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From: Susan Larson <sjanelarson@gnnail.

com>
Sent: Sunday, September 09, 2018 8:57 PM
To: Harrod, Jennifer
Cc: Theresa Colette
Subject: Resolution from the Town of Burnsville
Attachments: hca resolution (2).pdf

Jennifer,

The Town Council of Burnsville passed the attached resolution and I agreed to send it to you and the Attorney
General. However, I'm having difficulty copying the resolution into the comment form box, so I hope you'll
make sure that he sees this. All but one council person signed, that person abstaining because of a family
member working at Mission.

The information I had entered into the comment form is:

From Theresa Coletta, Mayor of Bvimsville


PO Box 97
2 Town Square
Burnsville, NC 28714
828-682-2420
mavor@,townofburnsville.org

Thank you,
Susan Larson
c Coletta
Theresa cti& rii_ TrI « Councilors:
Zyof Town of Dufnsville Jucfy Buchanan
Dussell Fox
Jeanne Martin \ Bunnie Mcintosh
Towa Clerk / ^ Shannon Peterson

RESOLUTION BY GOVERNING BOARD OF


THE TOWN OF BURNSVILLE
CONCERNING THE SALE OF MISSION HOSPITAL SYSTEM TO
HCA

We, the Burasville Town Council, in behalf of the Citizens of Bumsville,


North Carolina (Yancey County), address the following issues pertaining to
the sale of the Mission Hospital System (a non-profit health care system) to
HCA (a for-profit hospital care system). We respectively ask that our North
Carolina Attorney General provide written assurances of the following
concerns facing our Town of Bumsville residents:

1. First and foremost, assurance that access to health care will remain unchanged or
enhanced, and at an affordable cost for all.
2. Because of the important role the Blue Ridge Hospital plays as an Acute Care
Hospital in serving the rural WNC counties (which includes Yancey County and
the Town of Bumsville), once the protected period ends and HCA or a successor
owner decides to stop operating this hospital facility, this hospital must be
returned to the community at no cost.
3. HCA will provide as much, or more, charity care than provided by Mission,
which will be measured in the volume of patients served and services rendered
and not by a dollar value assigned to the health services provided.
4. Although the sale of Mission Hospital System to HCA remains to be carefully
reviewed by our North Carolina Attorney General, we request that HCA will be
expected to pay a fair market value for Mission Hospital's assets, and that there
will be no conflicts of interest involved in the sale transactions.
5. The formation of a new hospital trust {Dogwood Health Trust Foundation Board)
is requested to be independent of both Mission and HCA, and needs to be
representative of the counties and the population served by this health care
system.
a. Currently, 9 appointments to this Trust have already been selected
with 6 of the 9 appointments being from Buncombe County. Many of
these 9 appointments come from their local Mission Hospital boards,
whose governance is by the Asheville Mission Hospital Board. This is
in direct conflict with the request that this Trust is to be independent of
Mission and HCA.
b. In order to serve the Mission & HCA communities-at-large with health
care community opportunities, we ask that these current Trust

P.O. Box 97 • Bumsville. North Carolina 28714 • Phone (828) 682-2420 • FAX (828) 682-7757
appointments be struck from the record, and that an independent firm
be hired (at Mission's expense) who is selected by the NC Attorney
General. This firm will consult with representatives from the 18
counties to be served by this merger who will have a voice in selecting
the first independent members to serve on the Dogwood Health Trust
Foundation Board.

ADOPTED this the ^ day of September, 2018, by the Burnsville Town Council
members..

eresaUoletta, Mayor

Ji^y B u c h ^ n , Mayor Pro Tern

Town Council Member Shannon Peterson

Russell Fox, Town Council Member

Helen P. Mcintosh, Town Council Member


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December 5, 2018

Mayor Theresa Coletta


Town of Burnsville
PO Box 97
Burnsville, NC 28714

Dear Mayor Coletta:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concems about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
YostjJulie^^^^^

From: Monroe Gilmour <nngilnnour@main.nc.us>


Sent: Tuesday, October 23, 2018 9:18 PM
To: Harrod, Jennifer
Subject: Western NC; concerns about Dogwood Fdn Board lack of racial & gender diversity

Dear Attorney General Stein,


Our organization (Western NC Citizens Ending Institutional Bigotry, WNCCEIB) challenged Mission
Hospital on diversity issues in the mid 90s. Initially, it was confrontational, but the CEO, Bob Burgin, decided
to embrace the future and embrace diversity. Many good things happened including a Diversity officer, a
Diversity committee, an annual minority scholarship program (has given over $l/2m to date) etc. Despite
bumps in the road now and then, there's a new culture there today compared to twenty years ago.
HOWEVER, I was in a meeting yesterday and felt like I had returned to the bad-ol-days of the 90s. We met
with the new chair of the Dogwood Foundation & their Interim Director. We learned that the 9 appointed
members of the Board are predominately white men, most with connections to Mission. Moreover, they said
the foundation cannot not appoint others from Buncombe County at this time, where the majority of people of
color in WNC live.
Today, we had an inspiring "Listening Session" with former Missouri Governor, Jay Nixon. What a breath of
fresh air and inspiration for what can happen. I know you are meeting with him later this week. Please know
he embodies all of what we are hoping for from the Dogwood Foundation.
The tone-deafness and lack of imagination for what is possible were palpable when we met with Dogwood
Fdn. officials. Please require the Foundation to re-do the Board with real diversity such that the make-up of the
Board is 50/50 women/men and at least 25% people of color. Thank you.
Sincerely,
Monroe Gilmour, Coordinator
Western NC Citizens Ending Institutional Bigotry (WNCCEIB)
PO Box 18640, Asheville, NC 28814
mgilmour@,main.nc.us
828-669-6677
wncceib.org
PS my thanks to jharrod for passing this message along to AG Stein

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December 5, 2018

Mr. Monroe Gilmour


Coordinator
WNCCEIB
PO Box 18640
Asheville, NC 28814

Dear Mr. Gilmour;

Thank yoti for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
City of Marion, North Carolina ' ~ !
P.O. Drawer 700 OCT 2 5 2018
Marion, North Carolina 28752 — — — -
R
-T C.-/

Office of the Mayor

October 17, 2018

Hon. Josh Stein


Attorney General for the
State of North Carolina
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein:

I write to you today in three capacities:

* as the Mayor of Marion, North Carolina, and

* as a private citizen who has received life-saving care from Mission Hospital-
McDowell in Marion, North Carolina, and

* as a private citizen who has received life-saving care from Mission Hospital in
Asheville, North Carolina.

You should also know what I am not. I am not a member of the Trustees of Mission
Hospital-McDowell or of Mission Hospital. I am not married to a Trustee, and no one in my family
is a Trustee. I am not on legal retainer to Mission or any of its entities and receive no compensation
of any kind from Mission. I have no connection to Hospital Corporation of America, and I have no
connection with any of the Trusts or Foundations that are or will be created as a result of the pending
purchase/sale of the hospital system.

My angle in writing this letter is simple. I have the exact same interest as every other person
in Western North Carolina: we all want a health care system that takes care of us when we need it,
with the hospital employees and doctors that have the highest level of knowledge, skill and
compassion.

I urge you in the strongest possible terms to approve the proposed purchase of the Mission
Hospital system bv Hospital Corporation of America. I firmly and confidently believe this proposed
transfer of ownership is excellent and is in the short-term and long-term best interests of the people
of Western North Carolina.
Hon. Josh Stein
October 17, 2018
Page Two

Mission Hospital has been a steadfast, dependable source of high-level medical care for
North Carolina mountain residents for generations. Economic and regulatory conditions over the
past fifteen years, and the current prospects for more governmental uncertainty in regard to the
provision of affordable medical care, have increasingly raised questions about Mission Hospital's
ability to continue to supply our regional health care needs in the fiiture.

We in Marion are especially fortunate - and grateful - that Mission Hospital replaced the
hospital in our community. The ribbon cutting was earlier this year, and we have a state of the art
hospital that serves the people of McDowell and surrounding counties. That was a $49 million
commitment from Mission.

At the present time, there is no security that any of the hospitals in the Mission Hospital
system will remain open. It is no doubt that way for essentially every other hospital in America. The
agreement with HCA assures that all hospitals in the Mission system will remain open, and not re-
sold to any other entity, for at least 10 years. With all the upheavals in the healthcare industry in the
recent past, a commitment for 10 years is very significant and should be very reassuring to the people
of Western North Carolina.

There will be huge benefits to Western North Carolinians from the new Dogwood Health
Trust. As the entity receiving the purchase money from HCA for the Mission Hospital system, the
Dogwood Health Trust will have a singular purpose: improving dramatically the overall health and
well-being of the people of Western North Carolina. With about a billion dollars invested, this Trust
will be able to invest between $50 million and $75 million each year toward issues and conditions
impacting the health of WNC people and communities.

The issue that has received the most talk that I have heard is the jealous concern that each
county in Western North Carolina will not have a member of the Dogwood Health Trust board. In
my opinion, this jealous concern is misplaced. To have a board that includes a member from each
of 18 counties and attempts to achieve "one-person-one-vote" representation of the region would
require a board so large as to be unwieldy and impractical.

I am comfortable with the caliber of people already announced to be members of the DHT
board, and I have confidence they will consider appropriately all the health-related needs of all parts
of Western North Carolina. If they don't, we can be sure that the vox populi will rise up and apply
sufficient pressure to achieve balance. I choose not to pre-live a crisis I don't believe will occur.

The DHT board and charitable objectives for WNC are excellent. Sacrificing "excellent"
in order to pursue the elusive and unattainable "perfect" is both an exercise in fiitility and a risk
of preventing all the people of WNC from receiving the improvement of social conditions that
impact so greatly on healthcare ... especially for the youngest generation.
Hon. Josh Stein
October 17, 2018
Page Three

As wonderful as the DHT benefits are, there are even more financial boosts toward
improving healthcare in WNC from the purchase of the Mission Hospital system by HCA. Each
local foundation will receive a donation of $15 million with the intent of improving the overall
health and well-being of the local community. Nothing like this has ever happened in WNC before.
The possibilities are exciting when we consider how many young children, senior adults and those
in between who can receive actual benefit to their personal health.

An additional outstanding feature of the proposed transaction is the payment of ad valorem


taxes to the cities and counties where hospital facilities are located. Marion will benefit from the
receipt of approximately $275,000 in local taxes each year. This is money we have never before
received, since the local hospital was owned by a non-profit entity. We will be able to make long-
overdue improvements to our city parks, replace more aging water lines and sewer lines, strengthen
our minimum housing ordinance enforcement, fund more school resource officers, and many other
projects that we cannot afford now without a massive tax increase for our citizens.

I volunteered to write this letter to you. I previously volunteered to provide a video


testimonial of my gratitude for the skilled medical personnel of Mission (especially the cardiology
component) who saved my life 5 years ago. The video was made, and I further consented to having
my image put on a couple of billboards promoting the superior healthcare I received at the Mission
hospitals in Marion and Asheville. I have not received, not will I ever receive, any compensation
for my endorsement and comments supportive of the high level of health care we have now, and how
regional healthcare will become even greater after HCA purchases the Mission Hospital system.

Please do not be swayed on this highly critical issue by cynical, suspicious or whining
comments from people whose vision and perspective may be limited or motivated by other reasons.

With respect and high regard.

Yours very truly.

(P.S. For the sake of full disclosure, I was a Trustee of the former McDowell Hospital back in the
late 1970s through the early 1990s and learned a great deal about healthcare delivery as a result. I
also served in the past for 10 years as a Trustee of NC Baptist Hospital in Winston-Salem.)
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November 27, 2018

Mayor Stephen Little


City of Marion
PO Drawer 700
Marion, NC 28752

Dear Mayor Little:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terras of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Heal th to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
REIVED
CONSUMERPROIECTONDIV.
MITCHELL COUNTY I
26 CRIMSON LAUREL CIRCLE, Suite 2
UCT 3 0 2010
BAKERSVILLE, NC 28705
Telephone: 828-688-2139 Fax: 828-688-4443 L l-TfJFiTK CAROLINA
n r -'TTfiRMFYjRfflERAL _.
October 5, 2018

The Honorable Attorney General Stein


Attorney General's Office
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Mr. Attorney General,

The Mitchell County Board of Commissioners honorably request that you consider the following regarding the sale
of Mission Health Systems to Hospital Corporation of America:

a) That the Attorney General make public all information submitted to him by Mission or HCA, subject only to
such redactions as he may approve, and rule that the review period cannot begin until such information is
publicly available; and

b) With respect to the sale of any or all of the Blue Ridge Regional Hospital properties, that the APA be revised
to provide that an entity which is representative of the patient population of the Blue Ridge Regional Hospital
(i) be given notice of HCA's intention to sell or solicit bids under Section 7.20 of the PA or otherwise sell or
dispose of all or any part of the Blue Ridge Regional Hospital properties and (ii) an option affording the
entity a reasonable time to purchase the property or properties proposed to be sold at the lesser of the fair
market value or HCA's depreciated cost of such properties; and

c) With respect to the Dogwood Trust that the Attorney General impose conditions on his approval (i) that
would ensure that a substantial majority of the members of Dogwood are independent of Mission or HCA
and (ii) that Dogwood has a board of directors which is broadly representative of the population of the
eighteen-county area Dogwood is designed to serve and (iii) that any form of remuneration for their services
that such directors shall receive shall be reasonable in accordance with terms established by the Attorney
General; and

d) With respect to the proposal of Mission to transfer $15 million to the Blue Ridge Regional Hospital
Foundation that the Attorney General impose guidelines on the terms set out by Mission to ensure that they
are reasonable and will be fairly interpreted and enforced; and

e) That the Attorney General retain continued oversight of the activities of Dogwood and the proposed
conditional transfer of $ 15 million from Dogwood to the Blue Ridge Regional Hospital Foundation; and

We appreciate your consideration of our concerns with the sale of Mission Health to Hospital Corporation of America.

If you have any questions, please feel free to contact me at 828-467-3369.

Sincere!

Matthew "Varn" Grindstaff


Chairman of the Board
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November 27,2018

Mr. Matthew Grindstaff


Chairman
Mitchell County Board of Commissioners
26 Crimson Laurel Circle, Suite 2
Bakersville, NC 28705

Dear Mr. Grindstaff:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessarj' information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern. . .

Sin«erelyt"

Josh Stein
Attorney General of North-Carolina

JS/tms
Oct 31 2018 12;39PM HP Fax page 1

- RbChlVtU i
IMFR PROTECTIONP'V- I

o c r 3 1 2018
October 30,2018
NORTH CAROLINA i|
rrrT &TTnRt^lEY GENr:BAL_J
Attorney General Josh Stein
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein,

As America's healthcare industry changes rapidly, it is important that Western North Carolina
continue to have a high level of investment in health care. It is also critical that we & )ntinue to
tackle the many contributors to poor health, such as the lack of healthy food, insuffic ent affordable
and healthy housing, inadequate public transportation, absence of sufficient childcare and early
childhood education, and the overwhelming opioid crisis. Mission Health joining H( lA Healthcare
will help our region better tackle these "upstream" issues - the social determinants ol health -
through both significant new tax revenue and, most importantly, the Dogwood Healtl i Trust.

The proceeds of the sale, plus Mission Health's remaining cash and investments, will go to the
Dogwood Health Trust, making it one of the largest health care foundations in the Ut ited States.
The foundation will be required to grant between $50 and $75 million each year in W estem North
Carolina to help non-profits and local governments throughout our region implement effective
solutions to the complex issues that result in people being in poor health. This level of investment
has the power to literally transform our region into a place where everyone has acces i to healthy
food, no one goes hungry, everyone has safe and adequate housing, mobility is easy, and many
more children have access to free, pre-kindergarten education.

In short, by focusing on the social determinants of health, the Dogwood Health Trust can play a
critical role in providing our community with the investments we need and that we wi II never be
able to make with current resources. This Trust and its investments can only be reali:i ^ d through the
sale of Mission Health to HCA Healthcare.

I know there are outstanding concerns about the impact of the sale on healthcare in th e rural areas of
our region and about the makeup of the Dogwood Health Trust board. I agree that w latever health
care system exists here must adequately serve people throughout our entire region, at id
• I support the
community desires for the Dogwood Health Trust board to be transparent, accountab e, and
representative of our region.

I appreciate your consideration of my letter as you weigh whether to approve the sale.

Regards,

Julie May fie Id


Asheville City Council Member
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November 27, 2018

Ms. Julie Mayfield


Asheville City Council Member
PO Box 7148
Asheville, NC 28802

Dear Ms. Mayfield:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

1 hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

. Josh Stein
Attorney General of North Carolina

JS/tms
NOV - 8 20iB j
1
HOKTIH CAMH-WA ^_
„PErL£!L5II2Ei^Y~—-- •
•?
November 5,2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein,

I am writing in support of the Mission Hospital - HCA merger and the anticipated Dogwood Health Trust
that will result.

I am a recently retired physician having practiced in Brevard since 1975.1 have served on the
Transylvania Regional Hospital (TRH) Board for more than 20 years, helped establish and served on the
TRH Foundation Board, and served on the Mission Hospital Foundation Board.

The Dogwood Health Trust board members are people who have volunteered their time and talents over
the years to help ensure that the people of their communities and WNC obtain the best health care
possible. They have a deep commitment to, and a true knowledge of health, the role of health systems and
their limitations. They understand the amazing opportunity this Trust has to improve the health of people
in WNC by working to change social determinants. The board is overwhelmingly made up of local people
knowledgeable of and dedicated to this goal. They understood and are committed to a diverse, engaged,
thoughtful and strategic board. The initial board isn't complete yet but terms are staggered (1,2 and 3
years) and while some have said that "too many" have a Buncombe address, they have experience in most
or all of WNC.

It has been pointed out that only about 40% of the population's health is determined by physicians (and
other health care professionals) and hospitals; the other 60% of health is determined by other social
determinants like nutrition, life-style choices, poverty and ignorance. The Dogwood Health Trust has the
potential to be transformational in improving the health of people in WNC by addressing these factors and
working with local charities, groups, health care professionals, volunteers, churches and hospitals.

I trust the present Dogwood Health Trust board to direct this eflfort at this stage of the process. They are
local, share a vision for this dream and have proven abilities to succeed.

Thank you for your time and interest in this incredible endeavor.

Sincerely, /
^ 7 ^

Ray H. Dunkelberg, M.D.


100 Dunks End Road
Brevard, NC 28712
m.fSMyme
7 f 3 -'^PSTB
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November 27, 2018

Dr. Ray H. Dunkelberg


100 Dunks End Road
Brevard, NC 28712

Dear Dr. Dunkelberg;

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity. _

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will careftilly review it.

Comments like yours provide critical feedbaclcthat ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, anJplease continue to
stay in touch on matters of concern. .

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
' 17. City of Asheville
1

THECITYOF
Office of t h e M a y o r
P.O. Box 7 1 4 8
NOV - 8 2011 j Asheville, NC 2 8 8 0 2

ASHEVILLE u.
"
'T O" AT':
;h\„-
P h o n e : (828) 2 5 9 - 5 6 0 0
www.ashevillenc.gov

October 30, 2 0 1 8

The Honorable Josh Stein


9 0 0 1 Mail Service Center
Raleigh, NC 2 7 6 9 9 - 9 0 0 1

Dear Attorney General Stein:

Over t h e s e past months, I've had t h e o p p o r t u n i t y t o learn m o r e a b o u t t h e potential sale of Mission


Health t o HCA Health and t h e process of both t h e transaction and t h e formation of Dogwood Health
Trust. After a great deal of thoughtful consideration, I believe t h a t this planned sale could be positive for
our community. To me, t h e most potentially impactful part of t h e transaction for Asheville and
Buncombe County is t h e Dogwood Health Trust.

As I u n d e r s t a n d t h e mission of t h e Dogwood Health Trust (once created, t h e largest per capita


e n d o w m e n t in t h e State) it will seek t o b e t t e r t h e health of w e s t e r n North Carolinians through t h e
funding of "social determinants." For elected leaders, social d e t e r m i n a n t s can b e pretty broad. It can
m e a n , for example, housing, transit, h o m e l e s s n e s s services, fighting t h e opioid crisis, and early
childhood education. All t h e s e things in my mind are factors t h a t affect t h e s t a t e of health in w e s t e r n
North Carolina. Unfortunately, t h e s e are all a r e a s of concern for WNC, a region with higher t h a n average
levels of poverty, domestic violence, and s u b s t a n c e a b u s e rates.

Dogwood Health Trust could be transformational for our community. Targeting all its resources,
strategically and thoughtfully, t o address t h e social d e t e r m i n a n t s of health, it has t h e potential t o be a
change-maker for Asheville, Buncombe County and w e s t e r n North Carolina.

This potential change for o u r c o m m u n i t y (the sale of t h e hospital and t h e creation of t h e e n d o w m e n t )


has brought uneasiness for many. Folks have different concerns ranging from t h e f u t u r e quality and
accessibility of healthcare t o t h e f u t u r e cost of healthcare. And, s o m e have expressed concerns a b o u t
t h e m a k e u p of t h e Dogwood Health Trust's board. I believe t h a t t h e board is m a d e up of good,
well-intended people, but it currently lacks t h e diversity reflective of w e s t e r n North Carolina. And, this is
a self-perpetuating board, t h e r e f o r e t h e initial board must be c o m p o s e d of p e o p l e t h a t truly r e p r e s e n t
w e s t e r n North Carolina.

I believe t h a t with t h e Dogwood Health Trust, w e have t h e potential to get closer t o t h e healthier
c o m m u n i t y w e envision for w e s t e r n North Carolina. Please d o n ' t hesitate to contact m e with questions.

Sincerely,

Esther M a n h e i m e r
Mayor
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN D E P A R T M E N T OF J U S T I C E TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
0F IC
ATTORNEY GENERAL 9001 MAIL SERVICE C E N T E R 0UTSIDE
' -^L 9 , 7 ! 6 ;, 6 0 0 0
FAX 1
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 '
WWW.NCDOJ.GOV

November 27, 2018

Mayor Esther Manheimer


City of Asheville
PO Box 7148
Asheville, NC 28802

Dear Mayor Manheimer:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear fi-om you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must.review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
From:BOYS AND GIRLS CLUB HENDERSON 8286931077 11/0S/2018 18:44 #314 P.001

Facsimile Cover Sheet

Boys & Girls Clubs of Henderson County

To: ^ F a x #;

Location/Phone #

'^ate' — # P a g e s (Including Cover):_


Cover): —'

From: (-|o.
S e n d e r ' s Initials;

ORIGINAL BEING S E N T TO YOU VIA MAIL; YES NO

COMMENTS:

P.O. Box 1460/Hendersonville, North Carolina 28793/828-693-9444/ FAX 828-693-


1077
From:BOY S AND GIRLS CLUB HENDERSON 8286931077 11/05/2018 18:44 #314 P.002

BOYS & GIRLS CLUB


OF HENDERSON COUNTY

November 5, 2018 www.bgchendersonoo.org

P.O Box 1460


1304 Ashe Street
Hendersonvllle, NC
28793
Dear Attorney General Stein,
(828) 693-9444
Fax (828) 693-1077
Please accept this letter of support for the creation of the Dogwood Health in1b@bgchendersonco.org
Trust and its developing leadership.

Officers
Our agency serves 1,200 school-aged youth annually for an all-inclusive Thomas J. Fazio
annual fee of just $5/child. Club nnembers have two prevailing common Chairman
denominators: poverty and fractured families. (93% of our members qualify
Erica Allison
for free/reduced school lunch. 53% live in single-adult households where President
one or both parents are absent.) Most members (68%) are youth of color.
Brett Shaffer
Overwhelmingly, our members face an elevated risk of academic failure, Vice President
juvenile crime, substance abuse, childhood obesity and teen parenthood.
Nicola Barksdale
Secretary
We believe that the opportunities made possible through the Dogwood
Health Trust could prove generation-changing for many of the children Rich Reimels
Treasurer
served by our organization. We also believe that the individuals who have
been chosen to do the work tn the board's earliest phases are proven,
Board of Directors
engaged leaders who truly understand the local communities of western Dave Adams
North Carolina, and, further, are committed to grow the leadership of the Laurie Bakke
agency in ways that ensure diversity, fairness, and opportunity for all. Paige Boyd
Blair Craven
Susan Fazio
The alignment in our work and the identified priorities of Dogwood Health Stephen Gwaltney
William O. Humlelter
Trust has enormous potential. We urge your support as the board Ernest Humphries
development process unfolds, and we feel confident that the system in place Jan Jarrell
Tamara Lee
will ensure board representation that reflects the dynamic diversity of
John Mellott
western North Carolina. Lutreile O'Cain
Adam Shealy
Chris Smith
Lavinia Zimmemnann

Executive Director
Julia Hockenberry
^ockenberry
Executive Director LIVE UNITED

TAX ID #: 56-1803125
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE T O L L - F R E E IN N C : 8 7 7 . 5 6 6 . 7 2 2 6

ATTORNEY GENERAL 9 0 0 1 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0


F A X :
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Ms. Julia Hockenberry


Executive Director
Boys & Girls Clubs of Henderson County
PO Box 1460
Hendersonville, NC 28793

Dear Ms. Hockenberry:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
To: From: 8282542276@faxer.org 11/7/2018 5:33:10 PM (Page 1 of 3)

F A X

Faxer

To:
Company:
Fax number: 9197166750

From:
Company: Faxer
Fax number; N/A
Business phone: N/A
Home phone: N/A
Address:

Date &Time: 11/7/2018 5:33:12 PM


Pages: 3
Re: Attached Image
To: From: 8282542276@faxer.org 11/7/2018 5:33:10 PM (Page 2 of 3)

165 South French Broad Ave


P O Box 1898
Asheville, NC 28802
P: (828) 268-1222
Housing Authority
F; (828) 254-2276 City of Asheville

Fax
To: The Honorable Josh Stein From: Teresa Jenkins on behalf of Gene Beil

Fax: 919-716-6750 Pages: 2 (including cover)

Phone: 828-239-3510 Date: 11/07/2018

R e : Letter of Support- Mission Health/Dogwood Health Tmat Cc:

•Urgent DFor Raview • P l e a s e Comment • P l e a s e Reply • P l e a s e Recycle

Good Afternoon,

Please find attached a letter of support of Mission Health- HCA transaction and the fonnation of the
Dc^wood Health Trust Should you need additional information, please feel free to contact Gene Bell via
email: gbetl(ia)hacaorgorbyphoneat(828) 239-3511.

Thanks,

Teresa Jenkins
HR Generalist/Executive Assistant
Housing Authority of the City of AshevillB P O Box 1898, Asheville. NC 28802 P: 828-239,3510 F; 828.254.2276
Confidentiality Notice: The information contained in this transmission is confidential, proprietary or privileged and
may be s u b j ^ to protection under the law, including the Health Insurance Portability and Accountability Act
(HIPAA). The message is intended for the sole use of the individual or entity to whom it is addressed. If you are
not the intended recipient, you are notified that any use, distribution or copying of the message is strictly
prohibited and may subject you to criminal or civil penalties. If you received this transmission in error, please
contact the sender immediately by replying to this email and delete the material from any computer.
To: From: 8282542276@faxer.org 11/7/2018 5:33:10 PM (Page 3 of 3)

AiMIVILtl HOUMNa AOTMOWTY

ASHEVILLE HOUSING AUTHORITY


asheville 1 6 5 SOUTH FRENCH BROAD AVE.
housing ASHEVILLE, NORTH CAROLINA 2 8 8 0 1

CFTNUIKRIMO n VIAJU mm

November 7, 2018

T h e Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 2 7 6 9 9 - 9 0 0 1

Dear Attorney General Stein:

It is my pleasure to write this letter of support of the Mission Health- HCA transaction and the
formation of the Dogwood Health Trust. As the Chief Executive Officer of the Housing
Authority of the City of Asheville, 1 have personally witnessed and worked to address various
disparities within the community. I have served on various boards within the community over the
years, and will continue to be a champion of progress. In my opinion, accessibility to affordable
healthcare is an immediate need that must be addressed in order to improve the lives of those
living within Western North Carolina.

The Dogwood Health Trust is committed to improving the health and well-being of the people
and communities across Western North Carolina. The diverse population within the region, and
level of poverty often times creates barriers to vital health services. The formation of the
Dogwood Health Trust vdll ensure these diverse needs are addressed. The members of the board
are local residents with knowledge of our healthcare systems, and their challenges.

In order to address the disparities in our community, a comprehensive strategy is necessary that
will address the needs from diverse perspectives. In my opinion, the Mission Health- HCA
transaction and the formation of the Dogwood Health Trust will be the beginning to a healthier,
stronger community.

Smcerely,

Gene Bell, C E O
Housing Authority of the City of Asheville

Phone: 828.2S8.t222 Fax: 828.254.2276 www.haca.org


S T A T E OF N O R T H CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
0UTSIDE 0 F NC:
ATTORNEY GENERAL 9001 MAIL S E R V I C E C E N T E R 919-716.6000
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0
WWW.NCDOJ.GOV

November 27, 2018

Mr. Gene Bell


Chief Executive Officer
Asheville Housing Authority
165 South French Broad Avenue
Asheville, NC 28801

Dear Mr. Bell:

Thanic you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $ 1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and conti'ibute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay, in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
r

^ NOV - 8 201S

NCRTTH CARCL"-;A
DEPT. OFATTOR.'.SY I;-?"

Marion H. Baker
705 Lake Club Drive
Nebo, NC 28761

November 1, 2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Mr, Stein,

I urge you to approve the make-up of the temporary Dogwood Health


Trust Board. I agree that the ideal board would consist of many more
women and many more representatives of minority populations,
however, please consider the positive aspects of the board. It consists
of white men who are solid citizens, who have a great interest in the
health care available in the region and who are very knowledgeable
about health care. These factors are invaluable in a start-up or
transition board.

Sincerely,

Marion Baker
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER 0 U T S I D E
919.7M6000
FAX: 7 1 6 6 0 5 0
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919- -
WWW.NCDOJ.GOV

November 27, 2018

Ms. Marion Baker


705 Lake Club Drive
Nebo, NC 28761

Dear Ms. Baker:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will careftilly review it.

