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Potential bidder at odds with unions, US



Published: Sun, August 1, 2010 @ 12:10 a.m.

Labor strife, lawsuit targeting CHS raise concerns in Valley

By GRACE WYLER

gwyler@vindy.com

youngstown

As the deadline approaches to submit bids for the bankrupt Forum Health, a potential second bidder has yet to publicly announce whether it intends to make an offer.

Bids for Forum, which filed for bankruptcy in March 2009, must be submitted to the court by Tuesday, and an auction is scheduled for Thursday. The court hearing on the sale takes place Aug. 10.

Community Health Systems — a Fortune 500 company that reported $12.1 billion in revenue last year — emerged earlier this month as a potential buyer for the health system, which includes Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.

The company, which has 120 affiliated hospitals nationwide, has spoken in recent weeks with union leaders and elected representatives about a possible offer, but, as of Friday, had not submitted a bid to the U.S. Bankruptcy Court.

Union officials have expressed concern about Community Health, however, citing recent labor disputes at several of its hospitals and an unresolved civil suit against the company for false Medicaid claims.

“They have had some pretty significant issues with labor and with the federal government,” said Eric Williams, president of Youngstown General Duty Nurses Association/Ohio Nurses Association, which represents nurses at Northside. “We are not getting any answers.”

The unions have been approached by labor organizations from Community Health-affiliated hospitals that have had problems with the company, Williams said.

“We are very concerned,” he said.

Community Health has been involved in a yearlong labor dispute with nurses at the Wyoming Valley Health Care System in Wilkes-Barre, Pa., which the company acquired in 2009.

The union accused the company of not bargaining in good faith and making unilateral changes in its labor contract, including failing to give nurses’ a scheduled 3-percent raise in January.

Nurse and union leader Fran Prusinski said the company has also instituted a new billing policy at the hospital that puts nurses in the middle of the payment process.

Community Health instituted a policy last year whereby patients are coded with red and green tabs, Prusinski said. Red tabs indicate patients who have not paid their co-pay, and nurses are instructed to take these patients to the hospital’s financial office before they can be discharged, she said.

“There is a total lack of respect for the workers,” she said. “And what it is really coming down to is respect for the community.”

In Spokane, Wash., health-care workers at Deaconess Medical Center and Valley Hospital and Medical Center threatened last week to strike against Community Health’s labor practices.

The National Board of Labor Relations has sided with the workers there, and has filed suit alleging that Community Health violated labor laws.

Forum union officials said they have questioned Community Health representatives about their labor problems.

“We have gotten no response,” Williams said.

It is the hospitals’ policy not to comment on matters regarding the collective bargaining process, said Community Health spokeswoman Tomi Galin.

The Forum unions also are concerned about the U.S. Department of Justice’s ongoing suit against Community Health, Williams said.

The suit charges that three Community Health hospitals in New Mexico participated in a scheme to submit false claims for federal Medicaid reimbursements.

The suit, filed in New Mexico after an investigation by DOJ and the U.S. Department of Health and Human Services, alleges that the hospitals made donations to New Mexico counties that were then used to obtain triple the amount in federal Medicaid payments.

The funding, including the donations, was then returned to the hospitals in violation of the Medicaid Act, according to the allegations.

The local union had its fourth meeting with Community Health on Wednesday, Williams said, and no further talks have been scheduled. Williams said it remains unclear whether Community Health will bid on Forum and what that proposal would entail.

As it stands, Ardent Health Services, a private health-care provider also based in Tennessee, is the only known bidder for Forum.

Ardent has agreed to purchase the health system for $69.8 million. The deal has garnered the support of state and local officials, including Ohio Gov. Ted Strickland, as well as the unions representing Forums’ nurses and employees.

Ohio Attorney General Richard Cordray, who must approve plans for any sale of more than 20 percent of the assets of any nonprofit company, said he will announce the results of his review of the Ardent proposal at a press conference Monday in Youngstown. He said that, as of Friday, his office had not received any proposal from Community Health.

If Community Health does decide to make a bid, it would be the second time the company flirted with the idea of buying the embattled local health system.

Community Health signed a nonbinding letter of intent to purchase Forum’s assets for an undisclosed price in 2006 but backed out of the deal a month later without explanation.

The company would not disclose why it gave up on a Forum purchase four years ago, nor confirm that it is looking into buying Forum Health again.

Unlike Ardent, which operates acute-care facilities in the urban markets of Albuquerque, N.M., and Tulsa, Okla., Community Health’s acquisition strategy primarily targets health systems in “growing, non-urban markets where there is little or no competition,” according to the company’s 2009 annual report.

Those markets generally obtain higher operating margins than urban hospitals because of lower cost structures, limited competition, fewer patients with complex medical problems and higher Medicare reimbursements, the report states.

When Community Health initially expressed interest in a Forum purchase in 2006, some local officials, including Youngstown Mayor Jay Williams, questioned how the Forum system, particularly the urban Northside Medical Center, fit into the company’s business plans.

