The Road Not Taken

[tom monahan]

During the so-called debate on the hospital, I contacted the National League of Cities and asked the folks there if they had ever heard of a mayor AND CITY COUNCIL deliberately forcing the closing of its community hospital by closing the hospital and driving some 1,500 jobs out of the city and losing millions of dollars in income taxes in order to favor another major hospital system. After a long pause (I thought the guy hung up because the question seemed far out) he slowly said :"NO,I NEVER HEARD OF SUCH A
THING HAPPENING." I then said that the so-called leadership of Lakewood was in the process of doing it And I invited him to come to Lakewood and see for himself the public sham that was being pulled off on the community. I asked him how many members were in the League and he said that there were 19,000 CITIES,VILLAGES AND TOWNSHIPS IN HIS ORGANIZATION. So, at least we had one distinction that the mayor and his minions don't brag about.

[Mark Kindt]

They Ignored The Opinion Of The Experts

Here's what their expert Subsidium told them:

"[...] the community loses a hospital with a robust workforce, annual lease payments to the City, payroll taxes and has the potential for significant community disappointment."

The experts at Metro Health System told them something quite similar:

"Community sense of abandonment in both healthcare and business development sense; Lakewood Hospital is currently largest employer in the City. Loss of additional jobs and economic impact throughout community as the largest employer is no longer buying local goods and services."

Completely prophetic!

[tom monahan]

During the so-called debate over the closing our community hospital, I contacted the National League of Cities and asked a gentleman there if he had ever heard of a mayor and entire city council deliberately work to drive 1,500 jobs and millions of dollars in income taxes out of our city in order to close our 107-year-old hospital just to favor another hospital system and turn the hospital's land over to their friends for development. At the time the mayor and his minions were proposing that hospital would be replaced with a so-called family health center and stand-alone ER. There was a long pause (I actually thought the guy had hung up because the question seemed to catch him by surprise).

The he answered: "NO I NEVER HEARD OF SUCH THING." I then asked him how many members were in the League and he told me that there were 1,900 CITIES,VILLAGES,AND TOWNSHIPS in the organization. When I revealed that fact at a council meeting I was met with usual disdaint that the mayor and minions usually save for anyone who wants to get to the bottom of anything important in this city.

[Mark Kindt]

Mr. Monahan, we are both former public officials who held senior positions in government during our careers.

The experienced advice and counsel of other former public officials, including lawyers, has been ignored and often ridiculed.

None of this bodes well for the future of Lakewood.

It is painful to watch this particular "black hole" being dug.

[Mark Kindt]

Review of Policy Choices

Let's take a look at healthcare options for Lakewood in 2024. The city administration and city council chose the poorest option.

The Road Not Taken -- Policy Choice Comparison 2024.jpg (244.13 KiB) Viewed 7537 times

[Mark Kindt]

Proposal Values In September 2014

Between the Metro presentation and the Subsidium presentation, we can see how each party valued Lakewood Hospital for the proposed transaction.

(We have to add the proposed value of the Family Health Center of $34 Million to the Subsidium table to obtain a balanced comparison.)

(We have to subtract the tax value from the Metro slide.)

Cleveland Clinic Foundation valuation: $65,000,000

Lakewood Hospital Foundation valuation: $102,000,000

Metro Health System valuation: $112,500,000

Keep in mind that ONLY the Metro Health System valuation would have maintained an operational hospital; the other two valuations were for complete liquidation and shut-down.

2015_SubsidiumOverview 81.jpg (387.36 KiB) Viewed 7509 times

[Mark Kindt]

Metro Health System Was Excluded from Consideration in June 2014

Despite having a proposal that would have upgraded and repositioned Lakewood Hospital and maintained 900 high-paying local healthcare jobs, here we can see Metro being disregarded by June of 2014.

2015_SubsidiumOverview 67.jpg (323.9 KiB) Viewed 7497 times

[Mark Kindt]

Selecting The Option That Their Own Consultant Found To Have Little Material Advantage To The Community

LHA has elected to proceed with the Cleveland Clinic.

Its consultant has told them that that proposal has little material advantage to the community.

