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New Healthcare Foundation Created in West Virginia

July 22, 2002
Michael Pollard, Logan County Family Resource Network, (304) 752-9536
Leslie Bennett, Consumers Union, (415) 431-6747
Carl Patten, Community Catalyst, (617) 275-2910

Community applauds action taken by West Virginia Healthcare Authority.

CHARLESTON, WVA—Residents and health advocates today applauded the creation and proposed funding for a new hospital conversion foundation in Logan, West Virginia. Organizing documents for the Logan Healthcare Foundation were filed on July 1, 2003, marking the first step for the Foundation to fulfill its mission of improving the health status and access to care for the residents in the area surrounding Logan General Hospital.
The Foundation is a component of the sale of bankrupt Logan General to for-profit LifePoint Hospitals, Inc. finalized in December 2002. Since April 2002, Logan County Family Resource Network, Consumers Union, and Community Catalyst have participated in the bankruptcy. It is unclear how much the Foundation will be funded in total, but it will receive $5 million as a result of the hospital’s first distribution.
In addition, the West Virginia Healthcare Authority is redirecting its entire claim of $5.8 million to the Foundation. Healthcare Authority attorney Cindy Dellinger said “Since this claim originated from Logan General Hospital improperly charging patients, it is appropriate that this money go back to the community to enable the Foundation to accomplish its mission.”
Still unanswered are questions relating to the cost of terminating the hospital’s pension plan, which will ultimately affect the Foundation’s funding, since it will receive all of money that is left after the creditors are paid and pension issues are resolved. Logan General attorney Stanley Levine explained that 80% of the $5.8 million claim due to the Healthcare Authority will also be paid to the Foundation during the first round. “We cannot pay the full $5.8 million then, but we will be able to pay the remaining 20% when we have collected all of the assets and resolved the disputed claims.”
Coordinator of the Logan Family Resource Network Mike Pollard is pleased that there is more certainty about the Foundation’s initial funding. “The Foundation is going to start off with about $9 million. That will go a long way to providing healthcare resources to the area’s neediest population. But every dollar saved in expenses associated with terminating the pension plan will end up with the Foundation doing good things in the community, so we are encouraging the hospital to be as efficient as possible from this point forward.”
“We are committed to ensuring the pension plan participants are well taken care of and we are working with actuary Connie Rydberg on these issues to support a smooth termination for Logan General’s employees and we have made specific recommendations to that end,” said Leslie Bennett, staff attorney at Consumers Union. “The hospital agreed today to conduct a competitive process for evaluating potential organizations to conduct the termination and purchase annuities,” Rydberg added, “that could dramatically increase the amount of money that goes to the Foundation.”
Pollard and other advocates are working with the hospital to implement accountability mechanisms to ensure the Logan Healthcare Foundation is responsive to the healthcare needs of area residents. Carl Patten, staff attorney at Community Catalyst, said “We are working to improve the transparency and accountability at the Foundation to assist it in accomplishing its mission.” The groups have recommended that an independent analysis of the Foundation’s activities be conducted and that information be reported to the public.
The hospital is expected to file its amended reorganization plan next week.
The Logan County Family Resource Network is a community-based organization charged with developing a local community plan to address the coordination of local services, creating strategies for systemic improvements, and evaluating results of the healthcare delivery system with the mission of “people helping people help themselves.” The Logan County Family Resource Network works to mobilize the Logan community to improve health services for the families who live there.
Consumers Union, publisher of Consumer Reports magazine, is a nonprofit testing and information organization serving only the consumer. Consumers Union is a comprehensive source for unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
Community Catalyst is a Boston-based national advocacy organization that works in partnership with consumer and community groups around the country to promote healthcare justice. Community Catalyst seeks to strengthen the voice of consumers and communities wherever decisions shaping the future of our health system are being made.
Together, Community Catalyst and Consumers Union compose the Community Health Assets Project, a national effort that seeks to protect nonprofit charitable assets and to ensure that community health needs are addressed in the conversion of nonprofit healthcare institutions to for-profit status. It is staffed by a team of attorneys, health policy analysts and education specialists with extensive experience in the full range of substantive issues presented by the nonprofit conversion process. CHAP is funded by grants from W.K. Kellogg Foundation and the Ford Foundation.