Cornments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stav in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
01/24/2015 00:20 FAX @001

A facsimile from
Western Carolina Rescue
Ministries
To: The Honorable Josh Stein Micheal A. Woods, CEO
Fax number: 919 7 1 6-6750 828-254-1529 Voice
828-254-0428 Fax
Date: November 8, 2018

Regarding: Dogwo id Health Trust/Western North Carolina

Comments:
RECEIVED
NOV 8 2018

NORTH CAROLINA DEPT. JUSTICE


ATTORNEY GENERAL
01/24/2015 00:20 FAX @002

Western Carolina Rescue Ministries


Providing Rescue, Recovery and Restoration in Jesus' Name

The Honorable Josh Stein


Attorney General of North Can Una
9001 Mail Service Center
Raleigh, NC 27699-9001

November 8, 2018

Dear Mr. Josh Stein,

It is with great enthusiasm to s ipport and e n d o r s e t h e newly formed Dogwood Health Trust. I believe
the stated mission of t h e DogvJoiod Health Trust to "Improve the Health and Well-Being of all people and
communities of Western North Carolina" should be the focus of everyone t h a t calls Western North
Carolina home. As a native of lorth Carolina and a resident of Western North Carolina for the last 12
years I am proud of t h e »/ork: tl at so many organizations located in the mountains have d o n e in the
areas of Improving health and I lutcomes for so many of the most vulnerable in our region. Being the
CEO of the largest emergency ijomeless shelter in Western North Carolina, I know firsthand t h e many
problems that so many of our ( lients face on a day to day basis. Through our collaborations with many
community partners and area I >aders, I have witnessed the c o m m i t m e n t from several of the current
board m e m b e r s of t h e Dogwo( d Health Trust in helping to improve t h e lives of so many. Each board
m e m b e r has d e e p roots in this region and have shown their willingness t o help and serve a very diverse
population. I trust this leaders )ip group and I realize that the board Is Incomplete, so I expect as the
Dogwood Health Trust is f u n d e b w e will all see additional m e m b e r s t h a t bring even m o r e diversity and
skills to the table. This Is a veq strong first board t h a t I believe will unite o u r communities and problem
solve for a better Western Nor h Carolina.

As a community leader and oni that represents multiple groups of people t h a t would be either helped
or hurt with the formation of t le trust, I continued to ask questions and researched the possible
outcomes from this venture. I >elieve t h a t the Dogwood Trust will be t h e catalyst f o r change and
improvement in many areas thftt effect t h e homeless, hurting and Impoverished of Western North
Carolina.

I am excited to e n d o r s e t h e Do jwood Health Trust and the current board m e m b e r s I would ask that
you would favorably consider <pproving the Dogwood Health Trust and t h e mission to dramatically
Improve t h e Health and Well B ;ing of all people and communities of Western North Carolina.

Sincerely,

MULjOA-L
Micheai A. Woods
CEO

P.O. Box 9 0 9 • 2 2 5 P a t t e n Av|enue • Asheville, NC 2 8 8 0 2 • ( 8 2 8 ) 2 5 4 - 1 5 2 9 - Fax. (828) 2 5 4 - 0 4 2 8


www.WesternCarolinaRescue.org
RECEIVED
'NOV 8 2018

NORTH CAROLINA DEFT, J U 8 T I C I


ATTORNEY GENERAL
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 877.566.7226
0 U T S I D E 0 F NC:
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER 919-716.6000
FAX:
RALEIGH, NORTH CAROLINA 27699-9001 919-716.6050
WWW.NCDOJ.GOV

November 27, 2018

Mr. Michael A. Woods


Chief Executive Officer
Western Carolina Rescue Ministries
PO Box 909
Asheville, NC 28802

Dear Mr. Woods:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare.
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

1 hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Commercial
Real Estate
PuUiam P R O P E R T I E S
Development
Sales/Leasing
Services Management

NOV - 9

November 6,2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein,

My family and I have lived in Asheville for over four generations. I have owned a commercial
real estate development company for 26 years. I have developed 72 prime commercial
properties in Asheville and know Asheville as well as anyone. I am in support of the wonderful
transformation of Mission Hospital to HCA and the opportunities this brings.

The Dogwood Trust leaders are in the begirming phase of shaping a transformational health plan
for our WNC region and I believe they will listen to outside advice and know they do not have
all the answers. If changes and course corrections need to be made, they will do it, and they will
lead us to success. The leaders of the Dogwood Trust truly are proven outstanding leaders in
business/healthcare and have a heart for investing the time and effort to benefit everyone in
WNC.

I do believe our Dogwood Trust and Hospital leaders are very well qualified on what is best for
our regional health and I am confident they will make amazing healthcare decisions that are in
the best interest of everyone living in Western North Carolina. I ask for your support and
consideration for this great transformation opportunity.

Respectfully,

Winston W. Pulliam, Jr.


Pulliam Properties Inc. Principle / CEO

WWP/tl

2 W a l d e n R i d g e Dr., S u i t e 7 0 • Asheville, NC 2 8 8 0 3 • O f f i c e 8 2 8 . 6 8 4 . 4 3 4 4 • FAX 8 2 8 . 6 8 4 . 1 5 2 1 • w w w . p u l l l a m p r o p e r t l e s . c o m •


STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX;
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Mr. Winston W. Pulliam


Principle / CEO
Pulliam Properties, Inc.
2 Walden Ridge Drive. Suite 70
Asheville, NC 28803

Dear Mr. Pulliam:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
ca.n rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
October 29, 2018
ITED WAY OF ASHEVILLE RECEIVED
CONSUMER PROTECTION DIV.
Attorney General Josh Stein
9001 Mail Service Center 1
NOV - 1 2018
Raleigh, NC 27699-9001

NORTH CAROLINA
Dear Attorney General Stein, DEPT. OF ATTORNEY GENEPAL

I am writing to share my organization's full support of Mission Health's transaction with HCA
Healthcare. We deeply value our relationship with Mission Health and have appreciated their
support and our partnership. This strong partnership is reflected in Mission's support of our work in
reducing the impact of poverty on students and families through their financial support, volimteer
leadership, employee engagement and community/regional collaborations.

Mission Health's financial support makes it the largest contributor to our annual campaign, a
position held for 20 years. Gifts from their employees, corporate gifts and sponsorships surpass
$600,000 aimually.

Additionally, Mission provides leadership to our Board and many other nonprofits; using these
positions and partnerships to keep informed and to respond to ongoing and emerging community
needs in best practice programs. As a founding member and current leader of WNC Nonprofit
Pathways, Mission supports the health and development of nonprofits throughout WNC. WNC
Nonprofit Pathways provides skill development and organizational work for nonprofit staff and
boards in 23 western North Carolina counties impacting over 100 nonprofits annually.

The above mentioned partnerships are strong, but we are excited about what our community will be
gaining with the formation and funding of the Dogwood Health Trust.

United Way of Asheville and Buncombe County would also like to express our support for the
Dogwood Health Trust Board of Directors of which 5 members are longtime supporters of our
organization.

Janice Brumit, the appointed Chair of the Dogwood Health Trust Board of Directors, is a longtime
member and former chair of our Tocqueville Society which invests over $1.3 million annually in
the education, health and financial stability of Buncombe County residents, particularly those
living in poverty. Janice and the Brumit Restaurant Group have also contributed generously to our
Commimity School Strategy and are the largest single contributor to Homework Diners - a free,
healthy meal and tutoring for students and families in area schools. Janice has been an advocate for
United Way and the population we serve for many years, and we fully support her appointment as
Chair of the Board of Directors of the Dogwood Health Trust.

George Renfi-o is also a longtime Tocqueville Society member, former board member, and
champion of United Way's work in the community. George's expertise and experience will be
great assets to the Dogwood Health Trust Board of Directors, and we fiilly support his
appointment.

We also ftilly support the appointments to the Dogwood Health Trust Board of Directors of Jack
Cecil, Bob Roberts and Wyatt Stevens. All have been Peaks Society members of our organization
for many years, investing both personally and corporately in United Way's focus of reducing the

828.255.0696 • unitedwayabc.org • Facebook/Twitter/lnstagram: unitedwayabc • 50 S. French Broad Ave., Asheville, NC 28801


impact of poverty on area residents. All are champions of United Way's mission and will be great
assets to the Dogwood Health Trust and the community in these new capacities.

We in western North Carolina recognize the health challenges of our population. The Dogwood
Health Trust, with a bold mission to dramatically improve the health and wellbeing of all people
and communities in western North Carolina, will bring extraordinary resources to our region. With
its focus on the social determinants of good health, it will change the landscape of a region whose
citizens are older, poorer, sicker and less likely to be covered by insurance. As the leader of a local
nonprofit organization, I see first-hand how far too many needs go unmet due to lack of resources.

In 2017, the Asheville 2-1-1 Call Center handled over 40,000 calls for western North Carolina.
12% of identified needs were related to healthcare. Often times working with discharge planners
and social workers, 2-1-1 referral specialists provide information to clients for prescription
assistance, dental care, medical equipment and supplies, health insurance, and community clinics.
Additionally, callers with medical needs often present other needs related to the social determinants
of health like home modifications for wheelchair ramps, food insecurity, utility assistance, issues
related to homelessness and more. On a strategic level. Mission as an Accountable Care
Organization and 2-1-1 staff, have worked together to enhance services to the Medicare population
within Mission's footprint. This partnership will only grow stronger with HCA Healthcare and the
Dogwood Health Trust.

I ask for your support of this transaction, and our organization looks forward to these new
partnerships with excitement and optimism.

Sincerely,

David D. Bailey
President and CEO
S T A T E OF N O R T H C A R O L I N A CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
0 U T S I D E
ATTORNEY GENERAL 9001 MAIL S E R V I C E C E N T E R 919-J 16^6000
FAX
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 "
WWW.NCDOJ.GOV

November 27, 2018

Mr. David D. Bailey


President & CEO
United Way of Asheville and Buncombe County
50 8. French Broad Avenue
Asheville, NC 28801

Dear Mr. Bailey:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has laised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

1 hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

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October 24, 2018

The Honorable Josh Stein


Attorney General of North Carolina
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Mr. Attorney General:

I have had the pleasure of knowing Bob Roberts professionally for the past 10 years. As
Chair of our Authority Board, Bob not only took into consideration the prosperity of the
organization, but always placed great value on its most important asset, the welfare of
the employees. Bob was a champion for the health and wellness of the team as expressed
through his persistent support of the largest part of our operating budget, health benefits
for our employees. Bob also understood the significance of the airport on the economy
of the area and was an advocate for the continued expansion of air service for the region
as well as capital improvements to accommodate the tremendous growth experienced
during Bob's tenure.

As a life-long resident in the Western North Carolina region. Bob conveys his continuous
regard for the citizens of our community as indicated by his dedication and commitment
to the many boards on which he has served throughout his career. I have the utmost
faith that Bob will ensure that the interests of the people of Western North Carolina are
met and held to the highest of standards in his position as a Board Member of the
Dogwood Health Trust.

Sincerely,

Lew Bleiweis, A.A.E.


Executive Director

61 T e r m i n a l D r i v e , S u i t e 1 • F l e t c l i e r , N C 2 8 7 3 2 • 8 2 8 - 6 8 4 - 2 2 2 6 • f l y a v l . c o m
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, N O R T H CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Mr. Lew Bleiweis, A.A.E.


Executive Director
Asheville Regional Airport
61 Terminal Drive, Suite 1
Fletcher, NC 28732

Dear Mr. Bleiweis:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entit)'.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

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2 0 1 8 / 1 0 / 3 1 15:37:16 1 /2

Buncombe County O K
RtCblVtU ~ "
R ' 0 ' " " P " P R O T E C T I O N DIV.

NOV - 1 2018 7\
NORTH CAROLINA
riFPT OF ATTR'RKI'RY GENERAL,

FROIVl

Name; Donna Caraker 9197166750@fax.bunconnbecounty.org

Phone: 828-250-4474 Fax: 828-250-4471 9197166750

E-mail: Donna,Caraker@buncombecounty.org

Sent: 10/31/18 at: 3:37:16 PM 2 page(s) (including cover)

Subject: Letter of Support for Dogwood Health Trust Board from Sheriff Duncan

Comments:
Donna Caraker
Administrative Assistant to Sheriff Duncan
Buncombe County Sheriffs Office
60 Court Plaza, 4 tfl Floor
AsheviUe, NC 28801
(828) 250-4474 phone
(828) 250-4471 fax
2 0 1 8 / 1 0 / 3 1 15:37:16 2 /2

OFFICE OF THE SHERIFF


B U N C O M B E COUNTY, N O R T H C A R O L I N A
60 Court Plaza, 4>h Floor
A$heviUe,NC 28801
Van Duncan, Sheriff
mmf

October 31, 2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Josh:

I am writing this letter in advocacy of the Dogwood Health Trust Board. I realize your job in
reviewing and assessing the potential sale of Mission Hospital is one of great responsibility
and the role it plays in the future of our community is tremendous. I am writing you today
to let you know my faith in the Board that has been picked for the Dogwood Health Trust.

The majority of the Board 1 know personally from having served as Sheriff in Buncombe
County for the past twelve years. Their standing in our community, in my opinion, is very
strong and I believe the majority of those in our community would feel comfortable with
the proposed Board. I think they have the right mix of relationships with the community
and fiscal experience which a Board tasked with these responsibilities would need. The sale
of this hospital and the forming of this Board is of tremendous importance to the future of
Buncombe County and the surrounding communities. The fact that the current Mission
Board has approved each individual on the Board gives me a level of comfort as well. The
governance of this Board and what it means to our community will be of great importance
to our future. I believe the current slate of Board members for the Dogwood Health Trust
will be able to meet the challenge.

Thank you for your consideration in this matter, and 1 appreciate you for all you do for our
state.

Sincerely,

f.V. Duncan
Sheriff

/dc

Service • Accountability • Integrity • Professionalism • Dignity


STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER 0 U T S I D E 0 F N
C: 9 1 9 . 7 1 6 . 6 0 0 0
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WWW.NCDOJ.GOV

November 27, 2018

Sheriff, J.V. Duncan


Office of the Sheriff Buncombe County
60 Court Plaza, 4th Floor
Asheville, NC 28801

Dear Sheriff Duncan:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcai-e. At this time, my office is still working witli Mission Health Hospital to ensure that we
have received all necessary infonnation to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
n i l
COMMUNITY FOUNDATION
of Burke County
Board of Directors

Kelle B. Huffman
President

Chris T. Brittain
Vice President

NCN \ 3
Martha McMurray-Russ
Secretary

Phillip E. Church October 31, 2018


Treasurer

Elizabeth W. Andrews

The Honorable Josh Stein


John F. Black, Jr
9001 Mail Service Center
J. Rountree Collett, Jr. Raleigh, NC 27699-9001
Richard L. DeAugustinis
Dear Attorney General Stein:
John M. Hellman
I am pleased to provide a letter of support for the acquisition of Mission Health by HCA
Naomi W. Hunt
Healthcare (HCA).
M. Alan LeCroy
It is our understanding that this transaction will provide the following benefits to our
J. Mark Rostan community:
Rev. Diana Spangler-Crawford
• increased behavioral health services;
• establishment of the Dogwood Health Trust to benefit counties served, including
David R. Wiese those without a Mission Health hospital in their county;
V. Otis Wilson, Jr
• adoption of the HCA charity care policy which is more generous than the
current policy offered by Mission Health;
Board Members Emeritus
John T. Branstrom
• local input through the creation of advisory boards; and
William M. Brinkley • a broad spectrum of specialty areas and services.
Cynthia H. Callaway
Sterling R. Collett, III
Mission Health currently maintains a primary care office in Burke County and residents
R Paul Deaton
utilize specialty services provided by Mission Health in Asheville that are not available
Elisabeth C. Ervin
John W. Ervin, Jr
locally.
Le N. Erwih
J. Hugh Fletcher The Foundation is committed to working with both Mission Health/HCA and Carolinas
C. Michael Fulenwider Healthcare Systera Blue Ridge to ensure that our residents have access, quality care,
Doris L. Fullwood and options for all their healthcare needs.
Susan L. Haire
Charles E. Horton
Jack B. Kirksey
Sincerely yours.
James E. Lowdermilk
Donald J. McCall
Nettie M. Mcintosh
Marcus W.H. Mitchell, Jr. Nancy W. Taylor
W. Harold Mitchell Executive Director
Barbara G. Norvell
Susan C. Pollpeter
205 North King Street
James H. Rostan •
Post Office Box 1156
Derinda R Stiene
Morganton, N C 28680
Benjamin S. Succop
Robert T. Turner, II
Tel (828) 437-7105
Edward D. Wall
Fax (828) 437-0433
Emily Williamson Gang!
Otto H. Woerner www.cfburkecounty.org
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
0UTSIDE 0 F NC:
ATTORNEY GENERAL 9001 MAIL S E R V I C E C E N T E R 919.716.6000
FAX:
RALEIGH, N O R T H C A R O L I N A 2 7 6 9 9 - 9 0 0 1 919.716.6050

WWW.NCDOJ.GOV

November 27, 2018

Ms. Nancy W. Taylor


Executive Director
Community Foundation of Burke County
205 North King Street
Morganton, NC 28680

Dear Ms. Taylor:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

1 hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
^CAREPARTNERS
FOUNDATION "•v nn/

NOV I 3 p f j i ^

O c t o b e r 31, 2 0 1 8 ..

CarePartners Foundation assures


the availability of funds for post-
The Honorable Josh Stein
acute healthcare in W N C to fund
vital services provided by 9 0 0 1 Mail Service C e n t e r
CarePartners. Raleigh, NC 2 7 6 9 9 - 9 0 0 1

Board of Directors

Officers Dear A t t o r n e y General Stein:

William Lewin, CPA, CGMA, As an i n d e p e n d e n t c o m m u n i t y f o u n d a t i o n in W e s t e r n North Carolina,


Chair
C a r e P a r t n e r s Foundation writes t o you t o d a y in s u p p o r t of t h e f o r m a t i o n of
Gay P. Vinson, JD, Chair-elect
H. Denniston Crews, M.D., Dogwood Health Trust (DHT) and its b o a r d . For o v e r 30 years, C a r e P a r t n e r s
Secretary Foundation has b e e n c o m m i t t e d t o preserving t h e availability of p o s t - a c u t e
Jeff Gould, Treasurer h e a l t h c a r e in WNC. It is o u r belief t h a t t h e f o r m a t i o n of Dogwood Health Trust,
Charles Campbell, Past Chair
with t h e i r a t t e n t i o n t o social issues t h a t are d e t e r m i n a n t s t o overall health, will
Directors allow C a r e P a r t n e r s Foundation t o c o n t i n u e o u r mission t o improve t h e health
and well-being of p e o p l e in o u r c o m m u n i t i e s .
Dewey Andrew
Brady Blackburn
C a r e P a r t n e r s Foundation has closely followed t h e details related t o t h e
Elizabeth Cozart
Kathryn Daughton, RN, MEd f o r m a t i o n of Dogwood Health Trust and truly believe DHT will e n h a n c e t h e
Kerry Friedman, JD delivery of h e a l t h c a r e f o r all citizens in o u r region. As DHT c o n t i n u e s t o finalize
Matt Groome, CPA, CFP, QPFC its board of directors, w e are c o n f i d e n t it will c o n t i n u e t o b e filled with
David W . Hart, CFP
m e m b e r s w h o a r e well e d u c a t e d in t h e n e e d s of WNC, and w h o a r e d e d i c a t e d
Donna Flastie
David L. Hayes t o improving t h e lives of all r e s i d e n t s w h o live in t h e 18 c o u n t i e s of o u r region.
Thomas B. Irwin
Rendi Mann-Stadt, JD Thank you f o r y o u r t i m e and a t t e n t i o n in reviewing o u r l e t t e r of
Catherine Metzger r e c o m m e n d a t i o n f o r t h e Dogwood Health Trust. W e w e l c o m e any q u e s t i o n s
Isaac Owolabi, Ph.D. you may h a v e regarding this issue.
Lowell Pearlman
Marcia Schroeder, ANP
Lary A. Schulhof, M.D.
Susan Van Tassel, PharmD Sincerely,

Ex ojficio
Scott W. Buchanan
President

L Y
Scott Buchanan William Lewin
President & CEO Chair, C a r e P a r t n e r s Foundation Board

20 Rotary Drive • Asheville, NC 28803


Mail: PO Box 25338 • Asheville, NC 28813
Phone: 828.277.4815 • Fax: 828.277.4814
www.carepartnersfoundation.org
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
0UTSIDE OF NC:
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER 919-716.6000
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919.716.6050
WWW.NCDOJ.GOV

November 27, 2018

Mr. Scott Buchanan


President & CEO
CarePartners Foundation
PO Box 25338
Asheville, NC 28813

Dear Mr. Buchanan:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
• Attorney General of North Carolina

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Mov 09 18 10:49p Brevarg Transxlvania Cham 8 2 8 8 8 3 8 5 5 0 p«l

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NOV I 3 .

November 6, 2018

The Honorable Josh Stein


9001 Mail Service Ceriter
Raleigh, NC 27699-9001

Re: Mission Health and HCA Health Transaction

Dear Attorney General Stein,

Transylvania Regional Hospital is vital to our small, rural community. Based on the ever-changing healthcare
industry and the relatively recent acquisition of the hospital by Mission Health, the future of this facility and
healthcare options for Transylvania County have been common topics locally the last few years.

Since the announcement of the planned Mission Health and HCA Health Transaction, we have done our best to
inform ourselves on what this might mean for our community. While it is impossible to know all of the details
and make all of the correct assumptions on how things will play out, we have done our best to assess how this
will impact the future of healthcare in Transylvania County versus other likely outcomes. With that in mind,
the Brevard/Transylvania Chamber of Commerce supports this transaction and believes it will be in the best
interest of our community.

Specifically, we believe the short-term impact of the Member Legacy Foundation distribution as welt as the
creation of the Dogwood Health Trust will provide meaningful and necessary investment in healthcare for
Transylvanians. Additionally, we feel the protections to our rural hospital remaining in our community are as
strong as they could possibly be in a transaction of this nature. Finally, we feel that the Innovation Fund is
likely to provide a high level of modern healthcare to our community,

We are writing you in hopes that you will approve the Mission Health and HCA Health transaction in a timely
manner. Thank you for your consideration.

Best regards.

TracieTrusler
President, Brevard/Transylvania Chamber of Commerce
S T A T E OF N O R T H CAROLINA CONSUMER PROTECTION
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FAX; 9 1 9 . 7 1 6 . 6 0 5 0
RALEIGH, NORTH CAROLINA 27699-9001
WWW.NCDOJ.GOV

November 27, 2018

Ms. Tracie Trusler


President
Brevard/Transylvania Chamber of Commerce
175 E. Main Street
Brevard, NC 28712

Dear Ms. Trusler:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to H C A
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we w i l l carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence w i l l be included in our file and w i l l assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
McDowellx Tech Dr. John Gossett, President
c o m m u n i t y c o l l e g e
•foir L-i'p®/
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: NOV-9>Oi3
October 30,2018 [
NCPT c r i ^ ' . j ,

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein,

I'm writing today to express my support of the proposed Mission Health and HCA Healthcare
transaction.

I've lived in western North Carolina since 1985, when I moved here to attend graduate school in Boone.
I've lived primarily in Watauga and Avery Counties, and am currently a resident of McDowell County.
My 30 year career has been within the NC Community College System, whose purpose is to train
individuals to work in the local communities in which we live. Our focus is unique from that of a
University system, which tends to train individuals to seek job opportunities more broadly across the
nation and even internationally.

As President of McDowell Technical Community College strong community partnerships are vital to us,
especially in rural North Carolina. Even more, having access to local clinical sites, such as our local
community hospital, for students in healthcare programs is crucial.

Many communities across the nation do not have a hospital and so many small hospitals are closing.
Small communities in WNC, like McDowell, are very fortunate to have such an outstanding local hospital
that can provide services close to home. As the population of older adults continues to increase,
especially in our region where it is already significantly higher and is predominantly a retirement area,
access to healthcare locally across our region will become even more important. I'm confident that the
strong rural provisions in the Mission-HCA agreement will provide significant protection from program
and facility closures. We don't have those have protections today without this transaction.

I strongly urge your favorable review of this transaction. Simply put, I believe this is a great opportunity
for WNC.

Sincerely,

) r John D. Gossett
President, McDowell Technical Community College

54 College Drive Marion, North Carolina 28752 | P 828-652-6021 | F 828-652-1014 | www.mcdowelltech.edu


STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN D E P A R T M E N T OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC; 9 1 9 . 7 1 6 . 0 0 0 0
FAX: 9
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 19-716-6050
WWW.NCDOJ.GOV

November 27, 2018

Dr. John D. Gossett


President
McDowell Technical Community College
54 College Drive
Marion, NC 28752

Dear Dr. Gossett:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
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November 5, 2018

The Honorable Josh Stein


Attorney General's Office
9001 Mall Service Center
Raleigh, NC 27699-9001

Dear IVIr. Attorney General,

On behalf of the Morganton City Council, I am writing in support of the Mission-


HCA transaction and the formation of Dogwood Health Trust. Western North Carolina
needs quality healthcare and approval of this transaction will help to ensure that citizens
have access to needed services.

We are pleased about the 10-year commitments to existing facilities to ensure a


smooth transition for the users. The commitment to a new inpatient behavioral health
hospital in Asheville is of particular interest as the need for in-patient care continues to
be an issue in this part of our State. We are especially excited that this facility will serve
children. Continuing community advisory participation through local boards should also
contribute to a smoother transition and improved services as locals understand
community needs best.

Finally, the Innovation Fund is exciting as Western North Carolina's economy can
greatly benefit from healthcare jobs related to research and cutting edge innovation.
Morganton is the future home of the second campus of the North Carolina School of
Science and Mathematics (NCSSM). A partnership between the students and faculty of
NCSSM-Morganton with the opportunities that will be available through the Innovation
Fund could be significant.

The Dogwood Health Trust will be another source for our western North Carolina
communities to seek partnerships to make our end of the state healthier, both physically
and economically.

Once again, please consider approval of the Mission-HCA transaction.

Sincerely,

Ronnie Thompson
Mayor

T e l e p kone ( 8 2 8 ) 4 3 8 - 5 2 2 8 3 0 5 E U n i o n Street, S u i t e A l O O Post office Box 3 4 4 8


c i t y m a y p r @ ci. m o r g a n t o n . n c . us Morganton, N C 2 8 6 5 5 Morganton, N C 28680-3448
S T A T E OF N O R T H C A R O L I N A CONSUMER PROTECTION
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WWW.NCDOJ.GOV

November 27, 2018

Mayor Ronnie Thompson


City o f Morganton
PC Box 3448
Morganton, N C 28680-3448

Dear Mayor Thompson:

Thank you for contacting me regarding the proposed sale o f Mission Health to H C A HealthCare,
Inc. It is good to hear from you.

Earlier this year H C A Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that H C A Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part o f healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects o f Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale o f Mission Health to H C A
Healthcare. A t this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we w i l l carefiilly review it.

Comments like yours provide critical feedback that ensure we hear the full range o f issues. Y o u
can rest assured that your correspondence w i l l be included in our file and w i l l assist in the
thorough review o f this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters o f concern.

Sincerely,

Josh Stein
Attorney General o f North Carolina

JS/tms
Frank Porter
305 Country Club Circle
Brevard, NC 28712
Novembers, 2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001
Fax; 919-716-6750

Dear Attorney General Stein,

I am the General Manager and City Executive in Brevard for Comporium, a communications company
based in Rock Hill, SC. I also serve as Vice Chair of Transylvania Regional Hospital's Board of Directors
and am honored to have been selected as a member of the Legacy Board for Transylvania Regional
Hospital so that I may continue to work on behalf of the hospital.

I'm writing today because I feel the selections for the initial board members of Dogwood Health Trust
are an excellent starting point. This group - many of whom are past leaders of Mission's Board - is
highly respected and should be given every opportunity to build a team to carry out Dogwood's mission
into the future. It was very important that the first board members be known for their integrity,
knowledge and understanding of the needs of WNC. This group certainly has that experience as well as
access to the highest level of information.

I feel it's important to reiterate that the board is not complete, and there will be many additional
opportunities to diversify the Dogwood Health Trust Board based on demographics in western North
Carolina. The leaders of the different communities have every right to put forward nominees. The
initial board members live, work, and in many cases, have lifelong ties to WNC. I believe nominees to
the board should have these qualifications.

I personally have trust in the leadership's choices and fully support their effort.

Sincerely,

Frank Porter, General Manager


Comporium - Brevard
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November 27, 2018

M r . Frank Porter
General Manager
Comporium
305 Country Club Circle
Brevard, N C 28712

Dear M r . Porter:

Thank you for contacting me regarding the proposed sale of Mission Health to H C A HealthCare,
Inc. It is good to hear from you.

Earlier this year H C A Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition tenns o f the agreem.ent require that H C A Healthcare spend $450 m i l l i o n
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-teriTi effects o f Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale o f Mission Health to H C A
Healthcare. A t this time, my office is still w o r k i n g w i th Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we w i l l carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range o f issues. Y o u
can rest assured that your correspondence w i l l be included in our file and w i l l assist in the
thorough review o f this proposed acquisition.

I hope this infonTiation was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters o f concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Bobbie Young
318 Forest Heights Drive
Marion NC 28752

November 6, 2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Attorney General Stein,

I wanted to write and tell you a bit about Mission Health, Asheville NC, and my experience with
a long relationship with the organization. I have served on the local board of Mission Hospital
McDowell, for 11 years. I extended my time on the board as Chairperson during a transition
with a new President. I now serve as Past Chairperson.

During my long time with the board at McDowell, I have met and worked with many, many
board members and administrative staff at Mission. Except for the two newest members of
Dogwood Health Trust, I know personally all the members of the Dogwood Health board and
met with many of them quarterly on a Regional Health Committee at the offices in Asheville.
During that tenure, I looked forward to those meetings with other board chairpersons, as we
discussed regional issues for all five member hospitals with Mission Hospital. Mission Hospital
is an extraordinary organization that Mission Hospital McDowell and McDowell county is so
proud to be associated with.

The Dogwood Health Trust board is truly a dedicated group, made up of community members
who are committed to their neighbors. Most are locals who grew up here.
All are here because they have chosen to live in the communities they serve. They want to see
everyone have a better life, beginning with access to good health care available to all. All could
choose to live and work elsewhere. I see the commitment every day from these who volunteer
their time and talents. I believe we are just at the beginning of changes for engaging our
communities in creating pathways to opportunities to achieve better health outcomes. I
certainly believe the Dogwood Health Trust members will strive to find great health
opportunities for us all. As the board evolves, I believe all of us will recognize what a wonderful
commitment these have given that will shape us for the future.

Thank you so much for your vision for our future.

