of financial resources, but they make the point that local control cannot overcome market pressures. It is ironic that under the current regime of "local control" the hospital cannot protect local jobs while with LifePoint I would anticipate a contractual agreement to do just that.
Second, you don’t really have control when you don’t have information. Because public hospitals such as ours must compete with private hospitals, New Mexico law specifically exempts them from the Open Meetings Act. This is appropriate; why should private businesses gain competitive advantage from forcing public hospitals to reveal their confidential business information? But as a result, only the hospital’s Board of Trustees and its top management – not the public or even the County Commission -- are privy to the kind of information one needs to provide effective input into important decisions. In some past administrations, it appears that even the Board of Trustees did not have all the information it needed to keep the hospital on course.
Third, even if we had complete and reliable information, we – the Commission, the public, the medical community – couldn’t reliably influence the Board’s decisions. Under New Mexico’s Hospital Funding Act, the Board of Trustees is not accountable to any entity, including the County Commission. The Commission appoints trustees, but the Act specifies that, “after their appointment, none of the members of the hospital governing board shall be removed except for cause specified in a written charge and after full public hearing on the charge.” If the legal structure doesn’t convince you that this is the case, I’ve got two words for you: Cancer Center. No amount of individual, group, or community-wide pressure was able to dissuade the Board from following its path to disaster, even though we could all see for at least a year that it would indeed be a disaster. The Board of Trustees is so immune to outside influence that the Commission has no recourse to address mismanagement even if it threatens to bankrupt the hospital.
I have another example for you. If the hospital’s Board of Trustees truly represented the community, it would have been willing to explore, together with the County Commission, alternative forms of ownership. If it truly represented the community, it would have had the exact same interest we had – ensuring Grant County has the strongest hospital providing the widest array of high-quality services possible. Exploring options does not require abandoning one’s preferences, just a willingness to learn. Instead, the Board remained willfully ignorant of all options other than the status quo. Both its statement early in the process that it would not consider other structures, and its recent refusal to meet with LifePoint to hear what the company has to offer and to question them about it, have given me the perception that the hospital Board has confused the community’s interests with those of the hospital’s top management and that it is incapable of steering the hospital through the innovations that will be needed to survive in the long run.
What this leaves is “local control” only in the sense that the members of the autonomous, unaccountable Board of Trustees are Grant County residents. In terms of true local control, is this actually better than the local Advisory Board that LifePoint would establish? In fact, the local Advisory Board proposed by LifePoint would include local elected officials, so we would no longer be excluded from hospital board meetings. The medical community would have not just two members on the board, but half of the board, allowing for much more input into the hospital’s strategic planning process – which is an annual exercise in LifePoint’s hospitals. LifePoint’s local board would take the lead on strategic planning, which is the process that identifies areas where investment is needed. And it would have reasonable veto power over any new CEO proposed by corporate HQ. (No, LifePoint’s local board would not have final say on investment decisions – that would remain in Tennessee, which is a concern for me. But I am also aware that having an out-of-state corporation make final decisions about how to invest capital they are contractually committed to investing is better than having a local board figuring out what to cut because there’s not enough money.)
In summary, one of the most important questions we need to answer to make this decision is whether the exchange of the current unaccountable Board of Trustees for a local Advisory Board involves a loss of local control significant enough to outweigh the gains in financial, technological, legal, and human resources we would see from a sale to LifePoint.
Grant County Commissioner, District 5