Efforts to sell Forum continue

Trustees have visited
hospitals operated by
potential buyers.

By WILLIAM K. ALCORN

VINDICATOR STAFF WRITER

YOUNGSTOWN — Forum Health has stemmed the financial bleeding that had the company on the fast track to bankruptcy two years ago, but its board of trustees remains intent on selling the health system as a whole or in pieces.

“There was a time when we thought we might be able to keep it operating as it was. But it quickly became clear to us that primarily because of the lack of investment capital, we needed to look for a buyer,” said Thomas Hollern, board president.

Because of the actions taken over the past two years, resulting in $64 million in cost reductions and increased revenue and $28 million in concessions from union and non-union employees, “Forum Health is worth considerably more today than it was two years ago,” Hollern said.

Hollern, along with Trustee Diane Sauer and Dr. Keith Ghezzi, Forum’s president and chief executive officer, discussed the status of the effort to sell Forum Health. They also discussed its financial status Thursday during a news conference at the Forum Health headquarters on Belmont Avenue.

Departure from past

The presence of Hollern and Sauer was a departure from the past, when press conferences were handled by Dr. Ghezzi and other Forum managers without the participation of trustees.

The reason, in Hollern’s words: “It’s become clear to us that a more local face needs to be put on what’s going on at Forum Health.”

Hollern said it is the board, not Dr. Ghezzi and other managers, that is making decisions on how to achieve its mission of maintaining two hospital systems in the community and providing quality health care.

Hollern, who said he and Sauer have visited hospitals operated by potential buyers, said the “sale process is very active.”

He refused to discuss details about any potential Forum Health buyers or how close to a decision the board might be. He said he would be more forthcoming in the future, but at this point said that information needs to be kept in the confines of the board room.

Qualities wanted

Hollern did reveal some of what the board is looking for in a buyer, whether it be a for-profit or not-for-profit company:

UIt’s not just the best price. The board’s also looking for a company with the financial ability to invest in and maintain quality health care in the community.

UThe company must have experience working with labor unions.

UThe board asks every potential buyer how it would achieve local participation in governance. “If there is no local involvement, I’m not sure there can be a deal,” he said.

UHow the buyer would provide charity care.

A major concern among employees and the community has been what will happen to Forum’s Western Reserve Care System, which consists of Northside and Beeghly Medical Park, when it is sold.

Hollern said that no potential buyer the board has talked with has “shown a lack of interest in Northside. It serves a critical need in a critical part of our community.”

However, Hollern said it would be naive to believe that Northside will look the same in the future as it looks now.

At present, Northside has 300 beds, 200 of which are occupied. There will likely be fewer beds, but the emergency room will continue to exist, Dr. Ghezzi said.

“No matter who owns Northside, the needs of the community have to be met,” Dr. Ghezzi said.

Final approval

Hollern said Ohio Atty. General Marc Dann, of Liberty, has an “intense interest” in what’s going on with Forum Health. He said Dann holds the “trump card” in that the state attorney general has the responsibility of protecting the public’s interest and has final approval of the sale of any nonprofit organization.

Dr. Ghezzi said management and the board are very pleased with the work of the staff that has returned Trumbull Memorial Hospital to profitability and given it the ability to invest in new technology; and brought Northside back to near break-even.

However, Hollern said, where the board was hamstrung two years ago — and continues to be crippled today — is the lack of capital to deal with $180 million in debt, pension liabilities, and the need to invest in technology and facilities to remain competitive.

Hollern said the fiduciary responsibility of the board has increased. Five years ago it revolved around achieving the mission of the health-care system. Added to that today is the obligation to its lenders, who are monitoring very closely the progress being made, he said.

That is why the board chose the path of selling Forum’s assets: to reduce those financial obligations and bring investment capital into the community and the hospital system, Dr. Ghezzi said.

alcorn@vindy.com