Sincerely,

Bobbie Young ^
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VWVW.NCDOJ.GOV

November 27, 2018

Mrs. Bobbie H. Young


3424 Forest Brook Drive
Charlotte, N C 28208

Dear Mrs. Young:

Thank you for contacting me regarding the proposed sale o f Mission Health to H C A HealthCare,
Inc. It is good to hear from you.

Earlier this year H C A Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms o f the agreement require that H C A Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part o f healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects o f Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale o f Mission Health to H C A
Healthcare. A t this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we w i l l carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range o f issues. Y o u
can rest assured that your correspondence w i l l be included in our file and w i l l assist in the
thorough review o f this proposed acquisition.

I hope this infonnation was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters o f concern.

Sincerely,

Josh Stein
Attorney General o f North Carolina

JS/tms
JAMES E. MAURIN

November 6, 2018

The Honorable Josh Stein


C': Ai'TO;
J
9001 Mail Service Center
Raleigh, NC 27699-9001
Fax: 919-716-6750

Re: HCA Acquisition of Mission Health and the


Dogwood Trust

Attorney General Stein:

i am writing you to express my support of the HCA acquisition of Mission


Health and the formation of the Dogwood Trust. By background, I am a member of
the Highland Cashiers Hospital Board of Directors. I have a home in Cashiers, NC
and live there 6 months of the year. I am a native of New Orleans, LA. I have a real
estate development business that is active in Cashiers as well as New Orleans and
the Gulf South.

Also, I believe that I have a unique perspective on the proposed transaction


between HCA and Mission Health, and the formation of the Dogwood Trust. I have
been a member of the board of directors of Ochsner Health System, based in New
Orleans, since 2005, and have served as its board chair for 4 years. Ochsner is the
largest health system in Louisiana, not for profit, and 10 years ago, it was the same
size as Mission Health. Since 2005, Ochsner has grown to a $5 billion system
through the acquisition of over 15 hospitals from for profit systems and small
community service district hospitals. The markets we serve look very much like
western North Carolina: many small to medium size communities with a high
percentage of Medicaid and Medicare patients. Because of scale, Ochsner has
achieved a level of quality and profitability that assures that it will serve rural markets
in Louisiana for years to come. I am proud to have been a part of that happening.

Because Mission has not be able to achieve sufficient scale on their own, I
believe that they have no choice other than to be acquired by a system that has
scale. HCA is the largest health care system in the country, and Ochsner competes
with them in Louisiana. They are very community focused, even in small
communities, and have the knowledge and experience to profitably own and manage
a rural health care system. In my opinion, with the direction that health care has
taken since the Affordable Care Act, standalone rural and service district hospitals
will no longer exist in the near future. Mission has no other option than to merge or
affiliate with a larger hospital system.
The Dogwood Trust is one of the benefits of a not for profit system selling to a
for profit system. I understand that the Trust assets from day one will exceed $1.5
billion. That is an extraordinary amount of money to support health and well-being in
an 18 county region. I see it as a real game changer for health in the region that
Mission Health serves. With HCA and Dogwood Trust, the quality of health care in
this rural part of North Carolina will be significantly enhanced.

The Dogwood Trust board is impressive. It is made up of successful people


who for the most part live full time in the region, and most importantly understand
healthcare in the region. For Highland Cashiers hospital, we are proud that our
current board chair, Sam Lupas, has been nominated to the board of Dogwood. For
our community, he is an outstanding selection. He will resign from our hospital board
and have no afiniiation with HCA. Working with Dogwood, he has the skill set needed
to improve healthcare in our area. I will continue to work with him as a member of the
Highland Cashiers community board.

In summary, I fully support the HCA-Mission transaction, and the formation of


the Dogwood Trust, and its initial board of directors.

Regards,

James E. Maurin, Founder and Past Chairman


Stirling Properties, Inc.

Board member. Highland Cashiers Hospital

JEM/mw

Contact Information:
James E. Maurin
109 Northpark Blvd., Ste. 300
Covington, LA 70433
Phone: 985-246-3712
Email: jmaurin@stirlingprop.com
STATE OF NORTH CAROLINA CONSUMER PROTECTION
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ATTORNEY GENERAL 9001 MAIL SERVICE CENTER 0UTSIDE 0 F NC:
919-716.6000
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 9 1 9 ^LE.EOSO
WWW.NCDOJ.GOV

November 27, 2018

Mr. James E. Maurin


109 Northpark Blvd, Suite 300
Covington, LA 70433

Dear Mr. Maurin:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fond that would invest in new
methods to provide healthcare. As you laiow. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
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JOSH STEIM DEPARTMENT OF JUSTICE NCSMTESOW6
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,RAX 1 9 7 1 6 6 0 5 0
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 - 9 - -
WWW.NCDOJ.GOV

November 27, 2018

Mr. K. Ray Bailey


34 Shadow Drive
Fairview, NC 28730

Dear Mr. Bailey:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefiilly review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
MOV ! 4 /I't.j
Center for Life Enrichment 1 L
P.O. Box 2046
Highlands, NC 28741
828-526-8811
clehighlands@yahoo. com
www. clehighlands. com

The Honorable Josh Stein


Attorney General of the State of North Carolina
9001 Mail Service Center
Raleigh North Carolina, 27699-9001

November 6, 2018

Dear Attorney General Stein:

It is most important that we continue to have a functioning hospital in Highlands and I am


extremely concerned about the proposed sale by Mission Health System to Hospital Corporation
of America. The health of our community is dependent on having our hospital as it now is, and
so is the economy of the Town of Highlands. I therefore ask you to require the following changes
in the transaction as proposed;

1. Require all facilities of the Highlands-Cashiers Hospital to be kept open and services not
reduced from those now provided for a period of ten years.
2. Require the members of the Dogwood Health Trust board of directors to be independent of
Mission or HCA and to be broadly representative of the eighteen-county region that
Dogwood is created to serve.
3. Require Dogwood to be subject to requirements such as those contained in the open
meetings and open records of law of the State of North Carolina.
4. Require the $15 million that Mission has said it will give to the Highlands-Cashiers
Hospital Foundation to be paid to the Foundation at the time the transaction is closed.
5. Require that if HCA decides to sell the Highlands-Cashiers properties that a local
Highlands entity have the first option to purchase them before they can be sold to anyone
else.

I am thankful for the opportunity to write you about this. We are counting on you to save our
hospital!!

Sincerel

Ed Mawyer,
President, Center for Life Enrichment
1
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November 27, 2018

Mr. Ed Mawyer
President
Center for Life Enrichment
PC Box 2046
Highlands, NC 28741

Dear Mr. Mayer:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agi-eement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessaiy information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Waynesville; 828-452-1447
Sylva: 828-586-2345
MOUNTAIN Waynesville Facsimile: 828-452-9454
Sylva Facsimile: 828-586-9401
PROJECTS
Helping People Help Themselves
A Community Action Agency

oiv,
""•"l
November 7 , 2 0 1 8
J 4 Ilp
The Honorable Josh Stein I I w
I _
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Honorable Josh Stein,

I am excited to offer a letter of support for the establishment of t h e Dogwood Health Trust. As a
Community Action Agency, we have served t h e community more than fifty years with a mission of
promoting independency and self-sufficiency. We employee more than 140 staff across seven counties
and touch the lives of more than 100,000 with our programs, grants and services.

The potential establishment of t h e Dogwood Health Trust offers so much potential for regional efforts in
our mountain region. Often, many across t h e state fail to realize how neglected this region can be when
it comes to funding and decisions. Mission Health Care has always represented a regional approach.
The Dogwood Trust certainly has the potential to carry out that tradition.

Thank you for your time and consideration of establishing this much needed resource for Western North
Carolina.

Sincerely,

Patsy Davis
Executive Director

Cc: Ashly M. Magg, MPA

PD/ae

We P r o v i d e t h e Tools t o C h a n g e P e o p l e ' s Lives

2177Asheville Road, Waynesville, NC 28786 25 Shulman S t r e e t , Sylva, NC 28779


Web Address: w w w . m o u n t a i n p r o j e c t s . o r g EOE/AA
STATE OF NORTH CAROLINA CONSUMER PROTECTION
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FAX:
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WWW.NCDOJ.GOV

November 27, 2018

Ms. Patsy Davis


Executive Director
Mountain Projects
2177 Asiieville Road
Waynesville. NC 28786

Dear Ms. Davis:

Thank you for contacting me regarding tiie proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
•lOV I 5 20!8 :

BILTMORE FARMS"
Established 1897 GEORGE H . V . CECIL
CHAIRMAN
November 12, 2018

The Honorable Josh Stein


9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein:

My family's legacy, beginning with my grandfather, George Vanderbilt, is a source of


great pride, and I recognize its importance to western North Carolina.

In addition to my Chairmanship of Biltmore Farms LLC, 1 have served on numerous


Boards in order to support and give back to the community I hold so dear. I have served on
boards within the healthcare community, such as Memorial Mission Hospital (which is,
incidentally, a "descendent" of the Biltmore Hospital founded by my grandfather), Mission
Healthcare Foundation, and UNC Hospitals, where I was one of the founding members of the
Board. I also was a member of the NC Medial Care Commission for 25 years.

While I have a natural bias with respect to my son, I feel that the Board being assembled
to run The Dogwood Health Trust is composed of members who not only are knowledgeable
about Health and Hospitals, but also have the needs of the citizens of western North Carolina
very much in mind. The members chosen so far have broad experience in the health field and
wall represent everyone vnth no "axe to grind" for any particular group. This, in my mind, is
MOST important. Let me also point out that the Board is not complete, at this time, and will,
in due course, be thoroughly representative insofar as is humanly possible. A Board such as
this must have a broad view, even if at variance with certain groups. I am very confident that
the final composition of this Board vdll exemplify the foregoing.
This opportunity is far too great to be missed. While.no one can foresee the future, I
have complete confidence that the members of this Board Wilt-perform in a manner that will
be a credit to western North Carolina and will in the long run impact the health and well-
being of this part of the State for generations to come. .

I respectfully ask for your support of this transaction and the Dogwood Health Trust
as well as your consideration of this additional perspective.
Sincerely,

George H.V. Cecil

COMMERCIAL COMMUNITIES HOMES HOTELS


One Town Square Boulevard, Suite 330, Asheville, NC 28803-5007 • PO Box 5355, Asheville, NC 28813-5355 • Phone: 828-209-2000 • Fax: 828-209-2150
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9 0 0 1 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050
WWW.NCDOJ.GOV

November 21, 2018

Mr. George Cecil


Chairman
Biltmore Farms
PC Box 5355
Asheville, NC 28813-5355

Dear Mr, Cecil;

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working wijji Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
•r •'

Blue Ridge 6 2018

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G E N E R A L

Serving Avery, Mitchell and Yancey Counties


The Honorable Josh Stein
9001 Mail Service Center
Raleigh, NC 27699-9001
November 13,2018
Re: Mission Health and HCA Transaction

Dear Attorney General Stein,


As a concerned community member and nonprofit leader, 1 am writing to share a few thoughts about the Mission
Health and HCA Healthcare transaction.
I have been a resident of Yancey County since 1990 and Executive Director of the Blue Ridge Partnership for
Children (BRPFC) for the past 20 years. During this time, I have had the privilege of working with local agencies
and community groups to improve the quality of life for Avery, Mitchell and Yancey county children and their
families. Over the years, BRPFC has led multiple collective impact initiatives, and 1 have witnessed first-hand the
capacity of our community to impact social determinates of health and well-being.
Affordable, available health care services are often identified as challenges for our families with young children.
With an already limited access to health care services, it is understandable that a change such as the sale of Mission
Health to HCA would generate conversation and concern within our commimity.
1 understand you have received comments/concerns from advocacy groups in Yancey and Mitchell counties, and I
appreciate your diligence and that of your office in providing citizens a mechamsm for having our voices heard. The
Dogwood Health Trust has the potential to provide significant resources to our community and if appropriately
managed can help build a stronger, healthier population throughout the region.
Regarding the Dogwood Health Trust Board of Directors, 1 can speak as the Executive Director of a nonprofit
agency, and have witnessed firsthand the value of an engaged, experienced Board of Directors. While 1 have not had
the opportunity to know all of the proposed Dogwood board members personally, 1 do know Martha Tyner of
Yancey County through a business relationship with our agency. I am confident that she will bring extensive
knowledge of our community and our local hospital system to the Board. The qualifications and backgrounds of the
other board members currently Usted also seem to exhibit the experience and working knowledge of managing an
organization with the financial capacity proposed for Dogwood Trust. Our agency is prepared to partner with the
Dogwood Health Trust to further our shared missions to positively impact the social determinates of health and well-
being throughout the region, and particularly in our rural commumties that lie beyond the boundaries of Buncombe
County.
Although the ultimate outcome of healthcare services in our rural communities remains difficult to predict, 1 believe
this transaction, with the proper guidance and administration, brings unprecedented opportumties for improvement in
the health status of the families and children that we collectively serve in Avery, Mitchell and Yancey counties.

Sincerely,

Jennifer W. Simpson '


Executive Director

PC Box 1587, Burnsville, NC 28714 p: 8z8.682.0047/755.z899 BlueRidgeChildren.org


a partner in the
smart start network.
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
F :
RALEIGH, N O R T H CAROLINA 2 7 6 9 9 - 9 0 0 1 , . ^ 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Ms. Jennifer W. Simpson


Executive Director
Blue Ridge Partnership for Children
PO Box 1387
Bumsville, NC 28714

Dear Ms. Simpson:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
FttCkf .
CywSUMEB PPoiEOTmu niu

Attorney General Josh Stein MM 2 0 2018


Attorney General's Office
NUKIHCAR6UNA
9001 Mail Service Center J3EPT OF ATTORfgY B F M F R A I

Raleigh, NC
27699-9001

Dear Mr. Stein,


1 am writing in regards to the HCA/Mission acquisition as it applies to Highlands Cashiers
Hospital, in Highlands, NC.
I know Mayor Pat Taylor has written you and outlined various points of concern the town has
about the acquisition, primarily about the future of the hospital and options should HCA decide HC
Hospital is no longer a viable part of its stable.
The mayor says he doesn't want services to deteriorate - unfortunately, they already have. I am
writing to see if you have any leverage to reverse the process as part of the HCA/Mission deal.
Highlands is a very affluent town that is home to year-round and second-home owners.
Ifs our tax money that fuels Macon County.
I recently had an emergency - which ended up being a and from
what I'm told was very serious.
Once I got to the place of treatment, all went well. That isn't the issue.
The issue is once diagnosed, I had to wait three hours for an ambulance to take me down the
mountain to Angel Medical Center in Franklin where "little" surgeries are now done.
The reason for this is about 5 years ago. Mission closed the surgical unit in Highlands. Angel in
Franklin or Mission in Asheville are now the only options for surgeries.
After waiting three hours for an ambulance, I then had t o endure the 45-minute ride down the
mountain in the ambulance, only to wait another two hours for the on-call surgical team to reconvene
at Angel. Since it took so long for me t o get transport down the mountain, the on-call staff (which is
the way it's done at Angel) had left.
While waiting for an ambulance, the ER doctor in Highlands was fuming... begging for transport
... and said if he at least had an ER surgery unit in Highlands, I could have been in and out.
As it was, I went into surgery at 10 p.m., after being diagnosed in Highlands at 4:30 p.m. The
surgery took 2 hours instead of one,
The point is. Warren Cabe, EMS director of Macon County can only do so much with the fleet of
ambulances he has at his command, taking care of a county the size of Macon. For instance, it takes 2
hours to drive from Highlands at the eastern end of Macon County to Nantahala at the western end.
Five years ago, when Mission closed the surgery unit. Highlands was a different place. Now
there are more full-time residents than ever before, second-home residents staying 6-8 months and
visitors staying Thursday through Sunday year-round.
Needs are different now; all of these people are potential patients.
Mine isn't the only story. Scores of people have experienced similar situations ... I just happen
to own a newspaper, so my story is being heard.
My doctor said people usually only have to wait an hour and half for an ambulance which 1 say
Is still too long, and that doesn't include the 45-minute drive down the mountain.
If we can't have an ambulance at our disposal up here on the top of this expensive, affluent
mountain, then we at least need an ER surgical unit for "little" surgeries which could also be manned
with on-call personnel, just like at Angel, if necessary.
Furthermore, the lack of dependable ambulance service is now affecting the real estate
industry, which besides tourism, fuels Highlands' economy, which in turn fills Macon County's coffers.
A man came to my office and told me that three of his friends, who bought into Highlands years
ago, are now selling and leaving because now that they are up in years and more in need of
dependable hospital services, they aren't available without traveling long distances. When they bought
in, they were.
As publisher of Highlands Newspaper, I put an open letter in the paper describing what
happened to me in hopes that it would spur some consideration and perhaps help change a
deteriorating situation.
I have two readers from out of state who read my paper on line, who say they are reconsidering
retiring in Highlands now.
Something needs to be done.
Perhaps you can help in some way.
When Mission closed the surgical unit, it did so because it said there wasn't enough business.
So, it was obviously a money thing.
However, HCA has lots of money and Highlands is a different place now.
Perhaps you could stipulate that for communities in Western NC like Highlands where
ambulances have to navigate curvy, mountain roads in all kinds of weather to get to a surgical unit...
and if there is a hospital in those communities capable of housing an ER surgical unit... HCA should
make it operational.
It would be a win-win. Citizens would have better access to healthcare and small, rural hospitals
could become a financial asset to HCA which would likely guarantee their long-term existence.
This would not only alleviate the load for the EMS department's ambulance fleet in rural,
mountainous counties but it would endear people to HCA and their local hospital.
I am enclosing a copy of the edition in which I ran the open letter (beginning on page 2) and the
subsequent edition with numerous letters-to-the-editor about the issue.

Kim Lewicki /O

Publisher
Highlands Newspaper
PO Box 2703
Highlands, NC 28741
828-200-1371 ~ highlandseditor@aol.com
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, N O R T H CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Ms. Kim Lewicki


Publisher
Highlands Newspaper
PO Box 2703
Highlands, NC 28741

Dear Ms. Lewicki:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $ 1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessaiy information, we will carefiilly review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
YostjJuli^

From: notification® prsOlhcrmpsOl.ic.local


Sent: Wednesday, November 21, 2018 3:48 PM
To: Consumer
Subject: Mission Hospital

Notes
Received on 11-19-18. Thanks!! Karen

Contact
Joseph Scotto
708 N Occoneche Av
Black Mountain, NC 28711
(919) 740-7655
j .scotto@hotmail.com

Message
Topic: TRAINING
Subject: Mission Hospital

Dear Attorney General Stein, Hello, My name is Joseph Scotto. I am opposed to allowing mission hospital to
change its ownership status. I am was a number of years ago and was saved by the excellent care of
mission and its doctor affiliates such as Ashville cardiology and Asheville heart. I believe keeping mission
ownership and management local and in contact with the people it serves is key to continuing its great
community service under local management and keeping costs down for its patients.
Thank you,
Joseph Scotto
j .scotto@hotmail.com
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE T O L L - F R E E IN NO: 877.566.7226
ATTORNEY G E N E R A L 9 0 0 1 MAIL SERVICE CENTER OUTSIDE OF NC: 919.716.6000
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050

WWW.NCDOJ.GOV

November 27, 2018

Mr. Joseph Scotto


708 N. Occoneche Avenue
Black Mountain, NC 28711

Dear Mr. Scotto:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fiind that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entit)'.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
From: notification@prs01hcrmps01.ic.local
Sent: Friday, N o v e m b e r 16, 2018 9:25 AM
To: Consumer
Subject: Mission Health Sale

Notes
Received on 11-3-18. Thanks!!! Karen

Contact
Robert Bryant
2405 Legacy Oaks Place
Asheville, NC 28803-4590
(828) 707-5298
rbryantl 122@gmail.com

Message
Topic: TRAINING
Subject: Mission Health Sale

Dear Mr. Stein,


I have concerns about the proposed sale to Mission Health Systems to a for profit company, HCA Inc. They are
1. health care across our region will suffer, especially for the economically stressed and 2. I've been told by
knowledgeable health care specialist who've studied sales that the composition of the Dogwood Board is slanted
to the Mission Board who approved the sale. I understand there is a public comment section for my concerns on
your website but I couldn't find it. Could you please transfer the above to that site.
Best regards,
Robert W. "Rusty" Bryant, Ph. D.
Asheville, NC
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050
WWW.NCDOJ.GOV

November 27, 2018

Mr. Robert Bryant


2405 Legacy Oaks Place
Asheville, NC 28803-4590

Dear Mr. Bryant:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments, like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Yost, Julie

From: notification@prs01hcrmps01.ic.local
Sent: W e d n e s d a y , N o v e m b e r 14, 2 0 1 8 8:45 AM
To: Consumer
Subject: HCA/Mission Merger
Attachments: HealthCenters_LetterReMissionAcquisition.pdf

Notes
Received on 11 -1 -18.1 may have sent this already yesterday. Thanks!!! Karen

Contact
No Name
bhall@feldesmantucker.com

Message
Good afternoon,

I hope you are well.

Thank you for returning my call yesterday. I am re-forwarding the email.

I'm sorry for the follow-up and bothering you with your busy schedule. When Carrie originally sent the email,
she received a notification that it may have not been delivered, so we wanted to confirm that you received it.

Can you please confirm receipt of this email?

I am looking forward to hearing from you!

Thank you,

Brittney Hall
Legal Assistant
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE; This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify bhall@feldesmantucker.com immediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.

From: Riley, Carrie Bill


Sent: Friday, October 26, 2018 4:10 PM
To: 'jharrod@nc.doj.gov' <jharrod@nc.doj.gov>; 'ncago@nc.doj.gov' <ncago@nc.doj.gov>
Subject: Letter from Western NC Health Centers Re HCATMission Merger

Good afternoon.

My name is Carrie Riley and I am an attorney submitting the attached on behalf of the organizations named in
the letter.

As requested in the attached, we propose coordinating a call to discuss the matter further. Your time and review
is much appreciated.

Sincerely,
Carrie

Carrie Bill Riley


Partner
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anye«e other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify criley@Feldesmantucker.com immediately and delete the e-mail, any
attachrhents, and all copies from any drives or storage media and destroy any printouts.
O c t o b e r 26, 2018

Josh Stein, Attorney General


Attorney General's Office
9 0 0 1 Mail Service Center
Raleigh, NC 2 7 6 9 9 - 9 0 0 1

Dear Mr. Stein:

We are writing t o you on behalf of Blue Ridge Community Health Services, High Country
Community Health, W es tern North Carolina Community Health Services, and Bakersville Community
Health Center, each of which is located in w e s t e r n North Carolina and is a federally qualified health
c e n t e r (FQHC). Our organizations have a long history of providing care f o r t h e most vulnerable
populations in o u r region, with a particular focus on serving low-income, uninsured, agricultural
workers, and homeless persons.

On average, our organizations have b e e n o p e r a t i n g as FQHCs f o r over 25 years, and each of our
organizations has b e e n designated as a patient c e n t e r e d medical h o m e by t h e Joint Commission or t h e
National C o m m i t t e e for Quality Assurance (NCQA). In addition t o being recognized f o r our provision of
high quality primary care, our organizations have a history of working collaboratively with o t h e r h u m a n
service organizations t o improve t h e health and well-being of t h o s e living and working in t h e
c o m m u n i t i e s w e serve.

As FQHCs receiving grants or look-alike designation f r o m t h e Health Resources and Services


Administration (HRSA) within t h e D e p a r t m e n t of Health and Human Services (DHHS), w e are statutorily
obligated t o furnish a broad range of primary and preventive health services, including o u t r e a c h , and t o
assure t h a t no patient will be denied health care services d u e t o an individual's inability t o pay for such
services. W e also offer a broad range of behavioral health services, including s u b s t a n c e abuse and
t r e a t m e n t services. Together, w e provide care for over 60,000 low-income adults and children (<200%
Federal Poverty Level), with over 20,000 living in poverty (<100% Federal Poverty Level). Over 30,000
uninsured individuals rely on our health centers for their care. W e are c o m m i t t e d t o continuing to serve
as t h e primary safety net providers for w e s t e r n North Carolina and t a k e pride in o u r ability t o work
cooperatively in t h e best interests of t h e patients w e serve.

It is in t h a t spirit t h a t w e write this letter t o express our significant c o n c e r n s a b o u t for-profit


HCA Healthcare's potential acquisition of Mission Health. Specifically, w e are c o n c e r n e d t h a t t h e
p r o c e e d s resulting f r o m t h a t sale will not be allocated equitably, supporting t h e established safety net
providers in t h e region and benefitting t h e residents of w e s t e r n North Carolina. Rather, as described
below, we anticipate t h a t t h e p r o c e e d s will be allocated in a m a n n e r t h a t f u r t h e r s t h e interests of HCA,
Mission, and Mission's partners. In addition, w e believe t h a t Mission and HCA intend t o t r a n s f e r most, if
not all, of t h e t w e n t y Mission Medical Associates (MMA) o u t p a t i e n t primary care clinics t o an existing
FQHC t h a t maintains close ties with Mission, as described below. This t r a n s f e r would significantly
increase Medicaid costs in w e s t e r n North Carolina, w i t h o u t achieving any meaningful expansion of
service t o medically underserved populations or quality i m p r o v e m e n t .
1
While t h e c r e a t i o n of a $1.5 billion F o u n d a t i o n could p r e s e n t a r a r e o p p o r t u n i t y t o e n h a n c e t h e
health a n d well-being f o r t h e r e s i d e n t s of w e s t e r n North Carolina, it will not d o so if it is i m p l e m e n t e d in
a m a n n e r t h a t is d e c e p t i v e a n d only f u r t h e r s Mission and HCA's i n t e r e s t s . In this l e t t e r w e explain o u r
public i n t e r e s t c o n c e r n s .

Mission is Inteeraliv Tied w i t h a Single FQHC In t h e W e s t e r n N o r t h Carolina Region

In 2 0 1 4 Mission, in collaboration M o u n t a i n Area Health Education C e n t e r (MAHEC), e s t a b l i s h e d


a n e w c o r p o r a t i o n , M o u n t a i n Area Health C e n t e r nka Appalachian M o u n t a i n C o m m u n i t y Health C e n t e r
(AMCHC), t o a s s u m e o p e r a t i o n a l a u t h o r i t y o v e r certain MAHEC a n d Mission o u t p a t i e n t p r i m a r y c a r e
clinical practices. In 2015, AMCHC applied f o r a n d w a s a w a r d e d a HRSA g r a n t t o o p e r a t e as a FQHC.
The t r a n s f e r r e d Mission and MAHEC o u t p a t i e n t primary c a r e clinical practices w e r e included as "sites"
within t h e health c e n t e r p r o j e c t . Soon a f t e r AMCHC o b t a i n e d t h e g r a n t a w a r d , w e o b t a i n e d a copy of
t h e AMCHC g r a n t application and f o u n d t h a t it seriously m i s r e p r e s e n t e d n e e d s a s s e s s m e n t d a t a ,
inaccurately d e s c r i b e d existing primary c a r e practices in t h e c o m m u n i t y , falsely s u g g e s t e d t h a t it
m a i n t a i n e d collaboration a r r a n g e m e n t s with existing FQHCs, and did n o t properly disclose AMCHC's
relationship with Mission.

FQHC s t a t u s p r o v i d e d AMCHC (and its t r a n s f e r r e d Mission practices) with various b e n e f i t s , m o s t


notably special r e i m b u r s e m e n t f r o m M e d i c a r e a n d Medicaid b a s e d on its actual costs of providing
c o v e r e d services. The FQHC c o s t - b a s e d r e i m b u r s e m e n t r a t e s w e r e and a r e considerably higher t h a n t h e
f e e - f o r - s e r v i c e p a y m e n t s c h e d u l e s available t o Mission. Accordingly, t h e t r a n s f e r of t h e p r i m a r y c a r e
clinical practices r e s u l t e d in significant cost savings f o r Mission. Although Mission did n o t directly
o p e r a t e t h e t r a n s f e r r e d clinics, it r e t a i n e d indirect i n v o l v e m e n t a n d i n f l u e n c e by a s s u m i n g AMCHC
Board s e a t s and leasing p r o v i d e r capacity t o AMCHC.

W e strongly s u s p e c t t h a t t h e FQHC g r a n t application w a s n o t h i n g m o r e t h a n an a t t e m p t t o


c o n v e r t t h e Mission a n d MAHEC practices t o a FQHC s t r u c t u r e f o r t h e sole business p u r p o s e of
improving t h e i r r e s p e c t i v e b o t t o m - l i n e s , w i t h o u t any m e a n i n g f u l i n c r e a s e in access t o a f f o r d a b l e c a r e . 1
While w e c a n n o t confirm t h a t this w a s t h e i n t e n t , w e can only q u e s t i o n w h a t w o u l d h a v e m o t i v a t e d
MAHEC and Mission t o p u r s u e establishing a n e w FQHC, r a t h e r t h a n collaborating with t h e existing high
quality s a f e t y - n e t FQHCs t h a t had d e m o n s t r a t e d a n d d o c u m e n t e d t h e i r desire t o w o r k t o g e t h e r t o
e x p a n d c a r e in t h e region. It is o u r u n d e r s t a n d i n g t h a t since its initial FQHC d e s i g n a t i o n , AMCHC h a s
b e e n closely scrutinized by HRSA a n d has had n u m e r o u s findings of n o n - c o m p l i a n c e . In r e s p o n s e t o
such findings, HRSA h a s i m p o s e d several conditions on AMCHC's g r a n t , a n d has accordingly issued
several s h o r t e n e d p r o j e c t periods. It is i m p o r t a n t t o n o t e t h a t , since its FQHC d e s i g n a t i o n , AMCHC has
not m e a n i n g f u l l y e x p a n d e d access t o health c a r e services t o t h e medically u n d e r s e r v e d c o m m u n i t i e s in
w e s t e r n North Carolina, c o n s i s t e n t with t h e p u r p o s e s of t h e health c e n t e r project g r a n t . In 2017, only
18% of AMCHC p a t i e n t s w e r e u n i n s u r e d , a n d this w a s a decrease f r o m 2016.

It is i m p o r t a n t t o c o n s i d e r t h e historic relationship b e t w e e n Mission and AMCHC w h e n assessing


t h e HCA acquisition a n d , in particular, t h e role and i n d e p e n d e n c e of t h e Dogwood Health Trust.

