A proposed mergerlike partnership between two northwest Alabama hospitals has claimed its first casualty-one of the hospitals' chief executive officers.
On Aug. 16 the Northwest Alabama Health Care Authority, which owns and operates Helen Keller Hospital in Sheffield, Ala., fired Ralph Clark, the 152-bed public hospital's president and CEO, who has held the post since 1986. Members of the authority said they sacked Clark, 50, because of deteriorating hospital finances and his failure to communicate on key issues.
But insiders said Clark's fate was sealed by his opposition to a proposed joint operating agreement between Helen Keller and Shoals Hospital in neighboring Muscle Shoals.
That deal also could be scuttled because of widespread community resistance. The proposal has not encountered much opposition in Lauderdale County, Ala., home of Coffee Health Group in Florence, which owns Shoals. But the plan has been fiercely attacked in Colbert County, where Helen Keller and Shoals are located.
The Colbert County Medical Society denounced the deal and demanded the resignations of authority members. At two community meetings, hundreds of angry citizens rallied against the deal in what a local mayor described as "a lynch-mob atmosphere."
The boards of Helen Keller and Coffee Health have been discussing a joint operating agreement since late last year. Shoals is one of three hospitals that Coffee Health acquired from Nashville-based Columbia/HCA Healthcare Corp. last year for $120 million.
Under a tentative proposal, a new joint operating company would oversee Shoals, Helen Keller and 33-bed Red Bay (Ala.) Hospital, which is owned by Helen Keller. Helen Keller would get a 65% stake in the joint operating company, with Shoals receiving 35%.
Commissioners from Colbert and Lauderdale counties and the Florence City Council-which, with the Lauderdale County Commission, co-sponsors Coffee Health-must approve the venture. And that is far from a sure thing, observers said.
Larry Stutts, an OB/GYN and Helen Keller board member, said Clark was fired because he didn't publicly support the deal.
"We need you to get out and lead this parade," Stutts said a fellow board member told Clark at a board meeting earlier this year.
Stutts said Clark responded, "I don't even know if I'm in this parade."
Clark said he couldn't comment on his termination, citing an employment contract clause.
Stutts, who resigned from the board in protest Aug. 4, said the medical community was left out of the negotiations.
"I resigned because of the closed-door meetings and the withholding of information," Stutts said. "The physician community is not opposed to the two hospitals' working together to improve healthcare. But that's not what this is. This is a bad deal for our hospital."
Coffee Health overpaid Columbia for Shoals, which carried a price tag of $60 million, and the system wants Helen Keller to assume that debt without any guarantee of profits, Stutts said.
He said under the deal Coffee Health gives up nothing but gains access to Helen Keller's growing market.
Helen Keller spokeswoman Lisa Ruggles said much of the controversy dates back to widespread distrust between residents and political leaders in Lauderdale and Colbert counties, which are separated by the Tennessee River.
"They say the river is wide and hard to cross," Ruggles explained. "A lot of this (controversy) is good ol' Southern politics."
Ruggles said Colbert County residents fear their money will end up in Lauderdale County and their control over local health facilities could diminish or disappear.
She said the Northwest Alabama Health Care Authority plans to hold public meetings to discuss the proposed deal and has not submitted the proposal to county commissioners. Judy Hood, a spokeswoman for Coffee Health, said it's premature to comment on the joint venture because it is still in the planning stages.
Meanwhile, Helen Keller Chief Financial Officer Sam Strickland and Red Bay Administrator Ralph Wilson will share the CEO duties at Helen Keller until Clark's successor is hired.