The golden triangle is in a heated discussion over the proposed merger of the University of Louisville and Catholic Health Initiatives and nobody is happy. It’s turned into a giant mess of fear and more potential problems than any one person can grasp are floating to the surface. That’s why one issue is popping out at us quite strongly. It’s one that can and will impact the UofL Hospital deal. And the best way to illustrate the problem is by looking at Owensboro Medical Health System and a recent ruling by Attorney General Jack Conway.
From the October 15 Messenger-Inquirer:
Ruling: OMHS a public agency
Kentucky attorney general says hospital broke open records law
The Kentucky Attorney Gen- eral’s Office has ruled that Owensboro Medical Health Sys- tem is a public agency by the state law’s definition, and as such broke the open records law when it failed to respond to an open records request.
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The hospital has been operating as a private, nonprofit organization since October 2003 after Owensboro Mercy Health System established new bylaws and articles of incorporation. With that change, the board took the position that it is not subject to open meetings or open records laws. The new structure was created after OMHS bought out Catholic HealthCare Partners in June 2003.
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The attorney general said Daviess Fiscal Court and the city of Owensboro are responsible for OMHS’s establishment, creation and control. The ordinances that transferred control of the public hospital’s assets and operations to a series of new nonprofit corporations from 1991 to 2003 did not ensure the new board’s independence, according to the opinion from Assistant Attorney General Amy L. Bensenhaver.
The articles and bylaws give OMHS authority to operate the hospital, but control of it remains with the city and county “by their strong presence on its board of directors, the ‘residual blocking rights’ they retained through OMHS’s Articles of Incorporation and bylaws, and their power to convey to a suitable
entity the remaining public assets upon dissolution of OMHS,” the opinion states.
See what we mean?
Read the rest after the jump…
More comes in the October 20 edition of the M-I:
OMHS board surprised by opinion
The change from public to private status came after OMHS bought out Catholic HealthCare Partners in June 2003.
Earlier this year Jonathan Kirk Haynes appealed to the attorney general after the hospital denied his request for accreditation records. The attorney general’s opinion stat- ed that Daviess Fiscal Court and the city of Owensboro are responsible for OMHS’s establishment, creation and control.
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While the new articles and bylaws gave OMHS authority to operate the hospital, the attorney general’s opinion stated that control of the hospital remained with the city and county “by their strong presence on its board of directors, the ‘residual blocking rights’ they retained through OMHS’s Articles of Incorporation and bylaws, and their power to convey to a suit- able entity the remaining public assets upon dissolution of OMHS,” the opinion states.
Seven of the hospital’s 14-member board are appointed by Daviess Fiscal Court and the Owensboro City Com- mission. Each elected body has three appointments and they share one appointment.
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Four board members are appointed by a community committee.
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Among its several arguments to the attorney general, the hospital denied that it was a public agency, stating that it was not established and created and controlled by the city and county and does not receive at least 25 percent of its funds from local or state dollars.
This is going to be fun.
4 responses so far ↓
1 Ed Marksberry // Oct 21, 2011 at 2:18 pm
Please allow the following excerpt from a news article, to explain an issue I had with the hospital during my campaign;
The second part of Marksberry’s statement was to announce the launch of his “Citizen’s Responsibility Initiative,” which he said encourages people to become involved in the oversight of their community’s institutions. It also urges more transparency and oversight of the board of institutions. As part of the initiative, Marksberry said his campaign was circulating a petition on its website calling on the board of OMHS hospital to adopt Luallen’s recommended board guidelines. He challenged Guthrie to sign the petition.
Part of the petition’s heading states, “We believe that the board of directors of OMHS must adopt the recommended practices, such as not allowing staff relationships to influence board members, to insure the highest ethical standards.”
Luallen produced the 32 recommendation following her office’s investigations of the Lexington Bluegrass Airport, Kentucky League of Cities and Kentucky Association of Counties, all hit hard by spending problems. One of the recommendations calls for boards to adopt a code of ethics for board members, officers and employees related to “business conduct, integrity and ethics,” and specifically calls for statements regarding such things as conflicts of interest and nepotism.”
Marksberry stopped short of identifying who his petition was referring to at OMHS when it mentioned “not allowing staff relationships to influence board members.” But he said nepotism has happened at high levels at the hospital.
“Nepotism is one of the first things you don’t allow,” he said. “We won’t name names.”
The only obvious relationship between an OMHS board member and a high-level hospital employee is that of board member Ann Murphy Kincheloe and her son Steve Johnson, the hospital’s executive director for community and governmental affairs.
OMHS provided the following statement from spokesman Gordon Wilkerson in response to Marksberry’s petition:
“In accordance with the guidance of the Joint Commission for the Accreditation of Healthcare Organizations, the Commission on Medicare and Medicaid Services, the Internal Revenue Service and numerous other authoritative sources, the OMHS board of directors has adopted policies that address conflicts of interest and ethical behavior. Policies are evaluated on an ongoing basis. Included in OMHS-approved policies are a comprehensive Conflict of Interest Policy and a Code of Ethical and Professional Behavior to maintain the highest ethical standards.
OMHS appreciates the work of Auditor Luallen and will continue to review the recommendations.”
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2 Joey Wilson // Oct 22, 2011 at 10:39 am
The Kincheloe/Johnson relationship is obvious nepotism BUT Johnson is very capable and talented at government affairs. It’s not like he’s not qualified for the position (though I don’t believe the opening was ever advertised).
3 Ed Marksberry // Oct 22, 2011 at 12:14 pm
Why allow a conflict of interest to last for so many years, when the board member could have just stepped down.
4 Landscaper // Oct 22, 2011 at 2:19 pm
Ultimately the CEO who hired him, had approval from the board chair. Who as chair of UK, was quite aware of public agency nepotism conflicts of interest. I believe if someone would like to control an agenda, its important to hire the kids of your board members and put them in positions of executive level community relations to regulate the flow of info to the board and to the community. Just sayin’
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