1
The Mission Chief Executive Officer, as part of his 2012 Year in Review, s t a t e d publicly t h a t o n e of t h e health
system goals was t o "give" FQHC status t o MAHEC in o r d e r t o improve t h e financial positions of both organizations
"by millions" (by taking a d v a n t a g e of t h e FQHC r e i m b u r s e m e n t models).
2
T h e F o u n d a t i o n is Not I n d e p e n d e n t

Mission and HCA.have indicated t h a t t h e p u r p o s e of t h e newly c r e a t e d D o g w o o d Health Trust


will b e t o "dramatically improve the health and well-being o f all people and communities o f Western
North Carolina." Mission and HCA h a v e f u r t h e r s u g g e s t e d t h a t t h e selection of t h e initial d i r e c t o r s will
be c o n d u c t e d t h r o u g h a t r a n s p a r e n t p r o c e s s , p o s t e d on t h e Dogwood Health Trust w e b s i t e , with
r e p r e s e n t a t i o n f r o m across t h e region a n d s a f e t y n e t s y s t e m . However, t h e y h a v e failed t o n o t e t h a t
t h e D o g w o o d Health Trust will be d o m i n a t e d by Mission b o a r d m e m b e r s . Only o n e of t h e nine
a n n o u n c e d m e m b e r s has not s e r v e d on t h e b o a r d of t h e Mission s y s t e m or an affiliate institution. T h r e e
of t h e m e m b e r s a r e - c u r r e n t Mission b o a r d m e m b e r s , t h r e e are past b o a r d p r e s i d e n t s , a n d t w o h a v e
s e r v e d on t h e b o a r d s of individual Mission hospitals. Although t h e r e is technically a m e a n s t o n o m i n a t e
individuals via t h e Trust's w e b s i t e , w e h a v e r e a s o n t o believe t h a t such m e a n s a r e illusory. For e x a m p l e ,
it is o u r u n d e r s t a n d i n g t h a t m o s t of t h e b o a r d m e m b e r s w e r e a p p o i n t e d t o t h e D o g w o o d Health Trust in
May, long b e f o r e Mission a n n o u n c e d t h e f o r m a t i o n of t h e Dogwood Health Trust o r put o u t a call f o r
n o m i n a t i o n s f r o m t h e public. In a d d i t i o n , w e a r e a w a r e of s e n i o r executives f r o m w e s t e r n North
Carolina n o n - p r o f i t organizations w h o w e r e n o m i n a t e d t o s e r v e on t h e D o g w o o d Health Trust, n o n e of
w h o m have been contacted.

The lack of i n d e p e n d e n c e of t h e D o g w o o d Health Trust is d e e p l y c o n c e r n i n g given t h e


F o u n d a t i o n will receive $1.5 billion in p r o c e e d s , with an a n t i c i p a t e d $ 7 5 million in a n n u a l s p e n d i n g t o
a d d r e s s t h e social issues affecting t h e health a n d well-being of r e s i d e n t s t h r o u g h o u t Mission's w e s t e r n
North Carolina service a r e a .

W e had an o p p o r t u n i t y t o review t h e e n c l o s e d d o c u m e n t s , entitled "Problems with Mission-


Dogwood Structure and Governance," "SEARCH Position Paper on Conflicts o f Interest within the
Proposed Dogwood Health Trust Board," a n d "An Open Letter to Dogwood Health Trust and Dr. Ron
Paulus," which w e r e recently s e n t t o y o u . W e s h a r e t h e s a m e d e e p c o n c e r n t h a t t h e D o g w o o d Health
Trust is a c r e a t i o n of Mission and will n o t b e i n d e p e n d e n t of HCA.

T h e F o u n d a t i o n M a v I n e a u i t a b l v Favor S u p p o r t i n g AiVICHC

W e a r e particularly c o n c e r n e d by t h e D o g w o o d Health Trust's lack of i n d e p e n d e n c e given t h a t


Mission has m a i n t a i n e d close ties with AMCHC. For e x a m p l e . Mission's Executive Director of
A m b u l a t o r y Finance currently s e r v e s on t h e AMCHC Board of Directors, Mission's Chief O p e r a t i n g
Officer currently s e r v e s as AMCHC's Director of Eastern O p e r a t i o n s , and several AMCHC providers a r e
c o n t r a c t e d f r o m Mission Medical Associates.

It a p p e a r s t h a t maintaining links with AMCHC is a key f e a t u r e t o t h e acquisition. Despite t h e


f a c t t h a t Mission and Dogwood Health Trust l e a d e r s routinely s t a t e t h a t t h e F o u n d a t i o n will f o c u s o n
social d e t e r m i n a n t s of health, t h e Asset P u r c h a s e A g r e e m e n t specifically r e f e r e n c e s t h e F o u n d a t i o n ' s
and Mission's i n t e n t t o maintain a n d / o r establish relationships with FQHCs. For e x a m p l e . Section 7.3(b)
of t h e Asset P u r c h a s e A g r e e m e n t n o t e s t h a t t h e "Foundation shall be permitted to establish, organize,
and provide financial support or grants to any federally qualified health center or similar program." I n
a d d i t i o n . Section 7.3(f) explicitly r e f e r e n c e s c o n t i n u a t i o n of Mission's "current activities with
Appalachian Mountain Community Health Center." The t e r m "current activities" is v a g u e and u n d e f i n e d .
Although Section 7.3(b) broadly refers t o FQHCs, n o n e of us h a v e b e e n c o n t a c t e d by Mission o r
HCA r e g a r d i n g o p p o r t u n i t i e s t o c o l l a b o r a t e or t o provide input. W e s u s p e c t t h a t such l a n g u a g e w a s
included t o p r e s e r v e Mission's longstanding s u p p o r t of AMCHC, r a t h e r t h a n t o reflect a c o m m i t m e n t t o
s u p p o r t i n g o u r n e t w o r k of s a f e t y n e t providers.

AMCHC Will Likelv Expand W i t h o u t A M e a n i n g f u l I n c r e a s e in Access t o C a r e

As w e a r e c o n c e r n e d t h a t t h e Dogwood Health Trust is likely t o inequitably f a v o r s u p p o r t i n g


AMCHC o v e r t h e existing n e t w o r k of FQHCs, o u r g r e a t e r c o n c e r n p e r t a i n s t o t h e f u t u r e of t h e t w e n t y
MMA o u t p a t i e n t primary c a r e practices, which a r e located across t h e region, o f t e n directly within o u r
service a r e a s . Specifically, w e h a v e r e a s o n t o believe t h a t Mission a n d HCA intend t o t r a n s i t i o n
o p e r a t i o n a l a u t h o r i t y o v e r such o u t p a t i e n t primary c a r e practices t o AMCHC.

Although n e i t h e r Mission nor HCA h a v e a d d r e s s e d t h e m a t t e r publicly, t h e AMCHC Board Chair


has s t a t e d t o a local a t t o r n e y t h a t AMCHC is likely t o e x p a n d t o include t h e MMA o u t p a t i e n t primary
c a r e practices as a result of t h e acquisition. He has also a t t e n d e d o v e r 10 planning m e e t i n g s with
Mission's s e n i o r m a n a g e m e n t t e a m . To d a t e , n o n e of us h a v e b e e n c o n s u l t e d by Mission o r HCA
r e g a r d i n g t h e acquisition, let a l o n e b e e n included in key planning m e e t i n g s . Additionally, as m e n t i o n e d
a b o v e , t h e MMA Chief O p e r a t i n g Officer w a s recently c o n t r a c t e d t o s e r v e as t h e AMCHC Director of
Eastern O p e r a t i o n s . W e s u s p e c t t h a t this position w a s e s t a b l i s h e d a n d s t a f f e d by an MMA
r e p r e s e n t a t i v e t o assist in t h e transition of t h e MMA o u t p a t i e n t primary c a r e practices t o AMCHC.

This s t r a t e g y w o u l d e x p a n d AMCHC's reach far across w e s t e r n North Carolina. 2 W e a r e


c o n c e r n e d t h a t t h e e x p a n s i o n is financially m o t i v a t e d r a t h e r t h a n r o o t e d in an i n t e r e s t t o e x p a n d
r e s o u r c e s t o additional u n i n s u r e d individuals. As n o t e d a b o v e , traditional o u t p a t i e n t primary c a r e
practices in North Carolina receive p a y m e n t p u r s u a n t t o a Medicaid f e e - f o r - s e r v i c e p a y m e n t s c h e d u l e ,
w h e r e a s FQHCs a r e entitled t o a special r e i m b u r s e m e n t b a s e d on t h e i r actual costs of providing services
in recognition of o u r d e e p c o m m i t m e n t (and legal obligation) t o e x t e n d services t o u n i n s u r e d and
u n d e r i n s u r e d r e s i d e n t s of o u r service a r e a s . Although t h e FQHC r a t e varies a m o n g health c e n t e r sites,
w e can a s s u m e t h a t such r e i m b u r s e m e n t Will b e considerably higher t h a n t h e traditional f e e - f o r - s e r v i c e
p a y m e n t r a t e t h a t MMA c u r r e n t l y receives. This w o u l d n o t b e s o alarming if w e did not h a v e r e a s o n t o
believe t h a t t h e site t r a n s f e r s w o u l d b e " t u r n k e y " transitions, w h e r e t h e o u t p a t i e n t primary c a r e
practices w o u l d simply shift t o AMCHC with no t r u e expansion in services a n d access t o c a r e f o r
medically u n d e r s e r v e d p o p u l a t i o n s .

In 2012, m a n y s t a t e Medicaid directors, t h r o u g h t h e National Association of Medicaid Directors,


e x p r e s s e d t h e i r significant c o n c e r n s t o CMS a n d HRSA regarding t h e s e t y p e s of t r a n s a c t i o n s , noting t h a t
while in s o m e c a s e s health c e n t e r a n d hospital affiliations m a y increase access t o care, in o t h e r cases
affiliations may only result in g r e a t e r r e i m b u r s e m e n t f o r c u r r e n t access. This is precisely t h e situation
w e a r e f a c e d with in w e s t e r n North Carolina. If t h e MMA o u t p a t i e n t primary c a r e practices t r a n s f e r t o
AMCHC, w e do n o t a n t i c i p a t e any service e x p a n s i o n , y e t Medicaid costs w o u l d significantly increase.
This w o u l d be a s t e p b a c k w a r d s as t h e s t a t e w o r k s t o w a r d s achieving its quality-driven p a y m e n t r e f o r m
goals.

2
N o t e t h a t Section 7.3(b) of t h e Asset P u r c h a s e A g r e e m e n t indicates t h a t t h e Foundation m a y
"establish" or "organize" a n e w FQHC. W e s u s p e c t t h a t such l a n g u a g e w a s included t o provide Mission
with an a v e n u e t o transition all o r s o m e of t h e MMA o u t p a t i e n t primary c a r e practices t o FQHC s t a t u s in
t h e e v e n t t h a t HRSA r e j e c t s t h e addition of such "sites" t o AMCHC's FQHC s c o p e of project.
4
Next S t e p s

This traiisaction will impact t h e r e s i d e n t s of o u r region f o r d e c a d e s t o c o m e . Addressing t h e


a f o r e m e n t i o n e d c o n c e r n s is of p a r a m o u n t i m p o r t a n c e t o p r o t e c t t h e public i n t e r e s t . .

W e r e q u e s t t h a t you use y o u r a u t h o r i t y as t h e AG t o e n s u r e t h a t t h e F o u n d a t i o n b o a r d is truly


i n d e p e n d e n t . W e f u r t h e r r e q u e s t t h a t you r e q u i r e HCA a n d Mission t o disclose w h e t h e r t h e y intend t o
t r a n s i t i o n t h e MMA o u t p a t i e n t primary c a r e practices and, if so, h o w t h e t r a n s f e r s will result in t h e
e x p a n s i o n of access t o c a r e t o u n d e r s e r v e d p o p u l a t i o n s in t h e region. U n d e r any c i r c u m s t a n c e s , t h e
b r o a d e r n e t w o r k of FQHCs in w e s t e r n North Carolina s h o u l d be involved in discussions regarding next
steps.

W e h a v e e n g a g e d legal c o u n s e l f r o m F e l d e s m a n Tucker Leifer Fidell LLP, a law firm located in


W a s h i n g t o n , DC t h a t specializes in FQHC-related r e q u i r e m e n t s , t o assist in this m a t t e r . W e p r o p o s e t h a t
you a n d / o r t h e Assistant A t t o r n e y G e n e r a l c o o r d i n a t e a call with a t t o r n e y s J a c q u e l i n e Leifer a n d Carrie
Riley t o discuss t h e FQHC c o n s i d e r a t i o n s a n d o u r c o n c e r n s regarding t h e MMA practices. They can b e
r e a c h e d by t e l e p h o n e at (202) 4 6 6 - 8 9 6 0 or by email a t j l e i f e r @ f t l f . c o m and criley@ftlf.com.

On behalf of o u r health c e n t e r s , p a t i e n t s , and t h e c o m m u n i t i e s w e serve, t h a n k you f o r your


s u p p o r t and your c o n s i d e r a t i o n .

[Signatures on f o l l o w i n g page]
Sincerely,

Charles Shelton
Chief Executive Officer
Bakersville C o m m u n i t y Health C e n t e r

/ /• 7 . •>-'
J , (io
Richard H u d s p e t h , MD
Chief Executive Officer
Blue Ridge C o m m u n i t y Health Services

Alice S a l t h o u s e
Chief Executive Officer
High Country C o m m u n i t y Health C e n t e r

Carlos G o m e z
Chief Executive Officer
W e s t e r n NC C o m m u n i t y Health Services

Enclosures:
Problems with Mission-Dogwood Structure and Governance
SEARCH Position Paper on Conflicts o f Interest within the Proposed Dogwood Health Trust Board
An Open Letter to Dogwood Health Trust and Dr. Ron Paulus
Attachment 1

Problems with Mission-Dogwood Structure a n d Governance


MEMORANDUM

October 20, 2018

TO: Josh Stein, Attorney General


Jennifer Harrod, Special Deputy Attorney General

FROM: Carole Spainhour, Attorney, Elder Law Carolina

RE: Mission-Dogwood Structure and Governance

This memorandum is narrowly focused upon why it is a conflict of interest and


otherwise inappropriate for persons currently or formerly affiliated with Mission
Health to serve on the new Foundation board, and why the Board as constituted
cannot be rehabilitated and the process must be begun de novo, including revised
governance structure.

WHAT CAN BE DONE:

Using similar authority as that granted to the Attorney General under NC law, the
AGs in other states have used their powers to ensure that the Health Foundation's
board is truly independent of the management of the selling hospital. Some states
forbid by statute both the buying and selling entities from serving on the Board
because of the conflict of interest issues. There is a substantial risk that the
community will not receive full and fair value for the conversion of Mission
Health's hospitals and ancillary services if the funds are controlled by a foundation
that is linked to HCA/Mission management.

BRIEF STATEMENT OF THE PROBLEM:

The Board lacks the independence and the qualifications necessary to do the job
successfully, and its organizational documents, dravm by Mission Health's
attorneys, do not reflect best practices in Health Foundation board structure.

It is critical to community perception and proper oversight Off Ae Foundation, and


therefore its success, that the Foundation is a new entity without ties to Mission
Health. As now constituted by Mission Health's board, what we have is a re-

1 IP a « e
organization of the Mission Health board with a new name and a few added
members, but one which is essentially guaranteed to work closely with
HCA/Mission management.

DETAILS OF PROBLEMS:

First is the history of Mission Health in the Communities. The Mission Board
members, while charged with representing the interests of the communities
Mission serves, have acquiesced to Mission management's acquisition of rural
facilities and gutting their services. To the community's eyes, Mission Health
appears to have prioritized actions calculated to improve their industry ratings
rather than responding to the needs of the community. Before Mission took them
over, local residents poured money, time and care into building and running these
hospitals. Negotiations to purchase the facilities were typically conducted in secret.
Cuts in services were announced at the last possible minute. Mission brooked no
community discussion and offered canned responses to community outcries.
Mission has reneged on major promises to some of these communities (Franklin's
Angel Hospital, Spruce Pine's BRRH, Highlands Hospital.) Mission could be a
case study as a failure in public relations according to Bob Scott, Mayor of
Franklin. It is not only what Mission did, it was how they did it. For first hand
particulars. Bob Scott, Mayor of Franklin, Patrick Taylor, Mayor of Highlands, and
Theresa Coletta, Mayor of Bumsville are a good source. The Mission boards (both
local and central) who were responsible for these decisions have lost the trust of
those communities. Where Mission is concerned, people have learned to watch
what they do, not what they say.

Mission has a reputation problem in its home territory as well. It is telling that
when Mission challenged Blue Cross Blue Shield late in 2017 over its
reimbursement rates and stopped accepting BCBS insurance, Buncombe County
surveyed its 1400 employees and asked them if they wanted to stay with BCBS or
with Mission. The majority of respondents wanted to stay with BCBS not
Mission. * It doesn't take much digging to discover there is a great deal of distrust
on the part of Buncombe County residents toward Mission's leadership. Our
community has tolerated Mission's behavior ("bully" is a frequent descriptor)
because we received an acceptable quality of care. This may explain why the
apparent general apathy regarding the sale of Mission to HCA, Comments such as
"Mission has been a for profit system for years" are not uncommon. Dr. Paulus, in
speaking in early May to a group of 20 or so non-profits, said that Mission had the

2 IP a " e
financial wherewithal to continue on its present path for 20 years, but when the
BCBS matter arose, "we found out what the community really thought of us" and
decided it was time to sell.* As was pointed out by the Mary Black Foundation
speaker at the CO AH Forum on August 3, a Foundation needs reputational
capital in order to carry out its work. Mission's reputational capital deficiency in
the communities it serves clearly creates a serious handicap for Dogwood
accomplishing anything of substance much less "transformational work" in these
same communities.

Second is the issue of board member qualifications. Dr. Paulus and his team had
already chosen the focus of the foundation as "social determinants of health"
(SDOH). See Mission's Facebook Live #2 by Dr. Paulus and associates. Many
scholarly papers, including an expert cited by Dr. Paulus (Dr. Doug Easterling),
talk about the discormect between serving as a board member for an acute care
facility with a hierarchical structure, as contrasted to serving on a philanthropic
entity that must accomplish nothing less than changing a population's behavior if it
is to succeed.

What makes a conversion foundation successful is well understood through years


of experience and study. In addressing SDOH issues, the conversion foundation's
leaders must be adaptive in nature to successfully identify what is possible, and to
create or work with grass roots nonprofits to achieve those goals. (Easterling article
attached). It is hard work and reqiiires a "culture of learning" as Frances Sheehan, a
17 year veteran CEO of two large conversion foundations in Pennsylvania, will tell
you, adding that "the kiss of death is the know it all board member" noting that
physicians can be particularly prone to such attitudes. The root problems leading
to poor health outcomes are complex, entrenched and can suck up massive
amounts of cash without changing behavior one jot. One has only to look at the
Eastern Band of Cherokee Indians and the acute health challenges they face despite
access to tribal funds from casino earnings. "Money is necessary but not sufficient,
and there is never enough money" (Karl Stauber). To make headway in this area
requires a completely different skill set. The successful Board must be diverse in
terms of gender, color and include those from privilege as well as those suspicious
of privilege (Karl Stauber), and have meaningful connections to the populations of
the target communities. We know that to to effectively identify and tackle such
challenges, there must be enough depth of diversity to empower the "minorities".
The nucleus of this Board lacks diversity and it is highly unlikely that it will select
additional members who will challenge its dominance. Fact: of the 6 Asheville

3 IP a g e
based Trustees named to Dogwood Trust, 5 live in the same zip code in Asheville
in or adjoining ultra wealthy Biltmore Forest (as does Dr. Paulus), and Janice
Brumit, Board Chair, lives in an adjoining zip in a 12,046 square foot home.
Unfortunately this makes the Dogwood Health Trust Board looks like an old boy
Millionaires Club.

Third is the grantmaking role of the Foundation which puts it squarely in a


position to benefit the executives who continue to run HCA owned Mission.
Mission management gave many talks to community groups about the sale and
they were particularly enthusiastic about the benefit to the community of the new
foundation. More specifically, in early May of 2018 Paulus gave a talk to about 20
directors of local nonprofits in Buncombe County and promised that their
organizations would be big winners if the sale to HCA went through. It seems that
Dr. Paulus and his team had already chosen the focus of the foundation and had
determined that it would be giving money to these organizations. Although this
may strike someone who is not part of the Mission team as preempting the
authority of the Board of the new Foundation, Dr. Paulus apparently was confident
that he could speak for the Foundation. As we later learned, by that time the
Mission Board had tapped his longtime friend Janice Brumit to chair the
Foundation (Brumit personally incorporated the foundation on May 16, 2018). The
relationship between Brumit and Paulus clearly runs deep. See Mission Health
newsroom clipping (attached) where Dr. Paulus states "[Brumit's] support,
friendship and mentorship has [sic] been absolutely essential to me as CEO. I came
here largely because of her".

Social Determinants of Health are the upstream factors that play the major role
(70% or more) in determining health care outcomes of the residents of a
community. SDOHs include such as factors as employment, education,
transportation, nutrition, community and personal safety -all unrelated to the
availability or quality of healthcare services. However, we know that Mission
states that direct health care services may be provided by the Foundation. See their
website Q&A. There is nothing in the Foundation's organizational documents that
restricts them from offering direct services. Moreover, many local nonprofit
organizations that provide direct health care also offer SDOH assistance, and it
would be easy to steer Foundation money toward providing health care services
offloaded from HCA, even if the dollars were said to be for SDOH. For example,
the Appalachian Mountain Community Health Centers (AMCHC) Board of
Directors has been told by Mission executives that their primary care clinics can

41 Pa oe •
receive money from the Foundation. AMCHC is one of many Federal Qualified
Health Clinics- FQHC- in WNC, funded by federal dollars and eligible for much
higher reimbursement rates for Medicaid patients than other providers. The Sales
contract makes it explicit that the Foundation will provide direct health care
services through a for-profit entit};. See "Physician or Dental Clinic" definition p.
22 and (b) p. 97. It appears that this is setting up the support by Foundation of the
FQHC mentioned above. What has not been made public is that HCA reportedly
has refused to buy the 24 Primary Care physician practices owned by Mission (as
of late August), but will buy the lucrative specialty practices. This means that the
primary care offered by 24 Mission owned physician practices which serve a
"critical need in WNC" according to Dr. Paulus (a fact beyond dispute), will now
be thrown into limbo, and reportedly subject to a questionable scheme to lease the
practices/doctors' services to its "friendly" FQHC, Appalachian Mountain Health
Clinic, using the Foundation's money. (This information is based on a
conversation from late July*). This is a complicated and highly sensitive issue
involving federal law and one on which Mission has been working for many
months. Only the AG is in a position to get to the bottom of this issue.

It is important to note that Mission was instrumental in creating AMCHC,


apparently in order to push much of the care it was providing to uninsured and
Medicaid recipients to the AMCHC clinics. (News articles attached). AMHC did
not meet the criteria for FQHC eligibility and it created a firestorm of controversy
among the legitimate FQHCs who treat almost 50% uninsured patients, as
compared to AMHC which has only a 18% uninsured patient base.** Mission
gamed the system to improve its financial results and there is no reason to think
this behavior will not continue or intensify under HCA ownership, to the
community and the Foundation's ultimate detriment.

Fourth, and most critical is the Foundation's role in enforcing the agreement
between Mission and HCA. Here it is imperative that the Trust be truly
independent of both HCA and Mission - not independent in name only.

The recent announcement of the sales agreement affirmed that Mission executives
will continue to run the system under the Mission brand as a division of HCA. It is
alarming that the role of enforcer is contractually restricted to a Foundation which
is so closely aligned with the entity it is supposed to monitor, making any contract
guarantees by HCA illusory. The prospect of HCA violating the asset purchase
agreement must be given serious consideration given their past performance. If the

5 IP a g e
Board is to effectively enforce the Agreement they must have the interest of the
communities as their only priority, unsullied by any allegiance to Mission/HCA.
And the Board must have the appropriate tools to discourage nonperformance and
to enforce the contract provisions against HCA or its successors in interest. Once
the initial sale of Mission to a for profit is consummated, there are no further
barriers to subsequent ownership of this hospital system by hedge funds or any
other entity. The community is left exposed and vulnerable if HCA decides its
foray into NC was a mistake.

We know from other conversion foundations' experience that former hospital


board members on the conversion board are psychologically invested in justifying
their decision (particularly to sell to this particular entity) which impairs their
ability to monitor the performance of the new entity, still being managed by their
friends and former associates. They tend to rationalize the bad acts of the converted
hospital, rather than zealously defend the interests of community. (Sheehan,
Delaware Community Foundation, Brandywine Foundation).

Moreover, it strains credulity to think that when the executives of HCA/Mission


need a favor, the Board of the Foundation will turn a deaf ear. The likelihood of
this being brought to the public's attention is almost nil if the Board is controlled
by Mission. Even one or two persuasive Board members can create the benefit that
Mission/HCA seeks without detection of the intended benefit to HCA. The
enforcement agencies (AG and IRS) have no entryway to become involved unless
actions become public through whistle blowers. By the time the problems become
public the damage is done.

These problems can be avoided by eliminating the risk factor of a Mission


influenced or controlled Board. The Board must be composed of the best
candidates for the job (for example, by using the Raleigh consultants used by
Danville Regional Foundation and community advisory committees) and its
governance must incorporate the best practices in the industry in terms of
succession and staffing. Most importantly it must be truly independent and free of
any connection with Mission. The ties that bind Mission and Dogwood mean that
there will never be any assurance that there are not ulterior motives behind any
Dogwood activity.

6 IP a y e
*Reliable Source. Given the outsized influence Mission wields in these
communities based on the amount of funding it controls, it is understandable that
almost no organization with expectations of continued or new support wants to go
on record as not being in favor of Mission's position on both the sale and the
Foundation. Mission management has assiduously worked to link the HCA
purchase to the benefits that such community organizations will receive, most
notably the $15 million carrot to the local hospital foundations. Mission has also
pressured many into writing letters of support for the transaction and foundation.
Moreover, the publicized SDOH focus ensures that nearly every social, legal,
environmental and justice oriented charity as well as all of the community
foundations in these areas are conceivable beneficiaries, it has effectively stopped
any meaningful public discussion of the issues among those who hope to be a
recipient.

**See CarolinaPublicPress.org ; new-wnc-health-center-group-raises-questions

Contact Information for Sources Mentioned:

Theresa Coletta, Bumsville mavor@townofburnsville.org (828) 682-2420

Bob Scott, Franklin scoopscott@aol.com (828) 524-2516

Patrick Taylor, Highlands mavor@highlandsnc.org (828) 526-9431

Dr. Doug Easterling dveaster@wakehealth.edu (336)716-7554

Frances Sheehan, President, Delaware County Foundation, former CEO of


Brandywine Foundation, Pennsylvania
fsheehan@.de]cofoundation.org (610)744-1011

Karl Stauber, President, Danville Regional Foundation, Danville VA


kstauber@drfonline.org (434)799-2176

Mission Facebook Live


httDs://www.facebook.com/MissionHealthNC/videos/213270625674391
5/

7 I P a Si e
Attachment 2

SEARCH Position Paper on Conflicts of Interest within the


Proposed Dogwood Health Trust Board
mi
Sustaining Essential And
Rural Community Healthcare

SEARCH Position Paper on Conflicts of Interest


within the Proposed Dogwood Health Trust Board

This document, which supplements SEARCH'S earlier issue brief on the Mission-HCA sale,
explores in greater detail why it is deeply problematic - and arguably a conflict of interest as
defined in the law of corporations - for persons currently or formerly afflUated with Mission
Health to sit on the Dogwood Health Trust board.

Most discussion of the trust has focused on its grantmaking role. But equally important is its role
in enforcing the agreement between Mission and HCA. It is imperative in both contexts that the
trust be truly independent of both HCA and Mission - not independent in name only.

These concerns would exist even if Mission's leaders and the Mission name were no longer to be
a part of the system. But that is not the case. The recent announcement of the final sales
agreement affirmed, as indicated earlier, that Mission executives will continue to run the system
under the Mission brand as a division of HCA.

In fact. Mission has consistently downplayed the fact that it is being sold, using words like
"partner" and "affihate" to describe what is, in fact, an outright sale. The message seems to be:
"Don't worry, we'll still be here, and you won't notice any change." Mission's press release of •
Aug. 31 formulates it thus: "Mission Health will continue to be managed locally ... "

How much autonomy Mission's executives will have in operating their division is wholly
unclear. It is presumably spelled out between the parties and is (or will be) known to the
Attorney General. But it has not been shared with the public. Logic suggests, though, that
Mission's leaders would not be eager to stay if they were deprived of substantial decision-
making authority going forward.

Consumers Union and Community Catalyst are at the forefront of analyzing the pitfalls inherent
in nonprofit hospital conversions. According to their research, nothing is more critical to the
effectiveness of the successor foundation than the makeup of its initial board:

To deliver the maximum benefit to its community, the new health foundation must act
impartially, and it must be viewed from the outset as making decisions fairly and without
bias. It is essential that the foundation not carry obligations to provide or fund services
that should be delivered by the successor corporation. It must not favor (or disfavor)
providers or other community partners on the basis of their alignment with, or
competition with, the converting nonprofit or its successor.

It is for these reasons - together with the need to assemble the right mix of skills and
background - that the board of the converting nonprofit should not be carried forward to
become the board of the new foundation. Once the planning process has identified criteria
and priorities for board recruitment, some members of the board of the converting
nonprofit may be considered, together with other candidates, for board seats. However,
they should not receive priority consideration, and no seat on the goveming board,
contract or staff role with the foundation should be committed in advance to an executive
or board member of the nonprofit that is the source of the endowment.

Consider the chasm between that ideal and the actions of Mission Heahh. Even as the sale was
being hammered out, Mission quietly (one might say surreptitiously) went about creating a
successor foundation dominated by Mission board members. Only one of the nine announced
members has not served on the board of the system or a component institution. Three are current
Mission board members, three are past board presidents and two have served on the boards of
individual Mission hospitals.

Most were appointed in May, three months before the sale agreement was finalized and long
before Mission announced formation of the trust or put out a call for nominations from the
public. Although current system chair John Ball acknowledged in early August that six members
had been named and three were pending, he suggested that only three - not eight - had ties to
Mission. (And he concealed the fact that he himself is among the appointees).

Shortly before that, Ms. Brumit had intimated to a reporter that board members other than herself
would be chosen only after criteria were finalized. That pattern of misdirection, if not duplicity,
perfectly exemplifies the fashion in which Mission has created the successor foundation. It
would be hard to design a process calculated to inspire less trust.

Meanwhile, even as Mission was creating Dogwood in secret, CEO Ron Paulus was trying to
buy support for the HCA sale by quietly promising various local nonprofits that they would
receive money from the trust. In the same vein, the Mission board announced that, if the sale
goes through, the individual foundations attached to Mission's hospitals will receive grants of as
much as $ 15 million each.

