A public relations battle appears to be brewing between a public trust charged with the task of being "the guardian of our community's health care" and a Tulsa-based nonprofit that assumed the lease of one Muskogee hospital and acquired title to a second.
Saint Francis Health System officials say the Tulsa-based network of hospitals and medical clinics has invested about $27 million in Saint Francis Hospital Muskogee, which consists of two facilities. Its west campus consists of an older city-owned facility that is leased from the Muskogee Medical Center Authority, and the east campus is a newer facility for which it possesses the title.
Saint Francis acquired both as part of a 2017 deal with Capella Healthcare, doing business in Muskogee as EASTAR Health System. Capella signed a 40-year lease with MMCA in 2007 for Muskogee Regional Medical Center, which now serves as the west campus of Saint Francis Hospital Muskogee.
Michele Keeling, who was appointed in February by Saint Francis to serve as vice president and administrator of its Muskogee hospital, said there are plans to invest another $20 million to $30 million locally. Saint Francis officials, she said, are hesitant to move forward with those plans until title to the leased facility is conveyed to Saint Francis.
"You don't see many people spending a lot of money renovating a house they are leasing," Keeling said. "This is a similar situation."
MMCA trustees, who approved the assignment of a 40-year lease inked in 2007 with Capella Healthcare to Saint Francis, expressed unanimous support in October to continue its local oversight of the hospital. Jim Blair, the authority's president and an ex-officio member, said the existing lease protects Muskogee residents by ensuring access to quality, local health care and promoting "our community's overall economic well-being."
Keeling, whose 22-year career with Saint Francis has focused primarily on regulatory compliance, and quality and process improvement, said a lot of progress has been made since the Tulsa-based nonprofit completed its acquisition nearly two years ago. That progress — in the way of capital investments — demonstrates Saint Francis' commitment to Muskogee and its patients.
Among the investments touted by Keeling include what she described as the first-of-its-kind robotics surgery program outside Tulsa and Oklahoma City completed this past May and a new cardiac rehabilitation center that opened in August 2017. Keeling said Saint Francis completed in September a $2 million renovation of the hospital's behavioral health unit, and it added 3-D mammography and other technology that gave "Saint Francis Hospital Muskogee the most advanced and comprehensive breast health program in the area."
"We believe the environment in which our care is provided plays an important role in healing and the patient experience," Keeling said. "We look forward to, if given the opportunity, to make this hospital a showcase facility — our goal is to make the facilities in Muskogee consistent with our brand and reputation for health care excellence."
Blair said Saint Francis officials "are trying to paint a different picture," one that reflects a set of facts that differ from what was presented to the authority when trustees were being asked to sign off on the the 2017 deal with Capella. Blair said when Saint Francis officials initially approached the authority about conveying title to the city-owned facility, they laid out a strategic investment plan worth significantly more than the $50 million being discussed now — about half of that has been spent already.
"We all liked what we heard, but when it came down to it they didn't want to make that commitment of strategic capital in the infrastructure," Blair said. "Now they are telling people the city turned down $50 million, but there was never $50 million for the city — this was them investing in themselves."
The existing lease, Blair said, requires routine capital investments in equipment and facility renovations to sustain a certain level and quality of services. Saint Francis' Chief Operating Officer Barry L. Steichen acknowledged much of the $27 million invested to date "was needed" because "there were lots of things that had been deferred in terms of basic maintenance that needed to occur."
The lease, among other things, also sets standards for the level and quality of services that must be maintained by the entity that operates the hospital. The terms of the lease, Blair said, would remain in effect until the lease expires in 2047 or they are renegotiated.
City Attorney Roy Tucker, the city's liaison to the medical authority, said those protections would be lost if the title were to be conveyed to Saint Francis or any other entity. Tucker said Saint Francis' offer to invest $50 million in exchange for an immediate conveyance of title to the leased facility was accompanied with an operating agreement that would extend five years, much shorter than the 28 years that remain of the 40-year lease that governs its terms of operations.
"There is a very long period when we entered into that lease with Capella where we outlined significant protections for our citizens as it relates to health care," Tucker said. "That's not to say it would never be in the best interest of the community to convey title to Saint Francis for their needs to improve that, but at this point the authority is not interested in doing that."
Tucker said his comments and the authority's position are "in no way saying Saint Francis is not doing a good job or is not a great organization." He said the magnitude of the decision to give up an asset as valuable as the hospital requires extreme care and caution to ensure "all contingencies are considered and dealt with and that the authority and the city make the best decision possible."
"We still believe we have a partner with Saint Francis," Tucker said. "We just want to make sure we have done everything we can to ensure the continuation of quality health care is maintained for the foreseeable future."
Saint Francis' Steichen said investments are being made to meet the expectations described by Tucker and Blair and required by the lease. He cited aggressive efforts to recruit and retain a local nursing staff that included a $500,000 contribution to Connors State College's nursing program and salaries that matched the Tulsa market, and the hospital's minimum wage to $11.20 an hour — those reportedly added $1.7 million to an annual payroll reported to be more than $62 million when benefits are included.
"We are here, we are local, we are invested in the community. We want to make the kind of long-term commitments that we feel are needed to be successful in this market," Steichen said. "But it's obtain that title or a long-term extension on the lease."
City Manager Mike Miller said he welcomes Saint Francis' willingness to invest in Muskogee. Miller said he would like to see investments that will increase the attractiveness of Muskogee as a regional hub for medical care.
"We would like to have highly trained specialists here who can provide not just basic treatment, but specialized and complicated treatment in Muskogee," Miller said. "That's the kind of medical community we've been for a long time — people from surrounding communities have come here — and we want that to grow."
Representatives from both the authority and Saint Francis said discussions are ongoing but have yet to yield fruit.