Health Midwest asks courts to review proposed sale

? Health Midwest asked courts in Missouri and Kansas on Tuesday to clarify the two states’ laws governing the proposed sale of the nonprofit hospital network to HCA Inc.

Both states’ attorneys general are currently reviewing the agreement, released last week, for sale of the 14-hospital system’s assets to Nashville, Tenn.-based HCA, the nation’s largest for-profit health care company.

The $1.13 billion transaction hinges on approval by both attorneys general and the Federal Trade Commission. Health Midwest’s petitions were filed in Cole County Circuit Court in Missouri and Johnson County District Court in Kansas.

Health Midwest Chairman Bernard Erdman, in a news release, said company directors “fully expect the attorneys general in both states to continue their diligent review” of the transaction.

“We simply seek clarification of the scope of their review and the role of this board going forward,” Erdman said. He said Health Midwest also wants judicial clarification of where the proceeds from the sale would go.

Kansas Atty. Gen. Carla Stovall has said she wants a separate foundation set up to administer the money from the sale of Health Midwest’s two Kansas hospitals, in Overland Park and Iola.

Missouri Atty. Gen. Jay Nixon, at a public hearing on the sale Tuesday night, said he was “very disappointed” that Health Midwest’s board had begun legal proceedings.

Nixon said the filings made it appear that Health Midwest was “trying to avoid any analysis of what the board has already done and what it plans to do in the future.”

But Richard Brown, Health Midwest’s president and chief executive officer, said the network wasn’t trying to avoid public input – but is looking for direction in a storm of competing interests.

“I would challenge you to find one matched pair of identical perspectives,” Brown said outside Tuesday night’s hearing at Truman High School. “We need to bring some order to the chaos.”

Testimony at the hearing illustrated the range of interests. Witnesses variously told Nixon that any sale agreement should:

l Guarantee that one-third of the sale proceeds be earmarked for eastern Jackson County.

l Mandate a 4-to-1 nurse-patient ratio at all HCA hospitals.

l Require that a certain amount or percentage of revenue be dedicated to indigent care, or public health, or medical research.

l Ensure that poorer suburban regions be guaranteed access to HCA hospitals.

l Guarantee that the foundation created by any sale is not dominated by Kansans, or by suburbanites, or by members of the current Health Midwest board.

“The special interests have all come out tonight,” said registered nurse Sharon Apel of Raytown, who works at Research Medical center in Kansas City, Mo. “I figured they would when they saw the amount of money involved in the sale.

“They all have good purposes,” said Apel, who testified in favor of the mandatory nurse-patient ratio. “But life sciences, for example, have other sources of funding such as grants or association with universities. The uninsured don’t have any grants at all.”