What clearer signal can Mission - soon to be a part of HCA — send? Mission considers the trust
its to run and the trust's money its to give away. And Mission's leaders have no scruples about
committing that money to endeavors that may or may not support the trust's long-term strategic
aims but transparently support Mission's short-term corporate aims.

A graphic included - perhaps inadvertently - on the missionhealthforward.org website plainly ,


says as much: The successor foundation will be "established and goverwecf' by the Mission board
(emphasis added). (See Appendix A.) •

Mission has even branded the trust as an offshoot of Mission. The DHT logo, as it appears on the
trust's website, is identical to Mission's^ right down to the font. (See Appendix B.) That may
appear trivial, but there is no more potent expression of a corporation's identity than its logo.

The conclusion is inescapable: If the trust is a creature of Mission, and Mission is a


creature of HCA, the trust will not be independent of HCA. The implications for grant
making are alarming, but not nearly as alarming as the implications for oversight.

In fact, what Mission is pursuing with almost indecent haste is a situation in which a trust
strongly dominated by Mission board members is responsible for enforcing compliance by
a team of executives with whom they have made common cause for years (and in many
cases, decades). In plain English, that doesn't pass the smell test.

Recent case law is instructive on this point. In 2016 the Supreme Court of Delaware found in
Sandys v. Pincus that, using a reasona.ble doubt standard, "an extremely close, personal bond"
between a corporate director and a corporate executive "created an inference that [the director]
cannot act independently of [the executive]."

The court's majority specifically found that the inference of a conflict "does not require a
plaintiff to plead a detailed calendar of social interaction to prove that directors have a very
substantial personal relationship rendering them unable to act independently of each other." In
that case, the "bond" was inferred from joint ownership of a private airplane - a far less
psychologically and emotionally fraught relationship than ones forged in steering a nonprofit
healthcare system through perilous times.

In effect. Mission's executives and directors have served in the trenches of a bloody war of
attrition, fighting the good fight together against all the vagaries of a collapsing health care
marketplace. It would take aknost superhuman detachment for the Mission-Dogwood contingent
to cry foul on their Mission-HCA comrades.

It is worth noting, too, that for the Mission-Dogwood board members to charge Mission-HCA
with noncompliance would also be to concede that they themselves had exercised poor
judgement in approving the sale.

Consider the contrast with the Health Care Foundation of Greater Kansas City, created by
Missouri Attorney General Jay Nixon when HCA bought Health Midwest in 2003. Nixon
himself, acting on no more explicit authority than that conferred in North Carolina law,
appointed the foundation's first board. It encompassed people from the medical, social service,
business, union, government, financial and religious realms. Most importantly, it included no one
. associated with Health Midwest - a guarantee that it would be truly independent.

If the current appointments are allowed to stand, an aura of insider dealing will linger over the
foundation, breeding public distrust toward an endeavor for which public trust is essential. It is a
truism of conflict-of-interest theory that the appearance of conflict can be as deadly as the reality.
This venture is too vital to the future health of Western North Carolina to be tainted from the
start by both real and perceived conflicts. .

The Attorney General's mandate to ensure that the sale of Mission Health is in the public interest
demands nothing less than rejection of the board proposed by Mission. To repeat: eight of the
nine proposed members are individuals who should be barred. There exists a reasonable
inference that they cannot act independently to enforce the terms of the sales agreement.

To fulfill his duty to ensure the board's independence, the AG need not invent a wheel.
Precedents established by other attomeys general (in some instances, without the benefit of
explicit statutory authority) point to mechanisms for creating a board that is qualified.
independent and truly representative of the public whose interests the AG is sworn to protect.
(See Appendix C.)

Appendix A

H o w is t h e N e w F o u n d a t i o n C r e a t e d ?

Mission System • EstiJt^lisnod by and cjovornfvcJ


l:,y fw' i3s'Of> Hpalrh Bonrti
• NOT controlled or influenccc
by HCA

Excerptedfrom missionhealthforward.org

Appendix B

tib GM Quick Cure :,j FuidaOwrtot X P?tifUiPoiUl

I: • MISSION .HF:AI.TH S€<*VK« I. TSiATME DOGWOOD


HEALTH TRUST

r Mission
. 4
WalGomtoft
Trust, 0 » "
MisskxlH
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Atttjv^mS.we
Sk nned Dotanllal maraiierefe
Mission homepage (screen shot taken 8/15/18) DTH homepage (screen shot taken 8/15/18)
Appendix C

Here, for purposes of comparison, are the applicable sections of laws goveming the disposition
of nonprofit assets in North Carolina and other selected states as well as notes on how attomeys
general of those states interpreted the law.

North Carolina

What the law says: § 55A-12-02. Sale of assets other than in regular course of activities,
(g) A charitable or religious corporation shall give written notice to the Attorney General
days before it sells, leases, exchanges, or otherwise disposes of all, or a majority of, its
property if the transaction is not in the usual and regular course of its activities unless the
Attomey General has given the corporation a written waiver of this subsection. This
notice shall include all the information the Attomey General detemiines is required for a
complete review of the proposed transaction. The Attomey General may require an
additional 30-day period to review the proposed transaction by providing written notice
to the charitable or religious corporation prior to the expiration of the initial notice
period. During this 30-day period, the transaction may not be finalized.

§ 55A-13-02. Authorized distributions.


(1) A corporation may make distributions to any entity that is exempt under section
501(c)(3) of the Internal Revenue Code of 1986 or any successor section, or that is
organized exclusively for one or more of the purposes specified in section 501(c)(3) of
the Internal Revenue Code of 1986 or any successor section and that upon dissolution
shall distribute its assets to a charitable or religious corporation, the United States, a state
or an entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986
or any successor section.

Missouri

What the law says: 355.676. Dissolution of public benefit corporation. 1. A public
benefit corporation shall give the attomey general written notice that it intends to dissolve
at or before the time it delivers s l i d e s of dissolution to the secretary of state. The notice
shall include a copy or summary of the plan of dissolution. 2. No assets shall be
transferred or conveyed by a public benefit corporation as part of the dissolution process
until twenty days after it has given the written notice required by subsection 1 of this
section to the attomey general or until the attomey general has consented in writing to or
indicated in writing that he will take no action in respect to, the transfer or conveyance,
whichever is earlier.

355.691. Effect of dissolution. (6) If the corporation is a public benefit corporation, and
no provision has been made in its articles or bylaws for distribution of assets on
dissolution, transferring, subject to any contractual or legal requirement, its assets
exclusively for one or more purposes described in section 501(c)(3) of the Internal
Revenue Code; or if the dissolved corporation is not described in section 501(c)(3) of the
Internal Revenue Code, to one or more public benefit corporations, including a foreign
corporation that would qualify under this chapter as a public benefit corporation;

The AG's interpretation: In 2003, when Health Midwest was bought by HCA, Attorney
General Jay Nixon oversaw creation of the Health Care Foundation of Greater Kansas
City and personally appointed the initial board. No one associated with Health Midwest
was named to the board.

Kentucky

What the law says: 273.323 Notification to Attorney General. The Secretary of State, on
or before the last day of December of each year, may certify to the Attorney General the
names of all corporations which have given cause for dissolution as provided in KRS
273.161 to 273.390, together with the facts pertinent thereto. Whenever the Secretary of
State shall certify the name of a corporation to the Attorney General as having given any
cause for dissolution, the Secretary of State shall concurrently mail to the corporation at
its registered office a notice that such certification has been made. Upon the receipt of
such certification, the Attorney General may file an action in the name of the state against
such corporation for its dissolution.

The AG's interpretation: To create a successor foundation to Kentucky Blue Cross


Blue Shield, the Attorney General formed a Planning Committee of consumers, health
care advocates, health care professionals, and academics. The committee drafted a
mission statement, articles of incorporation, and by-laws. In addition, the Committee
recommended a process for choosing members of the first board of the foundation that
was deliberate, open, and accessible to health care consumers and the broader public.

Massachusetts

What the law says: Ch. 180, 8A (d) (1) A nonprofit acute-care hospital, as defined in
section 25B of chapter 111, or a nonprofit health maintenance organization as defined in
chapter 176G shall give written notice of not less than 90 days to the attorney general and
to the commissioner of public health if such notice concerns a nonprofit health
maintenance organization, before it enters into a sale, lease, exchange, or other
disposition of a substantial amount of its assets or operations with a person or entity other
than a public charity. No such notice shall be required if a written waiver of such notice is
executed by the attorney general. ...

(4) If a charitable fund results from the transaction, and if the nonprofit entity making the
disposition does not continue its operation of a nonprofit hospital or nonprofit health
maintenance organization, the governance of the charitable fund shall be subject to
review by the attorney general and approval by the court. The governance of the
charitable fund shall be broadly based in the community historically served by the
predecessor nonprofit acute care hospital or health maintenance organization and shall be
independent of the new for-profit entity. The attorney general shall conduct a public
hearing in connection with his review of the plan for the governance of the resulting
charitable fund. An appropriate portion of any resulting proceeds shall, if determined to
be necessary by the attomey general, be used for assistance in the development of a
community-based plan for the use of the resulting charitable fund.

The AG's interpretation: The govemance of the fund must be broadly based in the
community. This means that the board members of the Institution [the nonprofit hospital]
may not be the board members of the successor charitable fund. '

(Excerpted from the Attomey General's Guidelines for Transfers of Nonprofit Acute
Care Hospitals and HMOs. The definition of "Institution" occurs in this passage:
"Transactions involving nonprofit acute-care hospitals and nonprofit HMO's (each, an
'Institution,' and collectively, 'Institutions') are subject to specific procedural
requirements ...")
Attachment 3

An Open Letter to Dogwood Health Trust a n d Dr. Ron Paulus


An Open Letter to Dogwood Health Trust and Dr. Ron Paulus:

The formation of the Dogwood Health Trust (DHT) presents a once-in-many-generations


opportunity for WNC.

We, the undersigned organizations, support DHT's boldly stated intent "to reflect the population,
gender and ethnic distribution of the service area" — and we appeal to DHT fulfill that objective
by forming a board that authentically embodies WNC.

At this key time in the development of the DHT board of directors, we note that although DHT's
service area is 52 percent female, its named Trustees are only 22 percent female. While
Buncombe County has a 10 percent non-white population, none of the named Buncombe
County Trustees are non-white. With one exception, the East and West regions to be served by
DHT also are not yet reflective of demographics found in those counties.

it takes many perspectives to find the solutions to imbedded societal challenges. While many
may see points of division in the region, we believe that DHT has a unique opportunity to
transcend separations of geography, population density, race, ethnicity, and gender. As one of
the largest per-capita foundations in the country, DHT can set the stage for truly transformative
work by creating a diverse board that brings together - and shares decision-making power
among - representation from all of the voices of our region.

This is bold work, and we urge DHT to be courageous and transparent as it continues its
selection process. Because we share DHT's resolve, we offer the collective wisdom and
experiences of our organizations as a resource to assist in understanding how to best build a
board that both represents and truly grasps the challenges and opportunities that exist in all
corners of our region.

By creating a foundation board that reflects the populations DHT was created to serve, DHT will
be better able to achieve its mission to dramatically improve the health and wellbeing of all
people and communities in Western North Carolina.

Sincerely,
Carmen Ramos-Kennedy, President
Asheville Buncombe County NAACP
With:
American Association of University Women- Asheville Branch
ACLU Western North Carolina Chapter
Asheville Buncombe institute of Parity Achievement
Children First/Communities in Schools .
Carolina Jews for Justice/West
Christians for a United Community
Coming to the Table
Elders Fierce for Justice
YWCA of Asheville and WNC
S T A T E OF N O R T H CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE T O L L - F R E E IN N C : 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF N C : 9 1 9 . 7 1 6 . 6 0 0 0

RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0

WWW.NCDOJ.GOV

November 27, 2018

Mr. Charles Shelton


Chief Executive Officer
Bakersville Community Health Center
86 N Mitchell Avenue
Bakersville, NC 28705

Dear Mr. Shelton:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this infomiation was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Yost, Julie

From: notification@prs01hcrmps01.ic.local
Sent: W e d n e s d a y , N o v e m b e r 14, 2018 8:45 AM
To: Consumer
Subject: HCA/Mission Merger
Attachments: HealthCenters_LetterReMissionAcquisition.pdf

Notes
Received on 11-1-18.1 may have sent this already yesterday. Thanks!!! Karen

Contact
No Name
bhall@feldesmantucker.com

Message
Good afternoon,

I hope you are well.

Thank you for returning my call yesterday. I am re-forwarding the email.

I'm sorry for the follow-up and bothering you with your busy schedule. When Carrie originally sent the email,
she received a notification that it may have not been delivered, so we wanted to confirm that you received it.

Can you please confirm receipt of this email?

I am looking forward to hearing from you!

Thank you,

Brittney Hall
Legal Assistant
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE; This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify bhall@feldesmantucker.com immediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.

From: Riley, Carrie Bill


Sent: Friday, October 26, 2018 4:10 PM
To: 'jharrod@nc.doj.gov' <jharrod@nc.doj.gov>; 'ncago@nc.doj.gov' <ncago@nc.doj.gov>
Subject: Letter from Western NC Health Centers Re HCA/Mission Merger

Good afternoon.

My name is Carrie Riley and I am an attorney submitting the attached on behalf of the organizations named in
the letter.

As requested in the attached, we propose coordinating a call to discuss the matter further. Your time and review
is much appreciated.

Sincerely,
Carrie

Carrie Bill Riley


Partner
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL],

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited frorri any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify criley@Feldesmantucker.com inmiediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.
O c t o b e r 26, 2018

Josh Stein, Attorney General


Attorney General's Office
9 0 0 1 Mail Service Center
Raleigh, NC 2 7 6 9 9 - 9 0 0 1

Dear IVIr. Stein:

W e are writing t o you on behalf of Blue Ridge Community Health Services, High Country
Community Health, W es tern North Carolina Community Health Services, and Bakersville Community
Health Center, each of which is located in w e s t e r n North Carolina and is a federally qualified health
c e n t e r (FQHC). Our organizations have a long history of providing care for t h e most vulnerable
populations in our region, with a particular focus on serving low-income, uninsured, agricultural
workers, and homeless persons.

On average, our organizations have b e e n operating as FQHCs f o r o v e r 25 years, and each of our
organizations has b e e n designated as a patient c e n t e r e d medical h o m e by t h e Joint Commission or t h e
National C o m m i t t e e for Quality Assurance (NCQA). In addition t o being recognized f o r our provision of
high quality primary care, our organizations have a history of working collaboratively with o t h e r h u m a n
service organizations t o improve t h e health and well-being of t h o s e living and working in t h e
c o m m u n i t i e s w e serve.

As FQHCs receiving grants or look-alike designation f r o m t h e Health Resources and Services


Administration (HRSA) within t h e D e p a r t m e n t of Health and Human Services (DHHS), w e are statutorily
obligated t o furnish a broad range of primary and preventive health services, including o u t r e a c h , and t o
assure t h a t no patient will be denied health care services d u e t o an individual's inability t o pay f o r such
services. W e also o f f e r a broad range of behavioral health services, including s u b s t a n c e abuse and
t r e a t m e n t services. Together, w e provide care for over 60,000 low-income adults and children (<200%
Federal Poverty Level), with over 20,000 living in poverty (<100% Federal Poverty Level). Over 30,000
uninsured individuals rely on o u r health centers for their care. W e are c o m m i t t e d t o continuing to serve
as t h e primary safety net providers f o r w e s t e r n North Carolina and t a k e pride in o u r ability t o work
cooperatively in t h e best interests of t h e patients w e serve.

It is in t h a t spirit t h a t w e write this letter t o express our significant concerns a b o u t for-profit


HCA Healthcare's potential acquisition of Mission Health. Specifically, w e are c o n c e r n e d t h a t t h e
p r o c e e d s resulting f r o m t h a t sale will not be allocated equitably, supporting t h e established safety net
providers in t h e region and benefitting t h e residents of w e s t e r n North Carolina. Rather, as described
below, w e anticipate t h a t t h e p r o c e e d s will be allocated in a m a n n e r t h a t f u r t h e r s t h e interests of HCA,
Mission, and Mission's partners. In addition, w e believe t h a t Mission and HCA intend t o t r a n s f e r most, if
not all, of t h e t w e n t y Mission Medical Associates (MMA) o u t p a t i e n t primary care clinics t o an existing
FQHC t h a t maintains close ties with Mission, as described below. This t r a n s f e r would significantly
increase Medicaid costs in w e s t e r n North Carolina, w i t h o u t achieving any meaningful expansion of
service to medically u n d e r s e r v e d populations or quality i m p r o v e m e n t .
1
While t h e c r e a t i o n of a $1.5 billion F o u n d a t i o n could p r e s e n t a r a r e o p p o r t u n i t y t o e n h a n c e t h e
health and well-being f o r t h e r e s i d e n t s of w e s t e r n North Carolina, it will not d o so if it is i m p l e m e n t e d in
a m a n n e r t h a t is d e c e p t i v e a n d only f u r t h e r s Mission and HCA's i n t e r e s t s . In this l e t t e r w e explain o u r
public i n t e r e s t c o n c e r n s .

Mission is Integrally Tied w i t h a Single FQHC in t h e W e s t e r n N o r t h Carolina Region

In 2 0 1 4 Mission, in collaboration M o u n t a i n Area Health Education C e n t e r (MAHEC), e s t a b l i s h e d


a n e w c o r p o r a t i o n , M o u n t a i n Area Health C e n t e r nka Appalachian M o u n t a i n C o m m u n i t y Health C e n t e r
(AMCHC), t o a s s u m e o p e r a t i o n a l authority o v e r certain MAHEC a n d Mission o u t p a t i e n t primary c a r e
clinical practices. In 2015, AMCHC applied f o r and w a s a w a r d e d a HRSA g r a n t t o o p e r a t e as a FQHC.
The t r a n s f e r r e d Mission a n d MAHEC o u t p a t i e n t primary c a r e clinical practices w e r e included as "sites" .
within t h e h e a l t h c e n t e r p r o j e c t . Soon a f t e r AMCHC o b t a i n e d t h e g r a n t a w a r d , w e o b t a i n e d a c o p y of
t h e AMCHC g r a n t application and f o u n d t h a t it seriously m i s r e p r e s e n t e d n e e d s a s s e s s m e n t d a t a ,
inaccurately d e s c r i b e d existing primary c a r e practices in t h e c o m m u n i t y , falsely s u g g e s t e d t h a t it
m a i n t a i n e d c o l l a b o r a t i o n a r r a n g e m e n t s with existing FQHCs, and did n o t properly disclose AMCHC's
relationship with Mission.

FQHC s t a t u s p r o v i d e d AMCHC (and its t r a n s f e r r e d Mission practices) with various b e n e f i t s , m o s t


notably special r e i m b u r s e m e n t f r o m M e d i c a r e and Medicaid b a s e d on its actual costs of providing
c o v e r e d services. The FQHC c o s t - b a s e d r e i m b u r s e m e n t r a t e s w e r e and a r e considerably higher t h a n t h e
f e e - f o r - s e r v i c e p a y m e n t s c h e d u l e s available t o Mission. Accordingly, t h e t r a n s f e r of t h e primary c a r e
clinical practices r e s u l t e d in significant cost savings f o r Mission. Although Mission did n o t directly
o p e r a t e t h e t r a n s f e r r e d clinics, it r e t a i n e d indirect i n v o l v e m e n t a n d i n f l u e n c e by a s s u m i n g AMCHC
Board s e a t s a n d leasing p r o v i d e r capacity t o AMCHC.

W e strongly s u s p e c t t h a t t h e FQHC g r a n t application w a s n o t h i n g m o r e t h a n an a t t e m p t t o


c o n v e r t t h e Mission a n d MAHEC practices t o a FQHC s t r u c t u r e f o r t h e sole business p u r p o s e of
improving t h e i r r e s p e c t i v e b o t t o m - l i n e s , w i t h o u t any m e a n i n g f u l i n c r e a s e in access t o a f f o r d a b l e c a r e . 1
While w e c a n n o t c o n f i r m t h a t this w a s t h e i n t e n t , w e can only q u e s t i o n w h a t would h a v e m o t i v a t e d
MAHEC and Mission t o p u r s u e establishing a n e w FQHC, r a t h e r t h a n collaborating with t h e existing high
quality s a f e t y - n e t FQHCs t h a t had d e m o n s t r a t e d and d o c u m e n t e d t h e i r desire t o w o r k t o g e t h e r t o
e x p a n d c a r e in t h e region. It is o u r u n d e r s t a n d i n g t h a t since its initial FQHC d e s i g n a t i o n , AMCHC h a s
b e e n closely scrutinized by HRSA and has had n u m e r o u s findings of n o n - c o m p l i a n c e . In r e s p o n s e t o
such findings, HRSA has i m p o s e d several conditions on AMCHC's g r a n t , a n d has accordingly issued
several s h o r t e n e d p r o j e c t periods. It is i m p o r t a n t t o n o t e t h a t , since its FQHC d e s i g n a t i o n , AMCHC has
not m e a n i n g f u l l y e x p a n d e d a c c e s s t o health c a r e services t o t h e medically u n d e r s e r v e d c o m m u n i t i e s in
w e s t e r n North Carolina, c o n s i s t e n t with t h e p u r p o s e s of t h e health c e n t e r project g r a n t . In 2017, only
18% of AMCHC p a t i e n t s w e r e u n i n s u r e d , a n d this w a s a decrease f r o m 2016.

It is i m p o r t a n t t o c o n s i d e r t h e historic relationship b e t w e e n Mission a n d AMCHC w h e n assessing


t h e HCA acquisition a n d , in particular, t h e role and i n d e p e n d e n c e of t h e D o g w o o d Health Trust.

1
The Mission Chief Executive Officer, as part of his 2012 Year in Review, s t a t e d publicly t h a t o n e of t h e health
system goals was t o "give" FQHC status to MAHEC in o r d e r t o improve t h e financial positions of both organizations
"by millions" (by taking a d v a n t a g e of t h e FQHC r e i m b u r s e m e n t models).
2
T h e F o u n d a t i o n is Not I n d e p e n d e n t

Mission a n d HCA have indicated t h a t t h e p u r p o s e of t h e newly c r e a t e d D o g w o o d Health Trust


will b e t o "dramatically improve the health and well-being o f all people and communities o f Western
North Carolina." Mission and HCA h a v e f u r t h e r s u g g e s t e d t h a t t h e selection of t h e initial directors will
b e c o n d u c t e d t h r o u g h a t r a n s p a r e n t p r o c e s s , p o s t e d on t h e D o g w o o d Health Trust w e b s i t e , with
r e p r e s e n t a t i o n f r o m across t h e region a n d s a f e t y n e t s y s t e m . However, t h e y h a v e failed t o n o t e t h a t
t h e D o g w o o d Health Trust will be d o m i n a t e d by Mission b o a r d m e m b e r s . Only o n e of t h e nine
a n n o u n c e d m e m b e r s has not s e r v e d on t h e b o a r d of t h e Mission s y s t e m or an affiliate institution. T h r e e
of t h e m e m b e r s a r e c u r r e n t Mission b o a r d m e m b e r s , t h r e e are past board p r e s i d e n t s , a n d t w o h a v e
s e r v e d on t h e b o a r d s of individual Mission hospitals. Although t h e r e is technically a m e a n s t o n o m i n a t e
individuals via t h e Trust's w e b s i t e , w e h a v e r e a s o n t o believe t h a t such m e a n s a r e illusory. For e x a m p l e ,
it is o u r u n d e r s t a n d i n g t h a t m o s t of t h e b o a r d m e m b e r s w e r e a p p o i n t e d t o t h e D o g w o o d Health Trust in
May, long b e f o r e Mission a n n o u n c e d t h e f o r m a t i o n of t h e Dogwood Health Trust o r p u t o u t a call f o r
n o m i n a t i o n s f r o m t h e public. In a d d i t i o n , w e a r e a w a r e of s e n i o r executives f r o m w e s t e r n North
Carolina n o n - p r o f i t organizations w h o w e r e n o m i n a t e d t o s e r v e on t h e D o g w o o d Health Trust, n o n e of
w h o m have been contacted.

The lack of i n d e p e n d e n c e of t h e D o g w o o d Health Trust is deeply c o n c e r n i n g given t h e


F o u n d a t i o n will receive $1.5 billion in p r o c e e d s , with an a n t i c i p a t e d $ 7 5 million in a n n u a l s p e n d i n g t o
a d d r e s s t h e social issues affecting t h e health a n d well-being of r e s i d e n t s t h r o u g h o u t Mission's w e s t e r n
North Carolina service a r e a .

W e had an o p p o r t u n i t y t o review t h e e n c l o s e d d o c u m e n t s , entitled "Problems with Mission-


Dogwood Structure and Governance," "SEARCH Position Paper on Conflicts o f Interest within the
Proposed Dogwood Health Trust Board," a n d "An Open Letter to Dogwood Health Trust and Dr. Ron
Paulus," which w e r e recently s e n t t o you. W e s h a r e t h e s a m e d e e p c o n c e r n t h a t t h e D o g w o o d Health
Trust is a c r e a t i o n of Mission and will not b e i n d e p e n d e n t of HCA.

T h e F o u n d a t i o n M a y I n e a u i t a b l v Favor S u p p o r t i n g AMCHC

W e a r e particularly c o n c e r n e d by t h e D o g w o o d Health Trust's lack of i n d e p e n d e n c e given t h a t


Mission has m a i n t a i n e d close ties with AMCHC. For e x a m p l e , Mission's Executive Director of
A m b u l a t o r y Finance currently s e r v e s on t h e AMCHC Board of Directors, Mission's Chief O p e r a t i n g
Officer currently s e r v e s as AMCHC's Director of Eastern O p e r a t i o n s , and several AMCHC providers a r e
c o n t r a c t e d f r o m Mission Medical Associates.

It a p p e a r s t h a t maintaining links with AMCHC is a key f e a t u r e t o t h e acquisition. Despite t h e


f a c t t h a t Mission and Dogwood Health Trust l e a d e r s routinely s t a t e t h a t t h e F o u n d a t i o n will f o c u s on
social d e t e r m i n a n t s of health, t h e Asset P u r c h a s e A g r e e m e n t specifically r e f e r e n c e s t h e F o u n d a t i o n ' s
and Mission's i n t e n t t o maintain a n d / o r establish relationships with FQHCs. For e x a m p l e . Section 7.3(b)
of t h e Asset P u r c h a s e A g r e e m e n t n o t e s t h a t t h e "Foundation shall be permitted to establish, organize,
and provide financial support or grants to any federally qualified health center or similar program." I n
a d d i t i o n , Section 7.3(f) explicitly r e f e r e n c e s c o n t i n u a t i o n of Mission's "current activities w i t h
Appalachian M o u n t a i n Community Health Center." The t e r m "current activities" is v a g u e and u n d e f i n e d .
Although Section 7.3(b) broadly r e f e r s t o FQHCs, n o n e of us h a v e b e e n c o n t a c t e d by Mission or
HCA r e g a r d i n g o p p o r t u n i t i e s t o c o l l a b o r a t e o r t o provide input. W e s u s p e c t t h a t such l a n g u a g e w a s
included t o p r e s e r v e Mission's longstanding s u p p o r t of AMCHC, r a t h e r t h a n t o reflect a c o m m i t m e n t t o
s u p p o r t i n g o u r netw/ork of s a f e t y n e t providers.

AMCHC Will LIkelv Expand W i t h o u t A M e a n i n g f u l I n c r e a s e In Access t o C a r e

As w e a r e c o n c e r n e d t h a t t h e Dogwood Health Trust is likely t o inequitably f a v o r s u p p o r t i n g


AMCHC o v e r t h e existing n e t w o r k of FQHCs, o u r g r e a t e r c o n c e r n p e r t a i n s t o t h e f u t u r e of t h e t w e n t y
MMA o u t p a t i e n t primary c a r e practices, which a r e located across t h e region, o f t e n directly within o u r
service a r e a s . Specifically, w e h a v e r e a s o n t o believe t h a t Mission a n d HCA i n t e n d t o transition
o p e r a t i o n a l a u t h o r i t y o v e r such o u t p a t i e n t primary c a r e practices t o AMCHC.

Although n e i t h e r Mission nor HCA h a v e a d d r e s s e d t h e m a t t e r publicly, t h e AMCHC Board Chair


has s t a t e d t o a local a t t o r n e y t h a t AMCHC is likely t o e x p a n d t o include t h e MMA o u t p a t i e n t primary
c a r e practices as a result of t h e acquisition. He has also a t t e n d e d o v e r 10 planning m e e t i n g s with
Mission's s e n i o r m a n a g e m e n t t e a m . To d a t e , n o n e of us h a v e b e e n c o n s u l t e d by Mission or HCA
r e g a r d i n g t h e acquisition, let a l o n e b e e n included in key planning m e e t i n g s . Additionally, as m e n t i o n e d
a b o v e , t h e MMA Chief O p e r a t i n g Officer w a s recently c o n t r a c t e d t o s e r v e as t h e AMCHC Director of
Eastern O p e r a t i o n s . W e s u s p e c t t h a t this position w a s e s t a b l i s h e d a n d s t a f f e d by an MMA
r e p r e s e n t a t i v e t o assist in t h e t r a n s i t i o n of t h e MMA o u t p a t i e n t primary c a r e practices t o AMCHC.

This s t r a t e g y w o u l d e x p a n d AMCHC's reach f a r across w e s t e r n North Carolina. 2 W e a r e


c o n c e r n e d t h a t t h e e x p a n s i o n is financially m o t i v a t e d r a t h e r t h a n r o o t e d in an i n t e r e s t t o e x p a n d
r e s o u r c e s t o additional u n i n s u r e d individuals. As n o t e d a b o v e , traditional o u t p a t i e n t primary c a r e
practices in North Carolina receive p a y m e n t p u r s u a n t t o a Medicaid f e e - f o r - s e r v i c e p a y m e n t s c h e d u l e ,
w h e r e a s FQHCs a r e entitled t o a special r e i m b u r s e m e n t b a s e d on t h e i r actual costs of providing services
in recognition of o u r d e e p c o m m i t m e n t (and legal obligation) t o e x t e n d services t o u n i n s u r e d and
u n d e r i n s u r e d r e s i d e n t s of o u r service a r e a s . Although t h e FQHC r a t e varies a m o n g health c e n t e r sites,
w e can a s s u m e t h a t such r e i m b u r s e m e n t virill b e considerably h i g h e r t h a n t h e traditional f e e - f o r - s e r v i c e
p a y m e n t r a t e t h a t MMA c u r r e n t l y receives. This w o u l d n o t b e so alarming if w e did not h a v e r e a s o n t o
believe t h a t t h e site t r a n s f e r s w o u l d be " t u r n k e y " transitions, w h e r e t h e o u t p a t i e n t primary c a r e
practices w o u l d simply shift t o AMCHC with no t r u e e x p a n s i o n in services a n d access t o c a r e for
medically u n d e r s e r v e d p o p u l a t i o n s .

