My Support Of BuildLakewood.org And A Quick History Of The Lakewood Hospital Transition

I am so glad Build Lakewood launched to help counter the many misconceptions that are floating around the community in recent months regarding Lakewood Hospital. As Finance Director for the City of Lakewood since 2006, this is pivotal issue to the City's future and especially its financial strength. My job is the protection and growth of City's financial position, and to ensure taxes and fees are collected and spent as authorized by City Council.  
 
I hope to shed some light on the issues at hand, and why my biggest fear as Finance Director as it relates to the Lakewood Hospital situation is the City having to bring the properties back on its books. There is too much financial risk if that happens, and I will support anything that prevents that from happening. How that prevention happens is currently being explored by City Council in a thoughtful and deliberate manner.

The City of Lakewood voters in 1985 overwhelming decided to get out of the community hospital business. It was too much of a financial risk for the City to have on its books.

In 1987, the City turned over all of the hospital assets and liabilities to the private, non-profit, Lakewood Hospital Association (LHA) and leased the building and land for $200 a year (yes, two hundred dollars). The City still had title to the buildings and land because there was considerable debt for improvements that had previously taken place, and in the event the debt payments were not made by LHA, the property would revert back to the City.

Lakewood Hospital Association, which is not a hospital system, partnered with University Hospitals (UH) to run the hospital. In the mid-1990s, UH no longer wanted to partner LHA, so in 1996, LHA entered into an agreement with the Cleveland Clinic Foundation (CCF) to run the hospital which is known as the Definitive Agreement. And the Lease document between LHA and the City was updated, with LHA paying the City $1 million a year with the understanding that the city would take over the hospital's EMS services, which took place in 1999. There is no contract between the City of Lakewood and the Cleveland Clinic.

Fast forward to 2013. LHA's governing board which consists of 23 members of which only 3 people (the mayor and two council people) are city representatives, decided to study the future of the hospital, especially in light of recent declining revenues, significant capital needs, and the rapid changes in healthcare delivery. It engaged the services of Subsidium (http://www.subsidiumhealthcare.com/), a nationally recognized healthcare expert to assist.

Many concepts and ideas were discussed during this time. Proposals were solicited from health care systems from throughout the country. Only two healthcare systems submitted proposals: MetroHealth and CCF. In October 2014, Dr. Boutros, MetroHealth's CEO, withdrew Metro's proposal. Negotiations continued between CCF and LHA, and the current proposal known as Letter of Intent was developed and presented to City Council via a January 15th press conference and through a communication on the January 20, 2015 council docket.

Since that time there have been a considerable amount of public meetings to discuss and learn about the issues. City Council hired its own outside legal counsel, Thompson Hine, and recently hired Huron Consulting Group (http://www.huronconsultinggroup.com/) to look at health care trends, review the work of Subsidium, examine the lease between LHA and the City, and LHA's financial position.

There are currently no items before City Council that it can vote on regarding Lakewood Hospital.

In May 2015, a "taxpayer lawsuit" was filed against a slew of defendants, seeking to keep Lakewood Hospital open until at least 2026 (the end of the current lease) and $400 million in damages.

And on June 18, 2015, MetroHealth affirmed that is it no longer interested in Lakewood Hospital.
 
I support Build Lakewood because it is focusing on getting information out there relating to the Lakewood Hospital transition, and is looking forward for the community. It does not support the solution of looking backwards, focusing on assigning blame to those involved in the process, and working through litigation for a short-term gain while potentially putting the City in the position of long-term financial risk.