OCH Regional Medical Center trustees and Chief Executive Officer Richard Hilton say the hospital cannot produce a wealth of public and protected financial information about the organization by June 12 — the date set by Oktibbeha County’s request for proposals for questions from potential bidders — and opening up the books could put OCH at a disadvantage with competitors before a potential sale is likely decided at the polls this year.
After reviewing the county’s recent RFP and a due diligence request to provide potential suitors with a virtual data room comprised of three years of hospital information, the OCH Board of Trustees and Hilton issued District 2 Supervisor Orlando Trainer a letter saying such a due diligence request would, at minimum, take 60 to 90 days to complete.
That timeframe not only goes beyond the June 12 starting date for inquiries from companies, but also extends beyond the RFP’s July 10 deadline for sealed bids.
The letter, signed by OCH board Chairman Jimmy Lindley, states trustees will “produce and make available as much public related information as possible within the time constraints allowed of OCH personnel” but the administration will “delay the release of any confidential and protected non-public related data” until Oktibbeha County holds a referendum to decide a potential transaction.
Hilton said the 19-page due diligence request “pales in comparison” with the data requested for Stroudwater and Associates’ 2016 review of hospital financials and will take away staff members from their day-to-day tasks of efficiently running the hospital.
The hospital, he said, will work to compile publicly available information for bidders and, once the outcome of the expected referendum is known, work to produce more sensitive data if warranted.
“(The Stroudwater request) took us a concentrated effort of three weeks that gradually expanded to five weeks with clarification and other issues from both sides. We have jobs to do here — continue operations. Everyone can’t drop what they’re doing, work eight weeks on this and not do anything else,” he said. “It’s not that we don’t want to (provide the data), but there needs to be a reasonableness with its production. If the will of the people (from the referendum) is for OCH not to be sold, having sensitive information out there to competitors and bidders puts us at an unfair operating position going forward with them knowing everything about us.”
Trainer said he was unsure if the hospital could legally delay the data-producing process beyond the dates established in the RFP, while consultant Ted Woodrell said he would not speak on the legalities of the hospital board’s action.
Both men also said the delay could impact the quality of bids Oktibbeha County is expecting to receive for OCH, but the action would not stop the overall process.
“It’s just one of those things where they’re thinking in the best interest from the perspective of the hospital. We’ll deal with it while it moves forward and consult with legal counsel,” Trainer said. “The supervisors are actually the ones responsible for the hospital, since it is owned by the taxpayers. To me, this does more damage than good.”
Woodrell said he prefers an RFP process to include all necessary information on the front end for bidders, and a delay will force more backend study by potential suitors.
Woodrell is unsure if lack of up-front information will scare off some companies from bidding.
“Maybe, but who knows? I don’t think it’ll discourage serious respondents. This is not exactly an atypical situation,” Woodrell said. “Most respondents have multiple reasons why they’re interested in a hospital. This may or may not affect companies differently. Obviously, I prefer we get all the information out now, because that makes for a better process. You get better, more informed responses if you have a comprehensive data room; however, that doesn’t mean you can’t continue the process with less data.
“Ultimately, it will cost the county money to host an election. But from an operations standpoint, I will support doing it as quickly as possible, because the continued uncertainty can cause harm to the hospital,” he added. “The road is never straight. This is just one of those curves we have to deal with.”
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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