In 2012, m a n y s t a t e Medicaid directors, t h r o u g h t h e National Association of Medicaid Directors,


e x p r e s s e d t h e i r significant c o n c e r n s t o CMS a n d HRSA regarding t h e s e t y p e s of t r a n s a c t i o n s , noting t h a t
while in s o m e c a s e s health c e n t e r a n d hospital affiliations m a y i n c r e a s e access t o care, in o t h e r cases
affiliations may only result in g r e a t e r r e i m b u r s e m e n t f o r c u r r e n t access. This is precisely t h e situation
w e a r e f a c e d with in w e s t e r n North Carolina. If t h e MMA o u t p a t i e n t primary c a r e practices t r a n s f e r t o
AMCHC, w e do n o t a n t i c i p a t e any service e x p a n s i o n , y e t Medicaid costs w o u l d significantly increase.
This w o u l d b e a s t e p b a c k w a r d s as t h e s t a t e w o r k s t o w a r d s achieving its quality-driven p a y m e n t r e f o r m
goals.

2
N o t e t h a t Section 7.3(b) of t h e Asset P u r c h a s e A g r e e m e n t indicates t h a t t h e Foundation may
"establish" or "organize" a n e w FQHC. W e s u s p e c t t h a t such l a n g u a g e w a s included t o provide Mission
with an a v e n u e t o transition all o r s o m e of t h e MMA o u t p a t i e n t p r i m a r y c a r e practices t o FQHC s t a t u s in
t h e e v e n t t h a t HRSA r e j e c t s t h e addition of such "sites" t o AMCHC's FQHC s c o p e of project.
4
Next S t e p s

This t r a n s a c t i o n will impact t h e r e s i d e n t s of o u r region f o r d e c a d e s t o c o m e . Addressing t h e


a f o r e m e n t i o n e d c o n c e r n s is of p a r a m o u n t i m p o r t a n c e t o p r o t e c t t h e public i n t e r e s t .

W e r e q u e s t t h a t you use your a u t h o r i t y as t h e AG t o e n s u r e t h a t t h e F o u n d a t i o n b o a r d is truly


i n d e p e n d e n t . W e f u r t h e r r e q u e s t t h a t you r e q u i r e HCA a n d Mission t o disclose w h e t h e r t h e y intend t o
t r a n s i t i o n t h e MMA o u t p a t i e n t primary c a r e practices and, if so, h o w t h e t r a n s f e r s will result in t h e
e x p a n s i o n of access t o c a r e t o u n d e r s e r v e d p o p u l a t i o n s in t h e region. U n d e r any c i r c u m s t a n c e s , t h e
b r o a d e r n e t w o r k of FQHCs in w e s t e r n North Carolina should b e involved in discussions regarding next
steps,

W e have e n g a g e d legal c o u n s e l f r o m Feldesman Tucker Leifer Fidell LLP, a law firm located in
W a s h i n g t o n , DC t h a t specializes in FQHC-related r e q u i r e m e n t s , t o assist in this m a t t e r . W e p r o p o s e t h a t
you a n d / o r t h e Assistant A t t o r n e y G e n e r a l c o o r d i n a t e a call with a t t o r n e y s J a c q u e l i n e Leifer a n d Carrie
Riley t o discuss t h e FQHC c o n s i d e r a t i o n s a n d o u r c o n c e r n s regarding t h e MMA practices. They can b e
r e a c h e d by t e l e p h o n e at (202) 4 6 6 - 8 9 6 0 o r by email a t j l e i f e r @ f t l f . c o m and criley@ftlf.com.

On behalf of o u r h e a l t h c e n t e r s , p a t i e n t s , and t h e c o m m u n i t i e s w e s e r v e , t h a n k you f o r your


s u p p o r t and your c o n s i d e r a t i o n .

[Signatures on foilowing page]


Sincerely,

Charles Shelton
Chief Executive Officer
Bakersville C o m m u n i t y Health C e n t e r

. (iC>
Richard H u d s p e t h , MD
Chief Executive Officer
Blue Ridge C o m m u n i t y Health Services

Alice S a l t h o u s e
Chief Executive Officer
High Country C o m m u n i t y Health C e n t e r

Carlos G o m e z
Chief Executive Officer
W e s t e r n NC C o m m u n i t y Health Services

Enclosures:
Problems with Mission-Dogwood Structure and Governance
SEARCH Position Paper on Conflicts o f Interest within the Proposed Dogwood Health Trust Board
An Open Letter to Dogwood Health Trust and Dr. Ron Paulus
Attachment 1

Problems with Mission-Dogwood Structure a n d Governance


MEMORANDUM

October 20, 2018

TO: Josh Stein, Attorney General


Jennifer Harrod, Special Deputy Attorney General

FROM: Carole Spainhour, Attorney, Elder Law Carolina

RE: Mission-Dogwood Structure and Governance

This memorandum is narrowly focused upon why it is a conflict of interest and


otherwise inappropriate for persons currently or formerly affiliated with Mission
Health to serve on the new Foundation board, and why the Board as constituted
cannot be rehabilitated and the process must be begun de novo, including revised
governance structure.

WHAT CAN BE DONE:

Using similar authority as that granted to the Attorney General under NC law, the
AGs in other states have used their powers to ensure that the Health Foundation's
board is truly independent of the management of the selling hospital. Some states
forbid by statute both the buying and selling entities from serving on the Board
because of the conflict of interest issues. There is a substantial risk that the
community will not receive full and fair value for the conversion of Mission
Health's hospitals and ancillary services if the funds are controlled by a foundation
that is linked to HCA/Mission management.

BRIEF STATEMENT O F THE PROBLEM:

The Board lacks the independence and the qualifications necessary to do the job
successfully, and its organizational documents, drawn by Mission Health's
attorneys, do not reflect best practices in Health Foundation board structure.

It is critical to community perception and proper oversight of the Foundation, and


therefore its success, that the Foundation is a new entity without ties to Mission
Health. As now constituted by Mission Health's board, what we have is a re-

1 IP a g e
organization of the Mission Health board with a new name and a few added
members, but one which is essentially guaranteed to work closely with
HCA/Mission management.

DETAILS OF PROBLEMS:

First is the history of Mission Health in the Communities. The Mission Board
members, while charged with representing the interests of the communities
Mission serves, have acquiesced to Mission management's acquisition of rural
facilities and gutting their services. To the community's eyes, Mission Health
appears to have prioritized actions calculated to improve their industry ratings
rather than responding to the needs of the community. Before Mission took them
over, local residents poured money, time and care into building and running these
hospitals. Negotiations to purchase the facilities were typically conducted in secret.
Cuts in services were announced at the last possible minute. Mission brooked no
community discussion and offered canned responses to community outcries.
Mission has reneged on major promises to some of these communities (Franklin's
Angel Hospital, Spruce Pine's BRRH, Highlands Hospital.) Mission could be a
case study as a failure in public relations according to Bob Scott, Mayor of
Franklin. It is not only what Mission did, it was how they did it. For first hand
particulars, Bob Scott, Mayor of Franklin, Patrick Taylor, Mayor of Highlands, and
Theresa Coletta, Mayor of Bumsville are a good source. The Mission boards (both
local and central) who were responsible for these decisions have lost the trust of
those communities. Where Mission is concerned, people have learned to watch
what they do, not what they say.

Mission has a reputation problem in its home territory as well. It is telling that
when Mission challenged Blue Cross Blue Shield late in 2017 over its
reimbursement rates and stopped accepting BCBS insurance. Buncombe County
surveyed its 1400 employees and asked them if they wanted to stay with BCBS or
with Mission. The majority of respondents wanted to stay with BCBS not
Mission. * It doesn't take much digging to discover there is a great deal of distrust
on the part of Buncombe County residents toward Mission's leadership. Our
community has tolerated Mission's behavior ("bully" is a frequent descriptor)
because we received an acceptable quality of care. This may explain why the
apparent general apathy regarding the sale of Mission to HCA. Comments such as
"Mission has been a for profit system for years" are not uncommon. Dr. Paulus, in
speaking in early May to a group of 20 or so non-profits, said that Mission had the

2 IPa " e
financial wherewithal to continue on its present path for 20 years, but when the
BCBS matter arose, "we found out what the community really thought of us" and
decided it was time to sell.* As was pointed out by the Mary Black Foundation
speaker at the COAH Forum on August 3, a Foundation needs reputational
capital in order to carry out its work. Mission's reputational capital deficiency in
the communities it serves clearly creates a serious handicap for Dogwood
accomplishing anything of substance much less "transformational work" in these
same communities.

Second is the issue of board member qualifications. Dr. Paulus and his team had
already chosen the focus of the foundation as "social determinants of health"
(SDOH). See Mission's Facebook Live #2 by Dr. Paulus and associates. Many
scholarly papers, including an expert cited by Dr. Paulus (Dr. Doug Easterling),
talk about the disconnect between serving as a board member for an acute care
facility with a hierarchical structure, as contrasted to serving on a philanthropic
entity that must accomplish nothing less than changing a population's behavior if it
is to succeed.

What makes a conversion foundation successful is well understood through years


of experience and study. In addressing SDOH issues, the conversion foundation's
leaders must be adaptive in nature to successfully identify what is possible, and to
create or work with grass roots nonprofits to achieve those goals. (Easterling article
attached). It is hard work and requires a "culture of learning" as Frances Sheehan, a
17 year veteran CEO of two large conversion foundations in Pennsylvania, will tell
you, adding that "the kiss of death is the know it all board member" noting that
physicians can be particularly prone to such attitudes. The root problems leading
to poor health outcomes are complex, entrenched and can suck up massive
amounts of cash without changing behavior one jot. One has only to look at the
Eastern Band of Cherokee Indians and the acute health challenges they face despite
access to tribal funds from casino earnings. "Money is necessary but not sufficient,
and there is never enough money" (Karl Stauber). To make headway in this area
requires a completely different skill set. The successful Board must be diverse in
terms of gender, color and include those fi-om privilege as well as those suspicious
of privilege (Karl Stauber), and have meaningful connections to the populations of
the target communities. We know that to to effectively identify and tackle such
chaillenges, there must be enough depth of diversity to empower the "minorities".
The nucleus of this Board lacks diversity and it is highly unlikely that it will select
additional members who will challenge its dominance. Fact: of the 6 Asheville

3 IPa s e
based Trustees named to Dogwood Trust, 5 live in the same zip code in Asheville
in or adjoining ultra wealthy Biltmore Forest (as does Dr. Paulus), and Janice
Brumit, Board Chair, lives in an adjoining zip in a 12,046 square foot home.
Unfortunately this makes the Dogwood Health Trust Board looks like an old boy
Millionaires Club.

Third is the grantmaking role of the Foundation which puts it squarely in a


position to benefit the executives who continue to run HCA owned Mission.
Mission management gave many talks to community groups about the sale and
they were particularly enthusiastic about the benefit to the community of the new
foundation. More specifically, in early May of 2018 Paulus gave a talk to about 20
directors of local nonprofits in Buncombe County and promised that their
organizations would be big winners if the sale to HCA went through. It seems that
Dr. Paulus and his team had already chosen the focus of the foundation and had
determined that it would be giving money to these organizations. Although this
may strike someone who is not part of the Mission team as preempting the
authority of the Board of the new Foundation, Dr. Paulus apparently was confident
that he could speak for the Foundation. As we later learned, by that time the
Mission Board had tapped his longtime friend Janice Brumit to chair the
Foundation (Brumit personally incorporated the foundation on May 16, 2018). The
relationship between Brumit and Paulus clearly runs deep. See Mission Health
newsroom clipping (attached) where Dr. Paulus states "[Brumit's] support,
friendship and mentorship has [sic] been absolutely essential to me as CEO. I came
here largely because of her".

Social Determinants of Health are the upstream factors that play the major role
(70% or more) in determining health care outcomes of the residents of a
community. SDOHs include such as factors as employment, education,
transportation, nutrition, community and personal safety -all unrelated to the
availability or quality of healthcare services. However, we know that Mission
states that direct health care services may be provided by the Foundation. See their
website Q&A. There is nothing in the Foundation's organizational documents that
restricts them from offering direct services. Moreover, many local nonprofit
organizations that provide direct health care also offer SDOH assistance, and it
would be easy to steer Foundation money toward providing health care services
offloaded from HCA, even if the dollars were said to be for SDOH. For example,
the Appalachian Mountain Community Health Centers (AMCHC) Board of
Directors has been told by Mission executives that their primary care clinics can

41 Pa a e
receive rnoney from the Foundation. AMCHC is one of many Federal Qualified
Health Clinics- FQHC- in WNC, funded by federal dollars and eligible for much
higher reimbursement rates for Medicaid patients than other providers. The Sales
contract makes it explicit that the Foundation will provide direct health care
services through a for-profit entit}'. See "Physician or Dental Clinic" definition p.
22 and (b) p. 97. It appears that this is setting up the support by Foundation of the
FQHC mentioned above. What has not been made public is that HCA reportedly
has refused to buy the 24 Primary Care physician practices owned by Mission (as
of late August), but will buy the lucrative specialty practices. This means that the
primary care offered by 24 Mission owned physician practices which serve a
"critical need in WNC" according to Dr. Paulus (a fact beyond dispute), will now
be thrown into limbo, and reportedly subject to a questionable scheme to lease the
practices/doctors' services to its "friendly" FQHC, Appalachian Mountain Health
Clinic, using the Foundation's money. (This information is based on a
conversation from late July*). This is a complicated and highly sensitive issue
involving federal law and one on which Mission has been working for many
months. Only the AG is in a position to get to the bottom of this issue.

It is important to note that Mission was instrumental in creating AMCHC,


apparently in order to push much of the care it was providing to uninsured and
Medicaid recipients to the AMCHC clinics. (News articles attached). AMHC did
not meet the criteria for FQHC eligibility and it created a firestorm of controversy
among the legitimate FQHCs who treat almost 50% uninsured patients, as
compared to AMHC which has only a 18% uninsured patient base.** Mission
gamed the system to improve its financial results and there is no reason to think
this behavior will not continue or intensify under HCA ownership^ to the
community and the Foundation's ultimate detriment.

li'ourth, and most critical is the Foundation's role in enforcing the agreement
between Mission and HCA. Here it is imperative that the Trust be truly
independent of both HCA and Mission - not independent in name only.

The recent announcement of the sales agreement affirmed that Mission executives
will continue to run the system under the Mission brand as a division of HCA. It is
alarming that the role of enforcer is contractually restricted to a Foundation which
is so closely aligned with the entity it is supposed to monitor, making any contract
guarantees by HCA illusory. The prospect of HCA violating the asset purchase
agreement must be given serious consideration given their past performance. If the

5 IP a a e
Board is to effectively enforce the Agreement they must have the interest of the
communities as their only priority, unsullied by any allegiance to Mission/HCA.
And the Board must have the appropriate tools to discourage nonperformance and
to enforce the contract provisions against HCA or its successors in interest. Once
the initial sale of Mission to a for profit is consummated, there are no further
barriers to subsequent ownership of this hospital system by hedge funds or any
other entity. The community is left exposed and vulnerable if HCA decides its
foray into NC was a mistake.

We know from other conversion foundations' experience that former hospital


board members on the conversion board are psychologically invested in justifying
their decision (particularly to sell to this particular entity) which impairs their
ability to monitor the performance of the new entity, still being managed by their
friends and former associates. They tend to rationalize the bad acts of the converted
hospital, rather than zealously defend the interests of community. (Sheehan,
Delaware Community Foundation, Brandywine Foundation).

Moreover, it strains credulity to think that when the executives of HCA/Mission


need a favor, the Board of the Foundation will turn a deaf ear. The likelihood of
this being brought to the public's attention is almost nil if the Board is controlled
by Mission. Even one or two persuasive Board members can create the benefit that
Mission/HCA seeks without detection of the intended benefit to HCA. The
enforcement agencies (AG and IRS) have no entryway to become involved unless
actions become public through whistle blowers. By the time the problems become
public the damage is done.

These problems can be avoided by eliminating the risk factor of a Mission


influenced or controlled Board. The Board must be composed of the best
candidates for the job (for example, by using the Raleigh consultants used by
Danville Regional Foundation and community advisory committees) and its
governance must incorporate the best practices in tiae industry in terms of
succession and staffing. Most imp:ortantly it must be truly independent and free of
any connection with Mission. The ties that bind Mission and Dogwood mean that
there will never be any assurance that there are not ulterior motives behind any
Dogwood activity.

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Attachment 2

SEARCH Position Paper on Conflicts of Interest within the


Proposed Dogwood Health Trust Board
mi
Sustaining Essential And
Rural Community Healthcare

SEARCH Position Paper on Conflicts of Interest


within the Proposed Dogwood Health Trust Board

This document, which supplements SEARCH'S earlier issue brief on the Mission-HCA sale,
explores in greater detail why it is deeply problematic - and arguably a conflict of interest as
defined in the law of corporations - for persons currently or formerly affiliated with Mission
Health to sit on the Dogwood Health Trust board.

Most discussion of the trust has focused on its grantmaking role. But equally important is its role
in enforcing the agreement between Mission and HCA. It is imperative in both contexts that the
trust be truly independent of both HCA and Mission - not independent in name only.

These concerns would exist even if Mission's leaders and the Mission name were no longer to be
a part of the system. But that is not the case. The recent announcement of the final sales
agreement affirmed, as indicated earUer, that Mission executives will continue to run the system
under the Mission brand as a division of HCA.

In fact. Mission has consistently downplayed the fact that it is being sold, using words like
"partner" and "affiliate" to describe what is, in fact, an outright sale. The message seems to be: •
"Don't worry, we'll still be here, and you won't notice any change." Mission's press release of ';
Aug. 31 formulates it thus: "Mission Health will continue to be managed locally ..

How much autonomy Mission's executives will have in operating their division is wholly
unclear. It is presumably spelled out between the parties and is (or will be) known to the
Attorney General. But it has not been shared with the public. Logic suggests, though, that
Mission's leaders would not be eager to stay if they were deprived of substantial decision-
making authority going forward.

Consumers Union and Community Catalyst are at the forefront of analyzing the pitfalls inherent
in nonprofit hospital conversions. According to their research, nothing is more critical to the
effectiveness of the successor foundation than the makeup of its initial board:

To deliver the maximum benefit to its community, the new health foundation must act
impartially, and it must be viewed from the outset as making decisions fairly and without
bias. It is essential that the foundation not carry obligations to provide or fimd services
that should be delivered by the successor corporation. It must not favor (or disfavor)
providers or other community partners on the basis of their alignment with, or
competition with, the converting nonprofit or its successor.

It is for these reasons - together with the need to assemble the right mix of skills and
background - that the board of the converting nonprofit should not be carried forward to
become the board of the new foundation. Once the planning process has identified criteria
and priorities for board recruitment, some members of the board of the converting
nonprofit may be considered, together with other candidates, for board seats. However,
they should not receive priority consideration, and no seat on the goveming board,
contract or staff role with the foundation should be committed in advance to an executive
or board member of the nonprofit that is the source of the endowment.

Consider the chasm between that ideal and the actions of Mission Health. Even as the sale was
being hammered out, Mission quietly (one might say surreptitiously) went about creating a
successor foundation dominated by Mission board members. Only one of the nine announced
members has not served on the board of the system or a component institution. Three are current
Mission board members, three are past board presidents and two have served on the boards of
individual Mission hospitals.

Most were appointed in May, three months before the sale agreement was finalized and long
before Mission announced formation of the trust or put out a call for nominations from the
public. Although current system chair John Ball acknowledged in early August that six members
had been named and three were pending, he suggested that only three - not eight - had ties to
Mission. (And he concealed the fact that he himself is among the appointees),

Shortly before that, Ms. Brumit had intimated to a reporter that board members other than herself
would be chosen only after criteria were finalized. That pattern of misdirection, if not duplicity,
perfectly exemplifies the fashion in which Mission has created the successor foundation. It
would be hard to design a process calculated to inspire less trust.

Meanwhile, even as Mission was creating Dogwood in secret, CEO Ron Paulus was trying to
buy support for the HCA sale by quietly promising various local nonprofits that they would
receive money from the trust. In the same vein, the Mission board announced that, if the sale
goes through, the individual foundations attached to Mission's hospitals will receive grants of as
much as $15 million each.

What clearer signal can Mission - soon to be a part of HCA - send? Mission considers the trust
its to run and the trust's money its to give away. And Mission's leaders have no scruples about
committing that money to endeavors that may or may not support the trust's long-term strategic
aims but transparently support Mission's short-term corporate aims.

A graphic included - perhaps inadvertently - on the missionhealthforward.org website plainly .


says as much: The successor foundation will be "established disidi governed'' by the Mission board
(emphasis added). (See Appendix A.) •

Mission has even branded the trust as an offshoot of Mission. The DHT logo, as it appears on the
trust's website, is identical to Mission's, right down to the font. (See Appendix B.) That may
appear trivial, but there is no more potent expression of a corporation's identity than its logo.

The conclusion is inescapable: If the trust is a creature of Mission, and Mission is a


creature of HCA, the trust will not be independent of HCA. The implications for grant
making are alarming, but not nearly as alarming as the implications for oversight.

In fact, what Mission is pursuing with almost indecent haste is a situation in which a trust
strongly dominated by Mission board members is responsible for enforcing compliance by
a team of executives with whom they have made common cause for years (and in many
cases, decades). In plain English, that doesn't pass the smell test.

Recent case law is instructive on this point. In 2016 the Supreme Court of Delaware found in
Sandys v. Pincus that, using a reasonable doubt standard, "an extremely close, personal bond"
between a corporate director and a corporate executive "created an inference that [the director]
cannot act independently of [the executive]."

The court's majority specifically found that the inference of a conflict "does not require a
plaintiff to plead a detailed calendar of social interaction to prove that directors have a very
substantial personal relationship rendering them imable to act independently of each other." In
that case, the "bond" was inferred frqm joint ownership of a private airplane - a far less
psychologically and emotionally fraught relationship than ones forged in steering a nonprofit
healthcare system through perilous times.

In effect, Mission's executives and directors have served in the trenches of a bloody war of
attrition, fighting the good fight together against all the vagaries of a collapsing health care
marketplace. It would take almost superhuman detachment for the Mission-Dogwood contingent
to cry foul on their Mission-HCA comrades.

It is worth noting, too, that for the Mission-Dogwood board members to charge Mission-HCA
with noncompliance would also be to concede that they themselves had exercised poor
judgement in approving the sale.

Consider the contrast with the Health Care Foundation of Greater Kansas City, created by
Missouri Attorney General Jay Nixon when HCA bought Health Midwest in 2003. Nixon
himself, acting on no more explicit authority than that conferred in North Carolina law,
appointed the foundation's first board. It encompassed people from the medical, social service,
business, union, government, financial and religious realms. Most importantly, it included no one
associated with Health Midwest - a guarantee that it would be truly independent.

If the current appointments are allowed to stand, an aura of insider dealing will Unger over the
foundation, breeding public distrust toward an endeavor for which public trust is essential. It is a
truism of conflict-of-interest theory that the appearance of conflict can be as deadly as the reality.
This venture is too vital to the future health of Western North Carolina to be tainted from the
start by both real and perceived conflicts. .

The Attorney General's mandate to ensure that the sale of Mission Health is in the public interest
demands nothing less than rejection of the board proposed by Mission. To repeat: eight of the
nine proposed members are individuals who should be barred. There exists a reasonable
inference that they cannot act independently to enforce the terms of the sales agreement.

To fulfill his duty to ensure the board's independence, the AG need not invent a wheel.
Precedents established by other attomeys general (in some instances, without the benefit of
explicit statutory authority) point to mechanisms for creating a board that is qualified.
independent and truly representative of the public whose interests the AG is sworn to protect.
(See Appendix C.)

Appendix A

H o w is t h e N e w F o u n d a t i o n C r e a t e d ?

Mig*>ion HaaUhi Svstei • E s l a t j i i s h e ' i by iind g o v e r n r d


by Wissjor> He-aUh B o a r d
• NOT controMcd or i n f t u e n c c o
by HCA

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Excerptedfrommissionhealthforward.org

Appendix B

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fc" MiSSION
. HFAI.TH SfUVlCtS I TRfATMt DOGWOOD
HEALTH TRUST

No Matter w h e r e Life "Impro


Takes Us ofWcsteri
You Are Our Mission
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Mission HOBIOI

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Mission homepage (screen shot taken 8/15/18) DTH homepage (screen shot taken 8/15/18)
Appendix C

Here, for purposes of comparison, are tHe applicable sections of laws governing the disposition
of nonprofit assets in North Carolina and other selected states as well as notes on how attomeys
general of those states interpreted the law.

North Carolina

What the law says: § 55A-12-02. Sale of assets other than in regular course of activities,
(g) A charitable or religious corporation shall give written notice to the Attorney General
days before it sells, leases, exchanges, or otherwise disposes of all, or a majority of, its
property if the transaction is not in the usual and regular course of its activities unless the
Attorney General has given the corporation a written waiver of this subsection. This
notice shall include all the information the Attorney General determines is required for a
complete review of the proposed transaction. The Attorney General may require an
additional 30-day period to review the proposed transaction by providing written notice
to the charitable or religious corporation prior to the expiration of the initial notice
period. During this 30-day period, the transaction may not be finalized.

§ 55A-13-02. Authorized distributions.


(1) A corporation may make distributions to any entity that is exempt under section
501(c)(3) of the Internal Revenue Code of 1986 or any successor section, or that is
organized exclusively for one or more of the purposes specified in section 501(c)(3) of
the Internal Revenue Code of 1986 or any successor section and that upon dissolution
shall distribute its assets to a charitable or religious corporation, the United States, a state
or an entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986
or any successor section.

Missouri

What the law says: 355.676. Dissolution of public benefit corporation. 1. A public
benefit corporation shall give the attorney general written notice that it intends to dissolve
at or before the time it delivers articles of dissolution to the secretary of state. The notice
shall include a copy or summary of the plan of dissolution. 2. No assets shall be
transferred or conveyed by a public benefit corporation as part of the dissolution process
until twenty days after it has given the written notice required by subsection 1 of this
section to the attorney general or until the attorney general has consented in writing to or
indicated in writing that he will take no action in respect to, the transfer or conveyance,
whichever is earlier.

355.691. Effect of dissolution. (6) If the corporation is a public benefit corporation, and
no provision has been made in its articles or bylaws for distribution of assets on
dissolution, transferring, subject to any contractual or legal requirement, its assets
exclusively for one or more purposes described in section 501(c)(3) of the Internal
Revenue Code; or if the dissolved corporation is not described in section 501(c)(3) of the
Internal Revenue Code, to one or more public benefit corporations, including a foreign
corporation that would qualify under this:chapter as a public benefit corporation;

The AG's interpretation: In 2003, when Health Midwest was bought by HCA, Attorney
General Jay Nixon oversaw creation of the Health Care Foundation of Greater Kansas
City and personally appointed the initial board. No one associated with Health Midwest
was named to the board.

Kentucky

What the law says: 273.323 Notification to Attorney General. The Secretary of State, on
or before the last day of December of each year, may certify to the Attorney General the
names of all corporations which have given cause for dissolution as provided in KRS
273.161 to 273.390, together with the facts pertinent thereto. Whenever the Secretary of
State shall certify the name of a corporation to the Attorney General as having given any
cause for dissolution, the Secretary of State shall concurrently mail to the corporation at
its registered office a notice that such certification has been made. Upon the receipt of
such certification, the Attorney General may file an action in the name of the state against
such corporation for its dissolution.

The AG's interpretation: To create a successor foimdation to Kentucky Blue Cross


Blue Shield, the Attorney General formed a Planning Committee of consumers, health
care advocates, health care professionals, and academics. The committee drafted a
mission statement, articles of incorporation, and by-laws. In addition, the Committee
recommended a process for choosing members of the first board of the foundation that
was deliberate, open, and accessible to health care consumers and the broader public.

Massachusetts

What the law says: Ch. 180, 8A (d) (1) A nonprofit acute-care hospital, as defined in
section 25B of chapter 111, or a nonprofit health maintenance organization as defined in
chapter 176G shall give written notice of not less than 90 days to the attorney general and
to the commissioner of public health if such notice concerns a nonprofit health
maintenance organization, before it enters into a sale, lease, exchange, or other
disposition of a substantial amount of its assets or operations with a person or entity other
than a public charity. No such notice shall be required if a written waiver of such notice is
executed by the attorney general. ...

(4) If a charitable fund results from the transaction, and if the nonprofit entity making the
disposition does not continue its operation of a nonprofit hospital or nonprofit health
maintenance organization, the governance of the charitable fund shall be subject to
review by the attorney general and approval by the court. The governance of the
charitable fund shall be broadly based in the community historically served by the
predecessor nonprofit acute care hospital or health maintenance organization and shall be
independent of the new for-profit entity. The attorney general shall conduct a public
hearing in connection with his review of the plan for the governance of the resulting
charitable fund. An appropriate portion of any resulting proceeds shall, if determined to
be necessary by the attorney general, be used for assistance in the development of a
community-based plan for the use of the resulting charitable fund.

The AG's interpretation: The governance of the fund must be broadly based in the
community. This means that the board members of the Institution [the nonprofit hospital]
may not be the board members of the successor charitable fund.

(Excerpted from the Attorney General's Guidelines for Transfers of Nonprofit Acute
Care Hospitals and HMOs. The definition of "Institution" occurs in this passage:
"Transactions involving nonprofit acute-care hospitals and nonprofit HMO's (each, an
'Institution,' and collectively, 'Institutions') are subject to specific procedural
requirements ...")
Attachment 3

An Open Letter to Dogwood Health Trust a n d Dr. Ron Paulus


An Open Letter to Dogwood Health Trust and Dr. Ron Paulus:

The formation of the Dogwood Health Trust (DHT) presents a once-in-many-generations


opportunity for WNC.

We, the undersigned organizations, support DHT's boldly stated intent "to reflect the population,
gender and ethnic distribution of the service area" — and we appeal to DHT fulfill that objective
by forming a board that authentically embodies WNC.

