MedWest's future uncertain after year of turmoil

By Caroline Klapper | Dec 28, 2012
Photo by: Caroline Klapper The Outpatient Care Center opened earlier this year.

It has been a year of turmoil and controversy for the MedWest organization, and the health care system faces uncertainities as a new CEO for MedWest-Haywood takes up the helm.

From the beginning of 2012, controversy was sparked when MedWest-Haywood received a $10 million line of credit from Carolinas HealthCare System, the management entity for all three of the hospital systems that make up MedWest — Haywood, Harris and Swain.

The line of operating credit was secured with a deed of trust from to the Haywood Regional Medical Center property, including the nearby fitness center. Haywood County commissioners had to sign off on the deal, as did the other partners in the organization, which had to pledge receipts in the event the property and receipts from Haywood didn't cover the debt.

The loan was needed to cover a number of expenses, both expected and unexpected, including settling several lawsuits. Some of the funds were used to accomplish the mandatory switch to an electronic medical records system and complete several building projects, including the Urgent Care Center in Canton and the new outpatient surgery clinic. The money also helped to purchase several local physicians’ practices.

The line of credit is due to be paid back in January 2013, but target dates to reduce the amount have been missed. John Young, western regional vice president for Charlotte-based Carolinas HealthCare, said the finance agreement can easily be extended.

Management shake-up

Early in the year, management changes were made that split the duties of then-MedWest CEO Michael Poore into two positions, with Poore remaining president of MedWest-Haywood and Steven Heatherly serving as president of MedWest-Harris and MedWest-Swain. The change was made to allow for better focus on issues within the county.

Not long after, Poore announced his resignation.

Poore had been with HRMC since he was hired as the chief executive officer in 2008, and he helped guide the facility through the aftermath of the hospital’s decertification. Later, he was named president of the entire MedWest organization.

Poore said there had been some tension within the organization concerning resource allocation and other matters.

Young was appointed as interim CEO for MedWest-Haywood.


WestCare raises questions

Discontent had been building for quite some time among WestCare physicians, when in April, long-time MedWest-Harris physician Dr. Bob Adams blasted hospital management and declared the future of MedWest was doomed.

Adams cited frustration among WestCare physicians over the massive investments in MedWest-Haywood, which, he claimed, jeopardized needed improvements elsewhere in the MedWest system. Other complaints ranged from the Haywood-heavy management team that replaced long-respected managers at the facilities, day-to-day operations that were in shambles, low morale, a depletion of the WestCare cash reserves from $19 million to $13 million and questions about finances that were never answered.

Young admitted that the growth at MedWest-Haywood had created a rift with the other hospital campuses over resource allocation and the unexpected costs at Haywood.

Although Haywood was beginning to show a positive margin, Jackson and Swain operations have been losing money.

Young said with leadership now divided between MedWest-Haywood and MedWest-Harris/MedWest-Swain, it will be easier to focus on issues within those counties and “the success of all three hospitals.”

The situation came to a head in September when the WestCare governing board voted to adopt a resolution to dissolve MedWest.

WestCare Board Chairman Bunny Johns said the decision came down to the fact that MedWest had not achieved the main objectives for which it was created — those being financial stability, access to capital and a clear path to a sustainable future.

HRMC’s governing board has still not declared its position on continuing the MedWest affiliation. When the three hospitals that make up the core of MedWest were integrated, the legal agreement included a review of the contract three years after its formation. Board members acknowledge that unwinding the agreement with all the joint purchases made during the time frame will be difficult.

More bad news arrived in early in October when it was announced that MedWest-Haywood was cutting staff by 56 positions and MedWest-Harris was reducing staff by 26 positions for a total of 82 positions.

The cost-cutting move is expected to save $7.4 million annually, and hospital administrators said the layoffs were made across departments in a way that patient care would remain unaffected.

Young said MedWest-Haywood was in a good position to grow with the new outpatient surgery center and urgent care center facility in Canton up and running.

In November, Janie Sinacore-Jaberg was hired to fill the MedWest-Haywood CEO spot, a move Young would “shake some things up,” given her experience in growing business and keeping costs down.

The roller-coaster ride in 2012 doesn't show signs of slowing down as MedWest will not only face organizational issues in the coming year, but a slew of changes both at the federal and state level.