The Decision

The Decision

The City Council must soon decide and vote to either reject the Letter of Intent (LOI) proposed by the Cleveland Clinic (CCF) or pass enabling legislation that absolves the CCF of its obligations under the terms of the 1996 Definitive Agreement and sell or demolish the assets of Lakewood Hospital. The Council has reviewed the Clinic’s proposal and the data provided by the Clinic/LHA consultant (Subsidium) and employed legal and real estate firms for independent input and negotiations. The Council held multiple open and closed forums and is currently offering feedback to the CCF and LHA regarding their concerns. Reportedly the LOI is being transformed into a new 2015 Definitive Agreement that has yet to be made public.  After months of deliberation, several truths are evident.

            First, the Clinic and LHA have failed to prove that Lakewood Hospital is not viable.  They have not provided data regarding the numbers of persons in our specific service area that have required hospitalization, nor the incidence and prevalence of disease or procedures in our community and the amount of reimbursement provided.  When questioned, they only suggest that general trends across the county show less need for hospital beds and a shift to more outpatient care. The devil is in the details and they have not provided specific enough data from our service area to make an informed decision. Dr. Donnelly reported that the CCF believes that they can build a viable hospital in Avon based on the average of 80 Clinic patients that are admitted to non-Clinic hospitals in Lorain County but doesn’t explain why the 100-150 patients at Lakewood Hospital are insufficient to maintain our community hospital. They have documented that under the Clinic’s management the number of patients admitted to Lakewood Hospital has declined. They have not adequately explained how and why this happened on their watch. They have not explained why their decision to transfer psychiatry, cardiac surgery, invasive cardiology, cardiac electrophysiology, oncology, pain management, thoracic surgery, rehabilitation services and neurosurgery to other institutions does not constitute a breach of the Clinic’s obligation under the Definitive Agreement from 1995 and the amendment in 2010. 

            Second, the business plan for the demise of the hospital is poorly constructed. The LOI envisions that the LHA/Clinic will consume all of our liquid assets to demolish all of our fixed assets (the building). This is a plan that leaves a foundation that can supply only $1-1.5 million/year from its investments to assist our community. The other assets (hospital equipment, bed licenses and real estate) are to be transferred to the Clinic at minimal cost without obtaining an independent appraisal of their value. Frankly, if we completely walked away from the hospital and pocketed our liquid assets the Nonprofit Entity would have twice the available money than is currently envisioned. The indirect costs of the hospital demolition include the loss of an estimated $1.5 million in lease payments and taxes and the loss of the largest economic engine and employer in the City of Lakewood. According to the Development and Planning Director’s analysis the proposed siting of the CCF Family Health Center also makes the development of the remaining land, parking lot and professional building less attractive. The Clinic does not sustain these losses, we the citizens of Lakewood will endure this long term. 

            Third, the Clinic has not articulated a specific health care plan that will meet the needs of our citizens. When asked what constitutes the health care needs of Lakewood, The Clinic refers to the 2013 Community Needs assessment which did not envision the absence of the Hospital. That report felt, with an intact hospital, our greatest need was for Mental Health Services. The Clinic is unable to explain how their decision to close inpatient psychiatry several years ago and their pending closure of the geriatric psychiatry meets this need. No analysis of the disease burden of our neighbors has ever been discussed. We are told that the mere establishment of a family health center will solve our current and future health care needs. Under questioning, Dr. Jones and Donnelly report that the Clinic will, at some undetermined date with some undetermined criterion, decide what services will be available. The CCF has shown us no specific evidence of improvement in the health outcomes in the communities in which their 14 family health centers currently exist nor that their current family health center model will fit our population.

            Fourth, the search for an alternate health care partner for Lakewood Hospital was deeply flawed. The majority of members of the Lakewood Hospital Association (LHA) are directly or indirectly appointed or controlled by the CCF.  Therefore, any other provider who negotiates with the LHA views it as an arm of the CCF and cannot help but to see the Clinic as controlling the negotiations.  Furthermore, the amount of time allotted to respond to a formal request for a proposal would be insufficient for any robust market analysis and planning to be performed to allow another entity to develop an adequate business plan. In addition, a contract is still in force between the Clinic and the LHA until 2026 which could subject any new provider to a lawsuit based on tortious interference with the current contract. No real negotiations can therefore occur until the CCF is removed from the process and the playing field is leveled for potential providers. 

            A new approach and process is required to protect the interests of the citizens of Lakewood. First, the city council must reject the Letter of Intent to level the playing field and provide an opportunity for innovation. Second, the Council needs to appoint a commission which includes governmental, civic and medical leaders independent of the CCF and LHA to examine over a 6-12 month period our community’s health needs including objective measures of disease, access to health care, availability of health services and potential partners. Finally, the City Council will need to evaluate this data and conclude whether or not Lakewood Hospital is financially viable and will meet our community needs. If the hospital is to continue a new partner would be determined. If the hospital is to be closed the city should and must control the process to maximize the retention of community assets for our community’s benefit.

Lakewood Hospital has been developed over more than 100 years to serve the citizens of Lakewood. A further investment of a few months in this process is our obligation to those who came before us.