At this key time in the development of the DHT board of directors, we note that although DHT's
service area is 52 percent female, its named Trustees are only 22 percent female. While
Buncombe County has a 10 percent non-white population, none of the named Buncombe
County Trustees are non-white. With one exception, the East and West regions to be served by
DHT also are not yet reflective of demographics found in those counties.

It takes many perspectives to find the solutions to imbedded societal challenges. While many
may see points of division in the region, we believe that DHT has a unique opportunity to
transcend separations of geography, population density, race, ethnicity, and gender. As one of
the largest per-capita foundations in the country, DHT can set the stage for truly transformative
work by creating a diverse board that brings together - and shares decision-making power
among - representation from all of the voices of our region.

This is bold work, and we urge DHT to be courageous and transparent as it continues its
selection process. Because we share DHT's resolve, we offer the collective wisdom and
experiences of our organizations as a resource to assist in understanding how to best build a
board that both represents and truly grasps the challenges and opportunities that exist in ail
corners of our region.

By creating a foundation board that reflects the populations DHT was created to serve, DHT will
be better able to achieve its mission to dramatically improve the health and wellbeing of all
people and communities in Western North Carolina.

Sincerely,
Carmen Ramos-Kennedy, President
Asheville Buncombe County NAACP
With:
American Association of University Women- Asheville Branch
ACLU Western North Carolina Chapter
Asheville Buncombe Institute of Parity Achievement
Children First/Communities in Schools
Carolina Jews for JusticeA/Vest
Christians for a United Community
Coming to the Table
Elders Fierce for Justice
YWCA of Asheville and WNC
S T A T E OF N O R T H CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE T O L L - F R E E IN NC: 8 7 7 . 5 6 6 . 7 2 2 6

ATTORNEY GENERAL 9 0 0 1 MAIL S E R V I C E C E N T E R OUTSIDE O F N C : 9 1 9 . 7 1 6 . 6 0 0 0

RALEIGH, N O R T H CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0

WWW.NCDOJ.GOV

November 27, 2018

Dr. Richard Hudspeth


Chief Executive Officer
Blue Ridge Community Health Service
PO Box 5151
Hendersonville, NC 28793

Dear Dr. Hudspeth:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its- intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concems about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

/
Josh Stein
Attorney General of North Carolina

JS/tms
Yost, Julie

From: notification® prsOlhcrmpsOl.ic.local


Sent: Wednesday, November 14, 2018 8:45 AM
To: Consumer
Subject: HCA/Mission Merger
Attachments: HealthCenters_LetterReMissionAcquisition.pdf

Notes
Received on 11-1-18.1 may have sent this already yesterday. Thanks!!! Karen

Contact
No Name
bhall@feldesmantucker.com

Message
Good afternoon,

I hope you are well.

Thank you for returning my call yesterday. I am re-forwarding the email.

I'm sorry for the follow-up and bothering you with your busy schedule. When Carrie originally sent the email,
she received a notification that it may have not been delivered, so we wanted to confirm that you received it.

Can you please confirm receipt of this email?

I am looking forward to hearing from you!

Thank you,

Brittney Hall
Legal Assistant
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlfcom

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify bhall@feldesmantucker.com immediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.

From: Riley, Carrie Bill


Sent: Friday, October 26, 2018 4:10 PM
To: 'jharrod@nc.doj.gov' <jharrod@nc.doj.gov>; 'ncago@nc.doj.gov' <ncago@nc.doj.gov>
Subject: Letter from Western NC Health Centers Re HCA/Mission Merger

Good afternoon.

My name is Carrie Riley and I am an attorney submitting the attached on behalf of the organizations named in
the letter.

As requested in the attached, we propose coordinating a call to discuss the matter further. Your time and review
is much appreciated.

Sincerely,
Carrie

Carrie Bill Riley


Partner
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information from the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any fiirther
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify criley@Feldesmantucker.com immediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.
October 26, 2018

Josh Stein, Attorney General


Attorney General's Office
9001 Mall Service Center
Raleigh, NC 27699-9001

Dear Mr. Stein:

We are writing to you on behalf of Blue Ridge Community Health Services, High Country
Community Health, Western North Carolina Community Health Services, and Bakersville Community
Health Center, each of which is located in western North Carolina and is a federally qualified health
center (FQHC). Our organizations have a long history of providing care for t h e most vulnerable
populations in our region, with a particular focus on serving low-income, uninsured, agricultural
workers, and homeless persons.

On average, our organizations have been operating as FQHCs for over 25 years, and each of our
organizations has been designated as a patient centered medical home by t h e Joint Commission or the
National Committee for Quality Assurance (NCQA). In addition to being recognized for our provision of
high quality primary care, our organizations have a history of working collaboratively with other human
service organizations to improve t h e health and well-being of those living and working in the
communities we serve.

As FQHCs receiving grants or look-alike designation from the Health Resources and Services
Administration (HRSA) within the Department of Health and Human Services (DHHS), we are statutorily
obligated to furnish a broad range of primary and preventive health services, including outreach, and to
assure that no patient will be denied health care services due to an individual's inability to pay for such
services. We also offer a broad range of behavioral health services, including substance abuse and
treatment services. Together, we provide care for over 60,000 low-income adults and children (<200%
Federal Poverty Level), with over 20,000 living in poverty (<100% Federal Poverty Level). Over 30,000
uninsured individuals rely on our health centers for their care. We are committed t o continuing to serve
as the primary safety net providers for western North Carolina and take pride in our ability to work
cooperatively in the best interests of t h e patients we serve.

It is in that spirit that we write this letter to express our significant concerns about for-profit
HCA Healthcare's potential acquisition of Mission Health. Specifically, we are concerned that the
proceeds resulting from that sale will not be allocated equitably, supporting t h e established safety net
providers in the region and benefitting the residents of western North Carolina. Rather, as described
below, we anticipate that the proceeds will be allocated in a manner that furthers the interests of HCA,
Mission, and Mission's partners. In addition, we believe that Mission and HCA intend to transfer most, if
not all, of t h e twenty Mission Medical Associates (MMA) outpatient primary care clinics to an existing
FQHC that maintains close ties with Mission, as described below. This transfer would significantly
increase Medicaid costs in western North Carolina, without achieving any meaningful expansion of
service to medically underserved populations or quality improvement.
1
While the creation of a $1.5 billion Foundation could present a rare opportunity t o e n h a n c e t h e
health and well-being for t h e residents of western North Carolina, it will not do so if it is implemented in
a m a n n e r t h a t is deceptive and only furthers Mission and HCA's interests. In this letter w e explain our
public interest concerns.

Mission is Integrally Tied w i t h a Single FQHC in t h e Western North Carolina Region

In 2014 Mission, in collaboration Mountain Area Health Education Center (MAHEC), established
a new corporation, Mountain Area Health Center nka Appalachian Mountain Community Health Center
(AMCHC), t o a s s u m e operational authority over certain MAHEC and Mission outpatient primary care
clinical practices. In 2015, AMCHC applied for and was awarded a HRSA grant t o o p e r a t e as a FQHC.
The transferred Mission and MAHEC outpatient primary care clinical practices were included as "sites"
within t h e health c e n t e r project. Soon after AMCHC obtained t h e grant award, we obtained a copy of
t h e AMCHC grant application and found t h a t it seriously misrepresented needs assessment data,
inaccurately described existing primary care practices in t h e community, falsely suggested t h a t it
maintained collaboration arrangements with existing FQHCs, and did not properly disclose AMCHC's
relationship with Mission.

FQHC status provided AMCHC (and its transferred Mission practices) with various benefits, most
notably special r e i m b u r s e m e n t from Medicare and Medicaid based on its actual costs of providing
covered services. The FQHC cost-based reimbursement rates w e r e and are considerably higher than t h e
fee-for-service payment schedules available to Mission. Accordingly, t h e transfer of t h e primary care
clinical practices resulted in significant cost savings for Mission. Although Mission did not directly
o p e r a t e t h e transferred clinics, it retained indirect involvement and influence by assuming AMCHC
Board seats and leasing provider capacity to AMCHC.

We strongly suspect that t h e FQHC grant application was nothing more than an a t t e m p t t o
convert t h e Mission and MAHEC practices to a FQHC structure for t h e sole business purpose of
improving their respective bottom-lines, without any meaningful increase in access to affordable care. 1
While we cannot confirm t h a t this was t h e intent, w e can only question what would have motivated
MAHEC and Mission to pursue establishing a new FQHC, rather than collaborating with t h e existing high
quality safety-net FQHCs t h a t had d e m o n s t r a t e d and d o c u m e n t e d their desire t o work t o g e t h e r to
expand care in t h e region. It is our understanding t h a t since its initial FQHC designation, AMCHC has
been closely scrutinized by HRSA and has had numerous findings of non-compliance. In response t o
such findings, HRSA has imposed several conditions on AMCHC's grant, and has accordingly issued
several shortened project periods. It.is important t o note that, since its FQHC designation, AMCHC has
not meaningfully expanded access to health care services t o t h e medically underserved communities in
w e s t e r n North Carolina, consistent with t h e purposes of t h e health c e n t e r project grant. In 2017, only
18% of AMCHC patients w e r e uninsured, and this was a decrease from 2016.

It is important t o consider t h e historic relationship between Mission and AMCHC w h e n assessing


t h e HCA acquisition and, in particular, the role and independence of t h e Dogwood Health Trust.

1
The Mission Chief Executive Officer, as part of his 2012 Year in Review, stated publicly that one of the health
system goals was to "give" FQHC status to MAHEC in order to improve the financial positions of both organizations
"by millions" (by taking advantage of the FQHC reimbursement models).
2
The Foundation is Not Independent

Mission and HCA have indicated t h a t t h e purpose of t h e newly created Dogwood Health Trust
will be t o "dramatically improve the health and well-being of all people and communities of Western
North Carolina." Mission and HCA have f u r t h e r suggested t h a t t h e selection of t h e initial directors will
be conducted through a transparent process, posted on t h e Dogwood Health Trust website, with
representation from across t h e region and safety net system. However, they have failed to note t h a t
t h e Dogwood Health Trust will be dominated by Mission board members. Only o n e of t h e nine
announced m e m b e r s has not served on t h e board of t h e Mission system or an affiliate institution. Three
of t h e m e m b e r s are current Mission board m e m b e r s , t h r e e are past board presidents, and t w o have
served on t h e boards of individual Mission hospitals. Although t h e r e is technically a means to nominate
individuals via t h e Trust's website, we have reason to believe t h a t such means are illusory. For example,
it is our understanding t h a t most of t h e board m e m b e r s w e r e appointed to t h e Dogwood Health Trust in
May, long before Mission announced t h e formation of t h e Dogwood Health Trust or put out a call for
nominations from t h e public. In addition, w e are aware of senior executives f r o m w e s t e r n North
Carolina non-profit organizations w h o w e r e nominated t o serve on t h e Dogwood Health Trust, none of
w h o m have been contacted.

The lack of independence of t h e Dogwood Health Trust is deeply concerning given t h e


Foundation will receive $1.5 billion in proceeds, with an anticipated $75 million in annual spending t o
address t h e social issues affecting t h e health and well-being of residents t h r o u g h o u t Mission's western
North Carolina service area.

We had an opportunity to review t h e enclosed documents, entitled "Problems with Mission-


Dogwood Structure and Governance," "SEARCH Position Paper on Conflicts of Interest within the
Proposed Dogwood l-lealth Trust Board," and "An Open Letter to Dogwood Health Trust and Dr. Ron
Paulus," which w e r e recently sent t o you. W e share t h e s a m e d e e p concern t h a t t h e Dogwood Health
Trust is a creation of Mission and will not be i n d e p e n d e n t of HCA.

The Foundation fVlav Ineaultablv Favor Supporting AMCHC

We are particularly concerned by t h e Dogwood Health Trust's lack of i n d e p e n d e n c e given t h a t


Mission has maintained close ties with AMCHC. For example. Mission's Executive Director of
Ambulatory Finance currently serves on t h e AMCHC Board of Directors, Mission's Chief Operating
Officer currently serves as AMCHC's Director of Eastern Operations, and several AMCHC providers are
contracted from Mission Medical Associates.

It a p p e a r s t h a t maintaining links with AMCHC is a key f e a t u r e t o t h e acquisition. Despite t h e


fact t h a t Mission and Dogwood Health Trust leaders routinely state t h a t t h e Foundation will focus on
social d e t e r m i n a n t s of health, the Asset Purchase Agreement specifically references t h e Foundation's
and Mission's intent to maintain a n d / o r establish relationships with FQHCs. For example, Section 7.3(b)
of t h e Asset Purchase Agreement notes t h a t t h e "Foundation shall be permitted to establish, organize,
and provide financial support or grants to any federally qualified health center or similar program." I n
addition. Section 7.3(f) explicitly references continuation of Mission's "current activities with
Appalachian Mountain Community Health Center." The term "current activities" is vague and undefined.
Although Section 7.3(b) broadly refers to FQHCs, none of us have been contacted by Mission or
HCA regarding opportunities to collaborate o r t o provide input. We suspect t h a t such language was
included t o preserve Mission's longstanding support of AMCHC, rather t h a n t o reflect a c o m m i t m e n t t o
supporting our network of safety net providers.

AMCHC W i l l Likelv Expand W i t h o u t A M e a n i n g f u l Increase in Access t o Care

As w e are concerned t h a t t h e Dogwood Health Trust is likely to inequitably favor supporting


AMCHC over the existing network of FQHCs, our greater concern pertains to t h e f u t u r e of t h e twenty
MMA outpatient primary care practices, which are located across t h e region, often directly within our
service areas. Specifically, w e have reason to believe t h a t Mission and HCA intend to transition
operational authority over such outpatient primary care practices to AMCHC.

Although neither Mission nor HCA have addressed t h e m a t t e r publicly, t h e AMCHC Board Chair
has stated to a local attorney t h a t AMCHC is likely to expand to include t h e MMA outpatient primary
care practices as a result of t h e acquisition. He has also a t t e n d e d over 10 planning meetings with
Mission's senior m a n a g e m e n t t e a m . To date, none of us have been consulted by Mission or HCA
regarding t h e acquisition, let alone been included in key planning meetings. Additionally, as mentioned
above, t h e MMA Chief Operating Officer was recently contracted t o serve as t h e AMCHC Director of
Eastern Operations. We suspect t h a t this position was established and staffed by an MMA
representative to assist in t h e transition of t h e MMA outpatient primary care practices to AMCHC.

This strategy would expand AMCHC's reach far across western North Carolina. 2 We are
concerned t h a t t h e expansion is financially motivated rather than rooted in an interest t o expand
resources to additional uninsured individuals. As noted above, traditional outpatient primary care
practices in North Carolina receive payment pursuant t o a Medicaid fee-for-service payment schedule,
w h e r e a s FQHCs are entitled t o a special reimbursement based on their actual costs of providing services
in recognition of our d e e p c o m m i t m e n t (and legal obligation) to extend services t o uninsured and
underinsured residents of our service areas. Although t h e FQHC rate varies a m o n g health c e n t e r sites,
we can assume t h a t such reimbursement Will be considerably higher than t h e traditional fee-for-service
payment rate t h a t MMA currently receives. This would not be so alarming if we did not have reason to
believe t h a t t h e site transfers would be "turnkey" transitions, w h e r e t h e o u t p a t i e n t primary care
practices would simply shift to AMCHC with no t r u e expansion in services and access to care for
medically underserved populations.

In 2012, many state Medicaid directors, through t h e National Association of Medicaid Directors,
expressed their significant concerns t o CMS and HRSA regarding t h e s e types of transactions, noting t h a t
while in s o m e cases health c e n t e r and hospital affiliations may increase access t o care, in o t h e r cases
affiliations may only result in greater reimbursement for current access. This is precisely t h e situation
we are faced with in western North Carolina. If t h e MMA outpatient primary care practices transfer t o
AMCHC, w e do not anticipate any service expansion, yet Medicaid costs would significantly increase.
This would be a s t e p backwards as t h e state works towards achieving its quality-driven p a y m e n t reform
goals.

2
Note t h a t Section 7.3(b) of t h e Asset Purchase Agreement indicates t h a t t h e Foundation may
"establish" or "organize" a new FQHC. We suspect t h a t such language was included t o provide Mission
with an avenue to transition all or s o m e of t h e MMA outpatient primary care practices t o FQHC status in
t h e event t h a t HRSA rejects t h e addition of such "sites" to AMCHC's FQHC scope of project.
4
Next Steps

This transaction will impact tlie residents of our region for decades t o come. Addressing t h e
a f o r e m e n t i o n e d concerns is of p a r a m o u n t importance to protect t h e public interest.

We request t h a t you use your authority as t h e AG t o ensure t h a t t h e Foundation board is truly


i n d e p e n d e n t . W e f u r t h e r request t h a t you require HCA and Mission to disclose w h e t h e r they intend t o
transition t h e MMA outpatient primary care practices and, if so, how t h e transfers will result in t h e
expansion of access to care t o underserved populations in t h e region. Under any circumstances, t h e
broader network of FQHCs in western North Carolina should be involved in discussions regarding next
steps.

We have engaged legal counsel from Feldesman Tucker Leifer Fidell LLP, a law firm located in
Washington, DC t h a t specializes in FQHC-reiated requirements, to assist in this matter. We propose t h a t
you a n d / o r t h e Assistant Attorney General coordinate a call with attorneys Jacqueline Leifer and Carrie
Riley t o discuss t h e FQHC considerations and our concerns regarding t h e MMA practices. They can be
reached by t e l e p h o n e at (202) 466-8960 or by email atjleifer@ftlf.com and criley@ftlf.com.

On behalf of our health centers, patients, and t h e communities we serve, thank you for your
support and your consideration.

[Signatures on following page]


Sincerely,

Charles Shelton
Chief Executive Officer
Bakersville Community Health Center

( f f / / / ,

Richard Hudspeth, MD
Chief Executive Officer
Blue Ridge Community Health Services

/"•

Alice Salthouse
Chief Executive Officer
High Country Community Health Center

Carlos Gomez
Chief Executive Officer
Western NC Community Health Services

Enclosures:
Problems with Mission-Dogwood Structure and Governance
SEARCH Position Paper on Conflicts of Interest within the Proposed Dogwood IHealth Trust Board
An Open Letter to Dogwood l-lealth Trust and Dr. Ron Paulus
Attachment 1

Problems with Mission-Dogwood Structure a n d Governance


MEMORANDUM

October 20, 2018

TO: Josh Stein, Attorney General


Jennifer Harrod, Special Deputy Attorney General

FROM; Carole Spainhour, Attorney, Elder Law Carolina

RE: Mission-Dogwood Structure and Governance

This memorandum is narrowly focused upon why it is a conflict of interest and


otherwise inappropriate for persons currently or formerly affiliated with Mission
Health to serve on the new Foundation board, and why the Board as constituted
cannot be rehabilitated and the process must be begun de novo, including revised
governance structure.

WHAT CAN BE DONE:

Using similar authority as that granted to the Attorney General under NC law, the
AGs in other states have used their powers to ensure that the Health Foundation's
board is truly independent of the management of the selling hospital. Some states
forbid by statute both the buying and selling entities from serving on the Board
because of the conflict of interest issues. There is a substantial risk that the
community will not receive full and fair value for the conversion of Mission
Health's hospitals and ancillary services if the funds are controlled by a foundation
that is linked to HCA/Mission management.

BRIEF STATEMENT OF THE PROBLEM:

The Board lacks the independence and the qualifications necessary to do the job
successfully, and its organizational documents, drawn by Mission Health's
attorneys, do not reflect best practices in Health Foundation board structure.

It is critical to community perception and proper oversight of the Foundation, and


therefore its success, that the Foundation is a new entity without ties to Mission
Health. As now constituted by Mission Health's board, what we have is a re-

1 IP a " e
organization of the Mission Health board with a new name and a few added
members, but one which is essentially guaranteed to work closely with
HCA/Mission management.

DETAILS OF PROBLEMS:

First is the history of Mission Health in the Communities. The Mission Board
members, while charged with representing the interests of the communities
Mission serves, have acquiesced to Mission management's acquisition of rural
facilities and gutting their services. To the community's eyes, Mission Health
appears to have prioritized actions calculated to improve their industry ratings
rather than responding to the needs of the community. Before Mission took them
over, local residents poured money, time and care into building and running these
hospitals. Negotiations to purchase the facilities were typically conducted in secret.
Cuts in services were announced at the last possible minute. Mission brooked no
community discussion and offered canned responses to community outcries.
Mission has reneged on major promises to some of these communities (Franklin's
Angel Hospital, Spruce Pine's BRRH, Highlands Hospital.) Mission could be a
case study as a failure in public relations according to Bob Scott, Mayor of
Franklin. It is not only what Mission did, it was how they did it. For first hand
particulars, Bob Scott, Mayor of Franklin, Patrick Taylor, Mayor of Highlands, and
Theresa Coletta, Mayor of Bumsville are a good source. The Mission boards (both
local and central) who were responsible for these decisions have lost the trust of
those communities. Where Mission is concerned, people have learned to watch
what they do, not what they say.

Mission has a reputation problem in its home territory as well. It is telling that
when Mission challenged Blue Cross Blue Shield late in 2017 over its
reimbursement rates and stopped accepting BCBS insurance, Buncombe County
surveyed its 1400 employees and asked them if they wanted to stay with BCBS or
with Mission. The majority of respondents wanted to stay with BCBS not
Mission. * It doesn't take much digging to discover there is a great deal of distrust
on the part of Buncombe County residents toward Mission's leadership. Our
community has tolerated Mission's behavior ("bully" is a frequent descriptor)
because we received an acceptable quality of care. This may explain why the
apparent general apathy regarding the sale of Mission to HCA. Comments such as
"Mission has been a for profit system for years" are not uncommon. Dr. Paulus, in
speaking in early May to a group of 20 or so non-profits, said that Mission had the

2 IP a g e
financial wherewithal to continue on its present path for 20 years, but when the
BCBS matter arose, "we found out what the community really thought of us" and
decided it was time to sell.* As was pointed out by the Mary Black Foundation
speaker at the CO AH Forum on August 3, a Foundation needs reputational
capital in order to carry out its work. Mission's reputational capital deficiency in
the communities it serves clearly creates a serious handicap for Dogwood
accomplishing anything of substance much less "transformational work" in these
same communities.

Second is the issue of board member qualiiications. Dr. Paulus and his team had
already chosen the focus of the foundation as "social determinants of health"
(SDOH). See Mission's Facebook Live #2 by Dr. Paulus and associates. Many
scholarly papers, including an expert cited by Dr. Paulus (Dr. Doug Easterling),
talk about the disconnect between serving as a board member for an acute care
facility with a hierarchical structure, as contrasted to serving on a philanthropic
entity that must accomplish nothing less than changing a population's behavior if it
is to succeed.

What makes a conversion foundation successful is well understood through years


of experience and study. In addressing SDOH issues, the conversion foundation's
leaders must be adaptive in nature to successfully identify what is possible, and to
create or work with grass roots nonprofits to achieve those goals. (Easterling article
attached). It is hard work and requires a "culture of learning" as Frances Sheehan, a
17 year veteran CEO of two large conversion foundations in Pennsylvania, will tell
you, adding that "the kiss of death is the know it all board member" noting that
physicians can be particularly prone to such attitudes. The root problems leading
to poor health outcomes are complex, entrenched and can suck up massive
amounts of cash without changing behavior one jot. One has only to look at the
Eastern Band of Cherokee Indians and the acute health challenges they face despite
access to tribal funds from casino earnings. "Money is necessary but not sufficient,
and there is never enough money" (Karl Stauber). To make headway in this area
requires a completely different skill set. The successful Board must be diverse in
terms of gender, color and include those from privilege as well as those suspicious
of privilege (Karl Stauber), and have meaningful connections to the populations of
the target communities. We know that to to effectively identify and tackle such
challenges, there must be enough depth of diversity to empower the "minorities".
The nucleus of this Board lacks diversity and it is highly unlikely that it will select
additional members who will challenge its dominance. Fact: of the 6 Asheville

3 IP a g e
based Trustees named to Dogwood Trust, 5 live in the same zip code in Asheville
in or adjoining ultra wealthy Biltmore Forest (as does Dr. Paulus), and Janice
Brumit, Board Chair, lives in an adjoining zip in a 12,046 square foot home.
Unfortunately this makes the Dogwood Health Trust Board looks like an old boy
Millionaires Club.

Third is the grantmaking role of the Foundation which puts it squarely in a


position to benefit the executives who continue to run HCA owned Mission.
Mission management gave many talks to community groups about the sale and
they were particularly enthusiastic about the benefit to the community of the new
foundation. More specifically, in early May of 2018 Paulus gave a talk to about 20
directors of local nonprofits in Buncombe County and promised that their
organizations would be big winners if the sale to HCA went through. It seems that
Dr. Paulus and his team had already chosen the focus of the foundation and had
determined that it would be giving money to these organizations. Although this
may strike someone who is not part of the Mission team as preempting the
authority of the Board of the new Foundation, Dr. Paulus apparently was confident
that he could speak for the Foundation. As we later learned, by that time the
Mission Board had tapped his longtime friend Janice Brumit to chair the
Foundation (Brumit personally incorporated the foundation on May 16, 2018). The
relationship between Brumit and Paulus clearly runs deep. See Mission Health
newsroom clipping (attached) where Dr. Paulus states "[Brumit's] support,
friendship and mentorship has [sic] been absolutely essential to me as CEO. I came
here largely because of her".

Social Determinants of Health are the upstream factors that play the major role
(70% or more) in determining health care outcomes of the residents of a
community. SDOHs include such as factors as employment, education,
transportation, nutrition, community and personal safety -all unrelated to the
availability or quality of healthcare services. However, we Icnow that Mission
states that direct health care services may be provided by the Foundation. See their
website Q&A, There is nothing in the Foundation's organizational documents that
restricts them from offering direct services. Moreover, many local nonprofit
organizations that provide direct health care also offer SDOH assistance, and it
would be easy to steer Foundation money toward providing health care services
offloaded from HCA, even if the dollars were said to be for SDOH. For example,
the Appalachian Mountain Community Health Centers (AMCHC) Board of
Directors has been told by Mission executives that their primary care clinics can

4 IP a g e
receive money from the Foundation. AMCHC is one of many Federal Qualified
Health Clinics- FQHC- in WNC, funded by federal dollars and eligible for much
higher reimbursement rates for Medicaid patients than other providers. The Sales
contract makes it explicit that the Foundation will provide direct health care
services through a for-profit entity. See "Physician or Dental Clinic" definition p.
22 and (b) p. 97. It appears that this is setting up the support by Foundation of the
FQHC mentioned above. What has not been made public is that HCA reportedly
has refused to buy the 24 Primary Care physician practices owned by Mission (as
of late August), but will buy the lucrative specialty practices. This means that the
primary care offered by 24 Mission owned physician practices which serve a
"critical need in WNC" according to Dr. Paulus (a fact beyond dispute), will now
be thrown into limbo, and reportedly subject to a questionable scheme to lease the
practices/doctors' services to its "friendly" FQHC, Appalachian Mountain Health
Clinic, using the Foundation's money. (This information is based on a
conversation from late July*). This is a complicated and highly sensitive issue
involving federal law and one on which Mission has been working for many
months. Only the AG is in a position to get to the bottom of this issue.

It is important to note that Mission was instrumental in creating AMCHC,


apparently in order to push much of the care it was providing to uninsured and
Medicaid recipients to the AMCHC clinics. (News articles attached). AMHC did
not meet the criteria for FQHC eligibility and it created a firestorm of controversy
among the legitimate FQHCs who treat almost 50% uninsured patients, as
compared to AMHC which has only a 18% uninsured patient base.** Mission
gamed the system to improve its financial results and there is no reason to think
this behavior will not continue or intensify under HCA ownership, to the
community and the Foundation's ultimate detriment.

Fourth, and most critical is the Foundation's role in enforcing the agreement
between Mission and HCA. Here it is imperative that the Trust be truly
independent of both HCA and Mission - not independent in name only.

The recent announcement of the sales agreement affirmed that Mission executives
will continue to run the system under the Mission brand as a division of HCA. It is
darming that the role of enforcer is contractually restricted to a Foundation which
is so closely aligned with the entity it is supposed to monitor, making any contract
guarantees by HCA illusory. The prospect of HCA violating the asset purchase
agreement must be given serious consideration given their past performance. If the

5 IP a e e
Board is to effectively enforce the Agreement they must have the interest of the
communities as their only priority, unsullied by any allegiance to Mission/HCA.
And the Board must have the appropriate tools to discourage nonperformance and
to enforce the contract provisions against HCA or its successors in interest. Once
the initial sale of Mission to a for profit is consummated, there are no further
barriers to subsequent ownership of this hospital system by hedge funds or any
other entity. The community is left exposed and vulnerable if HCA decides its
foray into NC was a mistake.

We know from other conversion foundations' experience that former hospital


board members on the conversion board are psychologically invested in justifying
their decision (particularly to sell to this particular entity) which impairs their
ability to monitor the performance of the new entity, still being managed by their
friends and former associates. They tend to rationalize the bad acts of the converted
hospital, rather than zealously defend the interests of community. (Sheehan,
Delaware Community Foundation, Brandywine Foundation).

Moreover, it strains credulity to think that when the executives of HCA/Mission


need a favor, the Board of the Foundation will turn a deaf ear. The likelihood of
this being brought to the public's attention is almost nil if the Board is controlled
by Mission. Even one or two persuasive Board members can create the benefit that
Mission/HCA seeks without detection of the intended benefit to HCA. The
enforcement agencies (AG and IRS) have no entryway to become involved unless
actions become public through whistle blowers. By the time the problems become
public the damage is done.

These problems can be avoided by eliminating the risk factor of a Mission


influenced or controlled Board. The Board must be cornposed of the best
candidates for the job (for example, by using the Raleigh consultants used by
Danville Regional Foundation and community advisory committees) and its
governance must incorporate the best practices in the industry in terms of
succession and staffing. Most importantly it must be truly independent and free of
any connection with Mission. The ties that bind Mission and Dogwood mean that
there will never be any assurance that there are not ulterior motives behind any
Dogwood activity.

6 I P a ii e
*Reliable Source. Given the outsized influence Mission wields in these
communities based on the amount of funding it controls, it is understandable that
almost no organization with expectations of continued or new support wants to go
on record as not being in favor of Mission's position on both the sale and the
Foundation. Mission management has assiduously worked to link the HCA
purchase to the benefits that such community organizations will receive, most
notably the $15 million carrot to the local hospital foundations. Mission has also
pressured many into writing letters of support for the transaction and foundation.
Moreover, the publicized SDOH focus ensures that nearly every social, legal,
environmental and justice oriented charity as well as all of the community
foundations in these areas are conceivable beneficiaries, it has effectively stopped
any meaningful public discussion of the issues among those who hope to be a
recipient.