Since 2006, Community Health has expanded into larger markets where there is competition among multiple health-care providers, Galin said, citing Fort Wayne, Ind., and Birmingham. Ala.

Williams said Community Health representatives have assured him that the company is well-capitalized and has experience in markets similar to the Mahoning Valley’s .

“While my concerns remain the same, they have said they are very much committed to the ongoing operations at Northside,” Williams said. “We will see what happens.”


Comments

1mcree(22 comments)posted 3 years, 12 months ago

Go away CHS!!!!! Just go away. The last thing we need at Forum is more bad publicity by fraudulent company like you! Ardent is who we want to take us into the future. You are nothing but a scam artist in dealings with MBIA who wants nothing more than more money. MBIA, just take what Ardent is offering and reinvest the money and then you can make of the difference you are losing. CHS, you had more than ample opportunities to compete when everyone else came to look at our facilities. But you dragged your feet and now that Ardent has done all the leg work you just want to swoop in and take over. Go away, just go away. Youngstown is full of enough corrupt back door deals without you adding to the mix. Just go away!!!!!!
People of the Mahoning Valley. Shout out your support for Ardent Healthcare. This community needs to move forward with an company that believes in Forum and the Mahoning Valley and Ardent is the one to do just that! Forum Health for Ardent!!!! Shout it out Mahoning Valley!!!

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2UnionForever(1470 comments)posted 3 years, 12 months ago

There is only one answer to CHS - STRIKE!!!

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3palbubba(664 comments)posted 3 years, 12 months ago

mcree has all the answers, maybe they should be negotiating a sale of Forum. UnionForever has a solution, quit working, that solves a lot. Talk like this might just scare Ardent away.

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4glbtactivist(245 comments)posted 3 years, 12 months ago

When is the government going to pass a law saying all companies must pay a liveable wage to every employee. No more slave wages which require the rest of us to provide their employees with food stamps, PIP for heat, health care, college grants for their kids, and public transportation. Just so the business owners can get rich.

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5mcree(22 comments)posted 3 years, 11 months ago

I don't know about having all the answers but I am a non union employee and we are not given any opportunities for negotiations with Ardent or with anyone else. When union employees continued to get raises, and not pay any copays, the nonunion emplyees were put on wage freezes, had their copays and premiums raised etc, etc. but we survived. All I know now is that the majority of union and nonunion employees are ready to move forward. A new dawn, a new day, a new employer that will take us into the future for a very long time.

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6stopcrime(3 comments)posted 3 years, 11 months ago

Well, it seems like all the answers are right here. For starters, well, lose the union idea. Second just let Ardent buy it due to they have a proven background. And, get CHS the heck away from our town.

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7redvert(2046 comments)posted 3 years, 11 months ago

And the union heavy valley continues to make great strides forward. I do not know anything about CHS and don't really care but the owners of a company must run the company, not a union. If the company is intimidated the business will fail and all will lose.

Let me correct that last statement, the union bosses will "somehow" manage to survive...

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8jrlarson1(2 comments)posted 3 years, 11 months ago

Please let me tell you what happened here in Spokane, WA when CHS took over one of our once premiere not for profit hospitals; Deaconess Medical Center. Staffing was reduced immediately to dangerously low levels. Level 2 trauma care was abandoned (not enough profits there). The NLRB has cited them for unfair labor practices. None of their promises for investment have been fulfilled. CHS also took over one of our formerly premiere medical practices and prohibited the providers from referring patients anywhere other than their hospital. I carry a card in my wallet that states I am not to be taken to Deaconess for any reason. Many friends and family members have asked me to make cards for them as well. I have no affiliation with any of the people involved in the labor dispute, so my concern is for my family, friends, and neighbors. This concern is obviously not shared by CHS.

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9heartdoc(10 comments)posted 3 years, 11 months ago

It is not the employees (union or otherwise) that drain the company, but the top-down mismanagement and waste, even in Forum's case. For example, poorly negotiated health insurance reimbursement contracts, executive perks, and using the hospitals funds as the executives' own personal bank account. Now here comes Wayne T. Smith, CEO of Community Health Systems, he rakes in $17,000,000 a year, while all the actual patient care-givers on the front line work for substandard wages, including the professionals. Unions give members a voice in the often oppressive work environment. The Union contract protects health care workers from retaliation from the philosophy of "profits over patients" and assists them in advocating for what is ethically right when it comes to providing care. Union hospitals have long been rated higher from a patient care perspective than non-union hospitals.

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10jbenware(1 comment)posted 3 years, 11 months ago

Why the sudden interest in Forum again by CHS? If we review, CHS and Forum had a letter of intent in place in 2006. Per a news clip dated 9/20/2006, "Forum first entered into a non-binding letter of intent with C-H-S last month. The Tennessee- based company is a multi-billion dollar organization that is growing rapidly, acquiring a dozen hospitals this year alone. Originally, Forum thought it would spend the next several months in negotiations to see if a deal could be worked out on a take-over, but after a visit this week by C-H-S, company officials have apparently decided not to pursue the purchase. No further explanation was given to First News."

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