A man directly connected with the firm Oktibbeha County supervisors hired to conduct an analysis of OCH Regional Medical Center once played a major role in a failed effort to acquire the hospital.
Douglas M. Johnson, who is listed as a principal with Stroudwater Associates — the firm supervisors hired Monday to deliver an external, unbiased study — previously worked as vice president of acquisitions and development for Capella Healthcare, a for-profit system that approached Oktibbeha County in 2013 about a 50-year lease agreement for OCH.
Johnson also may have ties with Frederick Woodrell, the consultant supervisors hired to assist them in their search for a group to study the hospital. Johnson once served as vice president of business development for Quorum Health Resources, the same firm that employed Woodrell for three decades.
Supervisors unanimously picked Stroudwater Monday out a field of four finalists that emerged from a pool of nine overall applicants.
One of the applicants, Healthcare Management Partners, was previously excluded by the board after OCH Chief Executive Officer Richard Hilton raised questions about its ability to facilitate an unbiased study. HMP previously co-authored a white paper cited during an April health care summit that Hilton said could show the firm’s preconceived bias toward selling or leasing publicly owned hospitals.
The board is expected to pay Stroudwater $45,000-$50,000 for the analysis. Such a study is the first step mandated by state law before governing bodies can formally explore the sale or lease of a publicly owned health care facility.
Hilton declined to comment Tuesday on if there is a perceived conflict involving Stroudwater and Johnson, but the hospital administrator did say he would work closely with the group as it begins seeking information.
“The board screened the applicants, and it came down to one. We’re a unique facility here, and I just want to make sure everything is given a proper look,” Hilton said. “I think the community is entitled to a fair review so they can see where our hospital stands. That’s the only way to get can get closure. If (Stroudwater’s) recommendations lead to things we’ve discussed in the past, we can react to them.”
‘Now I work on the other side’
Johnson — who also worked in executive positions for QHR, Centerre Healthcare and Community Health Systems — said Capella inquired about OCH in 2013 “not because it was vulnerable,” but because of its strengths and placement within a unique market.
“It’s a great community and a nice hospital — those are the types of places we’d visit and share our operating model . That’s also not to suggest that was the only solution, either. They said, ‘Thanks, but no thanks,'” he said Tuesday. “Essentially, now I work on the other side. My role at Capella was to find hospitals that would join our family and portfolio. Now, I’m helping communities like OCH figure out what they should do. Selling or leasing may not be the right answer. We don’t come in with preconceived solutions. Let’s understand the dynamic of the market first.”
Woodrell left his post as the Arkansas-based Sparks Health System’s CEO in 2009 after the system was sold to Health Management Associates. He departed because of his ties to QHR, which had a management contract with Sparks, a 2009 Talk Business Arkansas report states.
As provided to supervisors, Woodrell’s resume states he worked for QHR from 1979-2006. He also served as president of Quorum Intensive Resources, a QHR subsidiary, from 2009-13.
Johnson’s LinkedIn page states he worked as QHR’s vice president of business development from 2008-10.
He joined Stroudwater one year after the inquiry for OCH was made.
‘Everyone has…some little connection’
Board President Orlando Trainer said Stroudwater was chosen from the four finalists because of the scope of services it offered and the study’s overall price tag. Two of the other finalists specialized in accounting, he said, and the county wanted to focus more on market analysis and OCH’s positioning for the future.
Connections between all of the firms, he said, and other publicly owned hospital systems and counties that have entertained transactions could be eventually identified.
“Everyone has some kind of issue, some little connection. I voted for Stroudwater because they’re not heavily relying on the accounting side. I don’t think we’ll find anything out of kilter there, anyway. From the assessment side — that’s the most important moving forward,” he said. “We’re trying to do this in a transparent way. All four of the applicants could have done a good job, and frankly I’m glad we’re moving forward with this.”
Trainer said he expects letters of engagement between the county and Stroudwater to be finalized at the board’s next meeting on Monday.
Stroudwater’s analysis will include studies on OCH’s patient migration patterns, quality of health care, physician alignment model and other deliverables, Johnson said.
“Essentially, what we’re trying to figure out — and what the board is interested in knowing — is where does the hospital fit in the competitive landscape and how likely it will be successful in the changing times. Their hospital has been very successful in the past years — that’s not to suggest it won’t continue being successful. The thing everyone recognizes is what it has done in the past won’t necessarily make it successful in the future,” he said. “Where are we going and how do we make sure the hospital continues to provide quality health services? That’s what I want to answer. We’re excited and anxious to get to work.”
Supervisors are expected to hold public hearings on Stroudwater’s findings after the report is released.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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