And, the Clinic is holding pretty firm on its low-ball liquidation offer -- $65M

Smooth move LHA! Ignore the offer that would maintain high levels of local employment and upgrade the hospital -- $112M.

[Mark Kindt]

Selected Option Would Have Adverse Financial Impact on Community

Here we see LHA proceeding with the policy option that would have the most adverse financial impact on the community (!)

You will also note that I have posted my own commentary directly on this Subsidium slide.

The wellness foundations will never have enough annual revenue to replace the levels of charity care that are daily provided by local hospitals like Metro (and previously by Lakewood).

[Mark Kindt]

Questionable Process; Poor Outcomes

Here we can witness what happens when public officials disregard public process.

The city administration had a statutory duty to conduct the bidding for Lakewood Hospital consistent with Ohio law.

That duty was largely supplanted by LHA, LHF, and CCF in a closed, private process, heavy with conflicts-of-interest.

We can thank that process for our dismantled and demolished public hospital.

[Mark Kindt]

Right-Sizing Lakewood Hospital Was A Viable Option

The City's own healthcare consultant (Huron) agreed in the Summer of 2015 that it would be a viable option to right-size Lakewood Hospital.

This would have been quite similar to what had previously been proposed by Metro Health System.

By then it was too late, because a year earlier, the city had already committed to proceeding with the Family Health Center proposal.

Huron-Consulting-Final-report 40.jpg (356.47 KiB) Viewed 7436 times

[Mark Kindt]

A Few Final Comments

In June of 2014, the LHA Trustees have committed to solely negotiate with the Cleveland Clinic Foundation toward the liquidation of LHA and closure of Lakewood Hospital.

By the end of September 2014, negotiations with the Cleveland Clinic Foundation were at a point where the consultant was telling them that the "value provided to the community could be close to zero" in the liquidation deal.

At the same time, the Metro Health System had a pending proposal almost four times the value of the CCF proposal AND one that would both maintain the Hospital and retain 900 highly-compensated local jobs in the thriving field of health care.

Like most citizens in Lakewood, I believe that our city, the 15th largest city in Ohio, needed a hospital and still needs a hospital.

Again, why are we tearing it down?

[Stan Austin]

The Road Not Taken-- continuing with the metaphor I just wonder--- was there a "rest stop", a fork in the road, a critical juncture when the decision was made (by whom) to take the wrong turn?

[Bridget Conant]

The Road Not Taken-- continuing with the metaphor I just wonder--- was there a "rest stop", a fork in the road, a critical juncture when the decision was made (by whom) to take the wrong turn?

Stan, that question assumes that the entire scenario was the result of forces outside the control of the city. That is, that we were “responding” to market changes and/or a change in direction dictated by the business model of the Cleveland Clinic.

In reality, there was a proactive plan to slowly dismantle the hospital programs, causing loss of traffic and revenue in order to justify its closure for the subsequent acquisition of the land upon which it stands and the ability to “develop” that land.

It began back in the days of disgraced mayor Ed Fitzgerald, who as we all see, continues to have a hand in it today and is making money off of it.

[Mark Kindt]

The Road Not Taken-- continuing with the metaphor I just wonder--- was there a "rest stop", a fork in the road, a critical juncture when the decision was made (by whom) to take the wrong turn?

From my perspective, the final fork in the road was September 2014, when the private committee (the LHA "Step-Two" committee) chose to continue to negotiate with the Clinic with the full knowledge from their consultant that the Clinic proposal lacked "material advantage" and "could be near zero". About 10 days or so after that, Metro withdrew from the process, since it had apparently been ignored for several months.

However, the first fork in the road was the decision of the mayor to engage in a private, non-public process for a public contract that involved major public assets and was properly the subject of Ohio law relating to public contracts.

Attorney, former Lakewood public official, State Senator Mike Skindell briefed this issue extensively, but I no longer have a copy of his memorandum.

Huron Consulting did address some critical comments about the process, but never addressed any of the public contract law issues.

The private process was improper from the very start. They simply got that wrong. Maybe the city has a legal opinion on this, if so, it should have surfaced by now. But a lot of documents are still being withheld.