**See CarolinaPublicPress.org : new-wnc-health-center-group-raises-questions

Contact Information for Sources Mentioned;

Theresa Coletta, Bumsville mavor@townofburnsville.org (828) 682-2420

Bob Scott, Franklin scoopscott@aol.com (828) 524-2516

Patrick Taylor, Highlands mavor@highlandsnc.org (828) 526-9431

Dr. Doug Easterling dveaster@wakehealth.edu (336) 716-7554

Frances Sheehan, President, Delaware County Foundation, former CEO of


Brandywine Foundation, Pennsylvania
fsheehan@delcofoundation.org (610)744-1011

Karl Stauber, President, Danville Regional Foundation, Danville VA


kstauber@drfonline.org (434)799-2176

Mission Facebook Live


https://www.facebook.com/MissionHealthNC/vicleos/213270625674391

71 P a lie
Attachment 2

SEARCH Position Paper on Conflicts of Interest within the


Proposed Dogwood Health Trust Board
SEARCH Position Paper on Conflicts of Interest
within the Proposed Dogwood Health Trust Board m S u s t a i n i n g Essential A n d
Rural C o m m u n i t y H e a l t h c a r e

This document, which supplements SEARCH'S earlier issue brief on the Mission-HCA sale,
explores in greater detail why it is deeply problematic - and arguably a conflict of interest as
defined in the law of corporations - for persons currently or formerly affiliated with Mission
Health to sit on the Dogwood Health Trust board.

Most discussion of the trust has focused on its grantmaking role. But equally important is its role
in enforcing the agreement between Mission and HCA. It is imperative in both contexts that the
trust be truly independent of both HCA and Mission - not independent in name only.

These concerns would exist even if Mission's leaders and the Mission name were no longer to be
a part of the system. But that is not the case. The recent announcement of the final sales
agreement affirmed, as indicated earUer, that Mission executives will continue to run the system
under the Mission brand as a division of HCA.

In fact, Mission has consistently downplayed the fact that it is being sold, using words like
"partner" and "affiliate" to describe what is, in fact, an outright sale. The message seems to be:
"Don't worry, we'll still be here, and you won't notice any change." Mission's press release of •
Aug. 31 formulates it thus: "Mission Health will continue to be managed locally ... "

How much autonomy Mission's executives will have in operating their division is wholly
unclear. It is presumably spelled out between the parties and is (or will be) known to the
Attorney General. But it has not been shared with the public. Logic suggests, though, that
Mission's leaders would not be eager to stay if they were deprived of substantial decision-
making authority going forward.

Consumers Union and Community Catalyst are at the forefront of analyzing the pitfalls inherent
in nonprofit hospital conversions. According to their research, nothing is more critical to the
effectiveness of the successor foundation than the makeup of its initial board:

To deliver the maximum benefit to its community, the new health foundation must act
impartially, and it must be viewed from the outset as making decisions fairly and without
bias. It is essential that the foundation not carry obligations to provide or fund services
that should be delivered by the successor corporation. It must not favor (or disfavor)
providers or other commimity partners on the basis of their alignment with, or
competition with, the converting nonprofit or its successor.

It is for these reasons - together with the need to assemble the right mix of skills and
background - that the board of the converting nonprofit should not be carried forward to
become the board of the new foundation. Once the plaiming process has identified criteria
and priorities for board recruitment, some members of the board of the converting
nonprofit may be considered, together with other candidates, for board seats. However,
they should not receive priority consideration, and no seat on the goveming board,
contract or staff role with the foundation should be committed in advance to an executive
or board member of the nonprofit that is the source of the endowment.

Consider the chasm between that ideal and the actions of Mission Health. Even as the sale was
being hammered out. Mission quietly (one might say surreptitiously) went about creating a
successor foundation dominated by Mission board members. Only one of the nine armounced
members has not served on the board of the system or a component institution. Three are current
Mission board members, three are past board presidents and two have served on the boards of
individual Mission hospitals.

Most were appointed in May, three months before the sale agreement was finalized and long
before Mission announced formation of the trust or put out a call for nominations from the
public. Although current system chair John Ball acknowledged in early August that six members
had been named and three were pending, he suggested that only three - not eight - had ties to
Mission. {And he concealed the fact that he himself is among the appointees).

Shortly before that, Ms. Brumit had intimated to a reporter that board members other than herself
would be chosen only after criteria were finalized. That pattern of misdirection, if not duplicity,
perfectly exemplifies the fashion in which Mission has created the successor foundation. It
would be hard to design a process calculated to inspire less trust.

Meanwhile, even as Mission was creating Dogwood in secret, CEO Ron Paulus was trying to
buy support for the HCA sale by quietly promising various local nonprofits that they would
receive money from the trust. In the same vein, the Mission board armounced that, if the sale
goes through, the individual foundations attached to Mission's hospitals will receive grants of as
much as $15 million each.

What clearer signal can Mission - soon to be a part of HCA - send? Mission considers the trust
its to run and the trust's money its to give away. And Mission's leaders have no scruples about
committing that money to endeavors that may or may not support the trust's long-term strategic
aims but transparently support Mission's short-term corporate aims.

A graphic included - perhaps inadvertently - on the missionhealthforward.org website plainly ,


says as much; The successor foundation will be "established snd govemed" by the Mission board
(emphasis added). (See Appendix A.) •

Mission has even branded the trust as an offshoot of Mission. The DHT logo, as it appears on the
trust's website, is identical to Mission's, right down to the font. (See Appendix B.) That may
appear trivial, but there is no more potent expression of a corporation's identity than its logo.

The conclusion is inescapable: If the trust is a creature of Mission, and Mission is a


creature of HCA, the trust will not be independent of HCA. The implications for grant
making are alarming, but not nearly as alarming as the implications for oversight.

In fact, what Mission is pursuing with almost indecent haste is a situation in which a trust
strongly dominated by Mission board members is responsible for enforcing compliance by
a team of executives with whom they have made common cause for years (and in many
cases, decades). In plain English, that doesn't pass the smell test.

Recent case law is instructive on this point. In 2016 the Supreme Court of Delaware found in
Sandys v. Pincus that, using a reasonable doubt standard, "an extremely close, personal bond"
between a corporate director and a corporate executive "created an inference that [the director]
cannot act independently of [the executive]."

The court's majority specifically found that the inference of a conflict "does not require a
plaintiff to plead a detailed calendar of social interaction to prove that directors have a very
substantial personal relationship rendering them unable to act independently of each other." In
that case, the "bond" was inferred from joint ownership of a private airplane - a far less
psychologically and emotionally fraught relationship than ones forged in steering a nonprofit
healthcare system through perilous times.

In effect, Mission's executives and directors have served in the trenches of a bloody war of
attrition, fighting the good fight together against all the vagaries of a collapsing health care
marketplace. It would take almost superhuman detachment for the Mission-Dogwood contingent
to cry foul on their Mission-HCA comrades.

It is worth noting, too, that for the Mission-Dogwood board members to charge Mission-HCA
with noncompliance would also be to concede that they themselves had exercised poor
judgement in approving the sale.

Consider the contrast with the Health Care Foundation of Greater Kansas City, created by
Missouri Attorney General Jay Nixon when HCA bought Health Midwest in 2003. Nixon
himself, acting on no more explicit authority than that conferred in North Carolina law,
appointed the foundation's first board. It encompassed people from the medical, social service,
business, union, government, financial and religious realms. Most importantly, it included no one
associated with Health Midwest - a guarantee that it would be truly independent.

If the current appointments are allowed to stand, an aura of insider dealing will linger over the
foundation, breeding public distrust toward an endeavor for which public trust is essential. It is a
truism of conflict-of-interest theory that the appearance of conflict can be as deadly as the reality.
This venture is too vital to the future health of Western North Carolina to be tainted from the
start by both real and perceived conflicts.

The Attorney General's mandate to ensure that the sale of Mission Health is in the public interest
demands nothing less than rejection of the board proposed by Mission. To repeat: eight of the
nine proposed members are individuals who should be barred. There exists a reasonable
inference that they cannot act independently to enforce the terms of the sales agreement.

To fulfill his duty to ensure the board's independence, the AG need not invent a wheel.
Precedents established by other attorneys general (in some instances, without the benefit of
explicit statutory authority) point to mechanisms for creating a board that is qualified,
independent and truly representative of the public whose interests the AG is sworn to protect.
(See Appendix C.)

Appendix A

How is the New Foundation Created?


Mis.^^ion Health System EStt>IiHcfd t:>y ancl cjovornFd
fw1ii5i«or> HeaJrfn Boi^rd
NOT cc>ntroHc-d or intJucncoc
by HCA

Successor
Foundation

Excerptedfrommissionhealthforward.org

Appendix B

fit CdOuickCoie T' Ftid a D&cloi i Porul


T 7 MISSION MHAI.TH SfKVXCS Ir TBtjRiMf DOGWOOD
HEALTH TRUST

No Matter W h e r e Life
takes
Ye>y L, &%^«r Mission
Waleotm.teiitwIiJi
T n n t Sw^auxiiac
MaanonHeafi^
I J
r'
Mission homepage (screen shot taken 8/15/18) DTH homepage (screen shot taken 8/15/18)
Appendix C

Here, for purposes of comparison, are the applicable sections of laws goveming the disposition
of nonprofit assets in North Carolina and other selected states as well as notes on how attorneys
general of those states interpreted the law.

North Carolina

What the law says: § 55A-12-02. Sale of assets other than in regular course of activities,
(g) A charitable or religious corporation shall give written notice to the Attorney General
days before it sells, leases, exchanges, or otherwise disposes of all, or a majority of, its
property if the transaction is not in the usual and regular course of its activities unless the
Attorney General has given the corporation a written waiver of this subsection. This
notice shall include all the information the Attorney General determines is required for a
complete review of the proposed transaction. The Attorney General may require an
additional 30-day period to review the proposed transaction by providing written notice
to the charitable or religious corporation prior to the expiration of the initial notice
period. During this 30-day period, the transaction may not be finalized.

§ 55A-13-02. Authorized distributions.


(1) A corporation may make distributions to any entity that is exempt under section
501(c)(3) of the Internal Revenue Code of 1986 or any successor section, or that is
organized exclusively for one or more of the piuposes specified in section 501(c)(3) of
the Internal Revenue Code of 1986 or any successor section and that upon dissolution
shall distribute its assets to a charitable or religious corporation, the United States, a state
or an entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986
or any successor section.

Missouri

What the law says: 355.676. Dissolution of public benefit corporation. 1. A public
benefit corporation shall give the attorney general written notice that it intends to dissolve
at or before the time it delivers articles of dissolution to the secretary of state. The notice
shall include a copy or summary of the plan of dissolution. 2. No assets shaU be
transferred or conveyed by a public benefit corporation as part of the dissolution process
until twenty days after it has given the written notice required by subsection 1 of this
section to the attorney general or until the attorney general has consented in writing to or
indicated in writing that he will take no action in respect to, the transfer or conveyance,
whichever is earlier.

355.691. Effect of dissolution. (6) If the corporation is a public benefit corporation, and
no provision has been made in its articles or bylaws for distribution of assets on
dissolution, transferring, subject to any contractual or legal requirement, its assets
exclusively for one or more purposes described in section 501(c)(3) of the Internal
Revenue Code; or if the dissolved corporation is not described in section 501(c)(3) of the
Internal Revenue Code, to one or more public benefit corporations, including a foreign
corporation that would qualify under this chapter as a public benefit corporation;

The AG's interpretation: In 2003, when Health Midwest was bought by HCA, Attorney
General Jay Nixon oversaw creation of the Health Care Foundation of Greater Kansas
City and personally appointed the initial board. No one associated with Health Midwest
was named to the board.

Kentucky

What the law says: 273.323 Notification to Attorney General. The Secretary of State, on
or before the last day of December of each year, may certify to the Attorney General the
names of all corporations which have given cause for dissolution as provided in KRS
273.161 to 273.390, together with the facts pertinent thereto. Whenever the Secretary of
State shall certify the name of a corporation to the Attorney General as having given any
cause for dissolution, the Secretary of State shall concurrently mail to the corporation at
its registered office a notice that such certification has been made. Upon the receipt of
such certification, the Attorney General may file an action in the name of the state against
such corporation for its dissolution.

The AG's interpretation: To create a successor foundation to Kentucky Blue Cross


Blue Shield, the Attorney General formed a Planning Committee of consumers, health
care advocates, health care professionals, and academics. The committee drafted a
mission statement, articles of incorporation, and by-laws. In addition, the Committee
recommended a process for choosing members of the first board of the foundation that
was deliberate, open, and accessible to health care consumers and the broader public.

Massachusetts

What the law says: Ch. 180, 8A (d) (1) A nonprofit acute-care hospital, as defined in
section 25B of chapter 111, or a nonprofit health maintenance organization as defined in
chapter 176G shall give written notice of not less than 90 days to the attorney general and
to the commissioner of public health if such notice concerns a nonprofit health
maintenance organization, before it enters into a sale, lease, exchange, or other
disposition of a substantial amount of its assets or operations with a person or entity other
than a public charity. No such notice shall be required if a written waiver of such notice is
executed by the attorney general. ...

(4) If a charitable fund results from the transaction, and if the nonprofit entity making the
disposition does not continue its operation of a nonprofit hospital or nonprofit health
maintenance organization, the governance of the charitable fund shall be subject to
review by the attorney general and approval by the court. The governance of the
charitable fund shall be broadly based in the community historically served by the
predecessor nonprofit acute care hospital or health maintenance organization and shall be
independent of the new for-profit entity. The attomey general shall conduct a public
hearing in connection with his review of the plan for the governance of the resulting
charitable fund. An appropriate portion of any resulting proceeds shall, if determined to
be necessary by the attorney general, be used for assistance in the development of a
community-based plan for the use of the resulting charitable fund.

The AG's interpretation: The governance of the fund must be broadly based in the
community. This means that the board members of the Institution [the nonprofit hospital]
may not be the board members of the successor charitable fund.

(Excerpted from the Attorney General's Guidelines for Transfers of Nonprofit Acute
Care Hospitals and HMOs. The definition of "Institution" occurs in this passage:
"Transactions involving nonprofit acute-care hospitals and nonprofit HMO's (each, an
'Institution,' and collectively, 'Institutions') are subject to specific procedviral
requirements ...")
Attachments

An Open Letter to Dogwood Health Trust a n d Dr. Ron Paulus


An O p e n Letter to Dogwood Health Trust and Dr. Ron P a u l u s :

T h e formation of t h e Dogwood Health Trust (DHT) p r e s e n t s a o n c e - i n - m a n y - g e n e r a t i o n s


opportunity for W N C .

W e , the u n d e r s i g n e d organizations, s u p p o r t DHT's boldly s t a t e d intent "to reflect the population,


g e n d e r and ethnic distribution of t h e service a r e a " — a n d w e a p p e a l to DHT fulfill that objective
by forming a board that authentically e m b o d i e s WNC.

At this key time in the d e v e l o p m e n t of the DHT board of directors, w e note that although DHT's
s e r v i c e a r e a is 52 p e r c e n t f e m a l e , its n a m e d T r u s t e e s a r e only 2 2 p e r c e n t f e m a l e . While
B u n c o m b e County h a s a 10 p e r c e n t non-white population, n o n e of the n a m e d B u n c o m b e
County T r u s t e e s a r e non-white. With o n e exception, t h e E a s t a n d W e s t r e g i o n s to be s e r v e d by
DHT also are not yet reflective of d e m o g r a p h i c s found in t h o s e c o u n t i e s .

It t a k e s m a n y p e r s p e c t i v e s to find the solutions to i m b e d d e d societal c h a l l e n g e s . While m a n y


m a y s e e points of division in the region, w e believe that DHT h a s a unique opportunity to
t r a n s c e n d s e p a r a t i o n s of g e o g r a p h y , population density, race, ethnicity, a n d g e n d e r . As o n e of
t h e largest per-capita f o u n d a t i o n s in the country, DHT can s e t t h e s t a g e for truly transformative
worl< by creating a diverse board that brings t o g e t h e r - and s h a r e s decision-making power
a m o n g - r e p r e s e n t a t i o n from all of t h e voices of our region.

This is bold work, and w e urge DHT to b e c o u r a g e o u s and t r a n s p a r e n t a s it c o n t i n u e s its


selection p r o c e s s . B e c a u s e w e s h a r e DHT's resolve, w e offer t h e collective wisdom and
e x p e r i e n c e s of our organizations a s a r e s o u r c e to a s s i s t in u n d e r s t a n d i n g how to b e s t build a
board that both r e p r e s e n t s and truly g r a s p s the c h a l l e n g e s and opportunities that exist in all
c o r n e r s of our region.

By creating a foundation board that reflects the populations DHT w a s c r e a t e d to s e r v e , DHT will
b e better a b l e to a c h i e v e its mission to dramatically improve the health a n d wellbeing of all
p e o p l e a n d c o m m u n i t i e s in W e s t e r n North Carolina.

Sincerely,
Carmen Ramos-Kennedy, President
Ashevilfe B u n c o m b e County NAACP
With:
American Association of University W o m e n - Asheville Branch
ACLU W e s t e r n North Carolina C h a p t e r
Asheville B u n c o m b e Institute of Parity A c h i e v e m e n t
Children First/Communities in S c h o o l s
Carolina J e w s for J u s t i c e / W e s t (
Christians for a United Community
Coming to the Table
Elders Fierce for J u s t i c e
YWCA of Asheville a n d W N C
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 S"19-716.6050
WWW.NCDOJ.GOV

November 27, 2018

Ms. Alice Salthouse


Chief Executive Officer
High Country Community Health Center
108 Doctors Drive
Boone, NC 28607

Dear Ms. Salthouse;

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Smcerely,

Josh Stein
Attomey General of North Carolina

JS/tms
From: notification@prs01hcrmps01.ic.local
Sent: W e d n e s d a y , N o v e m b e r 14, 2 0 1 8 8:45 AM
To: Consumer
Subject: HCA/Mission M e r g e r
Attachments: HealthCenters_LetterReMissionAcquisition.pdf

Notes
Received on 11-1-18.1 may have sent this already yesterday. Thanks!!! Karen

Contact
No Name
bhall@feldesmantucker.com

Message
Good afternoon,

I hope you are well.

Thank you for returning my call yesterday. I am re-forwarding the email.

I'm sorry for the follow-up and bothering you with your busy schedule. When Carrie originally sent the email,
she received a notification that it may have not been delivered, so we wanted to confirm that you received it.

Can you please confirm receipt of this email?

I am looking forward to hearing from you!

Thank you,

Brittney Hall
Legal Assistant
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information from the law firm of
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From: Riley, Carrie Bill


Sent: Friday, October 26, 2018 4:10 PM
To: 'jharrod@nc.doj.gov' <jharrod@nc.doj.gov>; 'ncago@nc.doj.gov' <ncago@nc.doj.gov>
Subject: Letter from Western NC Health Centers Re HCA/Mission Merger

Good afternoon,

My name is Carrie Riley and I am an attorney submitting the attached on behalf of the organizations named in
the letter.

As requested in the attached, we propose coordinating a call to discuss the matter further. Your time and review
is much appreciated.

Sincerely,
Carrie

Carrie Bill Riley


Partner
Feldesman Tucker Leifer Fidell LLP
1129 20th Street, NW, Suite 400
Washington, DC 20036
T. 202.466.8960
F. 202.293.8103

www.ftlf.com

[FELDESMAN + TUCKER + LEIFER + FIDELL]

CONFIDENTIALITY NOTICE: This e-mail and any attachments contain information fi-om the law firm of
Feldesman Tucker Leifer Fidell LLP and are intended solely for the use of the named recipient(s). This e-mail
may contain privileged attorney-client communications or work product. Any dissemination by anyone other
than an intended recipient is prohibited. If you are not a named recipient, you are prohibited from any further
viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you have
received this e-mail in error, notify criley@Feldesmantucker.com immediately and delete the e-mail, any
attachments, and all copies from any drives or storage media and destroy any printouts.
October 26, 2018

Josh Stein, Attorney General


Attorney General's Office
9 0 0 1 Mail Service Center
Raleigh, NC 27699-9001

Dear Mr. Stein:

We are writing t o you on behalf of Blue Ridge Community Health Services, High Country
Community Health, Western North Carolina Community Health Services, and Bakersville Community
Health Center, each of which is located in western North Carolina and is a federally qualified health
center (FQHC). Our organizations have a long history of providing care for t h e most vulnerable
populations in our region, with a particular focus on serving low-income, uninsured, agricultural
workers, and homeless persons.

On average, our organizations have been operating as FQHCs for over 25 years, and each of our
organizations has been designated as a patient centered medical h o m e by t h e Joint Commission or t h e
National Committee for Quality Assurance (NCQA). In addition t o being recognized for our provision of
high quality primary care, our organizations have a history of working collaboratively with o t h e r human
service organizations t o improve t h e health and well-being of t h o s e living and working in t h e
communities w e serve.

As FQHCs receiving grants or look-alike designation from t h e Health Resources and Services
Administration (HRSA) within t h e Department of Health and Human Services (DHHS), w e are statutorily
obligated t o furnish a broad range of primary and preventive health services, including outreach, and t o
assure t h a t no patient will be denied health care services d u e t o an individual's inability t o pay for such
services. W e also offer a broad range of behavioral health services, including substance abuse and
t r e a t m e n t services. Together, w e provide care for over 60,000 low-income adults and children (<200%
Federal Poverty Level), with over 20,000 living in poverty (<100% Federal Poverty Level). Over 30,000
uninsured individuals rely on our health centers for their care. We are committed t o continuing t o serve
as t h e primary safety net providers for western North Carolina and take pride in our ability to work
cooperatively in t h e best interests of t h e patients we serve.

It is in t h a t spirit t h a t w e write this letter t o express our significant concerns about for-profit
HCA Healthcare's potential acquisition of Mission Health. Specifically, w e are concerned t h a t t h e
proceeds resulting from that sale will not be allocated equitably, supporting t h e established safety net
providers in t h e region and benefitting t h e residents of w e s t e r n North Carolina. Rather, as described
below, we anticipate t h a t t h e proceeds will be allocated in a m a n n e r t h a t f u r t h e r s t h e interests of HCA,
Mission, and Mission's partners. In addition, w e believe t h a t Mission and HCA intend t o transfer most, if
not all, of t h e t w e n t y Mission Medical Associates (MMA) outpatient primary care clinics t o an existing
FQHC t h a t maintains close ties with Mission, as described below. This transfer would significantly
increase Medicaid costs in w e s t e r n North Carolina, without achieving any meaningful expansion of
service t o medically underserved populations or quality improvement.
1
While t h e creation of a $1.5 billion Foundation could p r e s e n t a rare o p p o r t u n i t y t o e n h a n c e t h e
health and well-being for t h e residents of w e s t e r n North Carolina, it will not d o so if it is i m p l e m e n t e d in
a m a n n e r t h a t is d e c e p t i v e and only f u r t h e r s Mission and HCA's Interests. In this letter w e explain o u r
public i n t e r e s t c o n c e r n s .

Mission is Integrally Tied w i t h a Single FQHC in the Western North Carolina Region

In 2 0 1 4 Mission, in collaboration M o u n t a i n Area Health Education C e n t e r (MAHEC), established


a n e w c o r p o r a t i o n . M o u n t a i n Area Health C e n t e r nka Appalachian M o u n t a i n C o m m u n i t y Health Center
(AMCHC), t o a s s u m e o p e r a t i o n a l authority over certain MAHEC and Mission o u t p a t i e n t primary care
clinical practices. In 2015, AMCHC applied f o r and w a s a w a r d e d a HRSA grant t o o p e r a t e as a FQHC.
The t r a n s f e r r e d Mission and MAHEC o u t p a t i e n t primary care clinical practices w e r e included as "sites"
within t h e health c e n t e r project. Soon a f t e r AMCHC o b t a i n e d t h e g r a n t a w a r d , w e o b t a i n e d a copy of
t h e AMCHC grant application and f o u n d t h a t it seriously m i s r e p r e s e n t e d n e e d s a s s e s s m e n t d a t a ,
inaccurately described existing primary c a r e practices in t h e c o m m u n i t y , falsely s u g g e s t e d t h a t it
m a i n t a i n e d collaboration a r r a n g e m e n t s with existing FQHCs, and did not properly disclose AMCHC's
relationship with Mission.

FQHC s t a t u s provided AMCHC (and its t r a n s f e r r e d Mission practices) with various benefits, m o s t
notably special r e i m b u r s e m e n t f r o m Medicare and Medicaid based on its actual costs of providing
covered services. The FQHC cost-based r e i m b u r s e m e n t r a t e s w e r e and are considerably higher t h a n t h e
fee-for-service p a y m e n t s c h e d u l e s available t o Mission. Accordingly, t h e t r a n s f e r of t h e primary care
clinical practices resulted in significant cost savings for Mission. Although Mission did not directly
o p e r a t e t h e t r a n s f e r r e d clinics, it retained indirect involvement and influence by a s s u m i n g AMCHC
Board s e a t s and leasing provider capacity t o AMCHC.

W e strongly s u s p e c t t h a t t h e FQHC grant application w a s nothing m o r e t h a n an a t t e m p t t o


c o n v e r t t h e Mission and MAHEC practices t o a FQHC s t r u c t u r e for t h e sole business p u r p o s e of
improving t h e i r respective bottom-lines, w i t h o u t any meaningful increase in access t o a f f o r d a b l e c a r e . 1
While w e c a n n o t confirm t h a t this was t h e intent, w e can only q u e s t i o n w h a t would have m o t i v a t e d
MAHEC and Mission t o p u r s u e establishing a n e w FQHC, r a t h e r t h a n collaborating with t h e existing high
quality s a f e t y - n e t FQHCs t h a t had d e m o n s t r a t e d and d o c u m e n t e d t h e i r desire t o w o r k t o g e t h e r t o
e x p a n d c a r e in t h e region. It is o u r u n d e r s t a n d i n g t h a t since its initial FQHC designation, AMCHC has
b e e n closely scrutinized by HRSA and has had n u m e r o u s findings of non-compliance. In r e s p o n s e t o
such findings, HRSA has imposed several conditions on AMCHC's grant, and has accordingly issued
several s h o r t e n e d project periods. It is i m p o r t a n t t o n o t e t h a t , since its FQHC designation, AMCHC has
not meaningfully e x p a n d e d access t o health c a r e services t o t h e medically u n d e r s e r v e d c o m m u n i t i e s in
w e s t e r n North Carolina, consistent with t h e p u r p o s e s of t h e health c e n t e r project g r a n t . In 2017, only
18% of AMCHC p a t i e n t s w e r e uninsured, and this w a s a decrease f r o m 2016.

It is i m p o r t a n t t o c o n s i d e r t h e historic relationship b e t w e e n Mission and AMCHC w h e n assessing


t h e HCA acquisition and, in particular, t h e role and i n d e p e n d e n c e of t h e Dogwood Health Trust.

1
The Mission Chief Executive Officer, as part of his 2012 Year in Review, s t a t e d publicly t h a t o n e of t h e health
system goals w a s t o "give" FQHC s t a t u s t o MAHEC in o r d e r t o improve t h e financial positions of both organizations
"by millions" (by taking a d v a n t a g e of t h e FQHC r e i m b u r s e m e n t models).
2
The Foundation is Not Independent

IVIission and HCA h a v e indicated t h a t t h e p u r p o s e of t h e newly c r e a t e d Dogwood Health Trust


will be t o "dramatically improve the health and well-being o f all people and communities o f Western
North Carolina." Mission and HCA have f u r t h e r s u g g e s t e d t h a t t h e selection of t h e initial directors will
be c o n d u c t e d t h r o u g h a t r a n s p a r e n t process, p o s t e d on t h e Dogwood Health Trust w e b s i t e , with
r e p r e s e n t a t i o n f r o m across t h e region and s a f e t y net system. However, t h e y have failed t o n o t e t h a t
t h e Dogwood Health Trust will be d o m i n a t e d by Mission board m e m b e r s . Only o n e of t h e nine
a n n o u n c e d m e m b e r s has not served on t h e board of t h e Mission s y s t e m or an affiliate institution. T h r e e
of t h e m e m b e r s are current Mission board m e m b e r s , t h r e e are past board presidents, and t w o have
served on t h e b o a r d s of individual Mission hospitals. Although t h e r e is technically a m e a n s t o n o m i n a t e
individuals via t h e Trust's w e b s i t e , w e have reason t o believe t h a t such m e a n s a r e illusory. For example,
it is o u r u n d e r s t a n d i n g t h a t m o s t of t h e board m e m b e r s w e r e a p p o i n t e d t o t h e Dogwood Health Trust in
May, long b e f o r e Mission a n n o u n c e d t h e f o r m a t i o n of t h e Dogwood Health Trust or put o u t a call for
n o m i n a t i o n s f r o m t h e public. In addition, w e a r e a w a r e of senior executives f r o m w e s t e r n North
Carolina non-profit organizations w h o w e r e n o m i n a t e d t o serve on t h e Dogwood Health Trust, n o n e of
w h o m have b e e n c o n t a c t e d .

The lack of i n d e p e n d e n c e of t h e Dogwood Health Trust is deeply concerning given t h e


Foundation will receive $1.5 billion in p r o c e e d s , with an anticipated $ 7 5 million in a n n u a l s p e n d i n g t o
a d d r e s s t h e social issues affecting t h e health and well-being of residents t h r o u g h o u t Mission's w e s t e r n
North Carolina service area.

W e had an o p p o r t u n i t y t o review t h e enclosed d o c u m e n t s , entitled "Problems with Mission-


Dogwood Structure and Governance," "SEARCH Position Paper on Conflicts o f Interest within the
Proposed Dogwood Health Trust Board," and "An Open Letter to Dogwood Health Trust and Dr. Ron
Paulus," which w e r e recently s e n t t o you. W e s h a r e t h e s a m e d e e p c o n c e r n t h a t t h e Dogwood Health
Trust is a creation of Mission and will not be i n d e p e n d e n t of HCA.

The Foundation Mav Ineauitablv Favor Supporting AMCHC

W e a r e particularly c o n c e r n e d by t h e Dogwood Health Trust's lack of i n d e p e n d e n c e given t h a t


Mission has m a i n t a i n e d close ties with AMCHC. For e x a m p l e . Mission's Executive Director of
Ambulatory Finance currently serves on t h e AMCHC Board of Directors, Mission's Chief O p e r a t i n g
Officer currently s e r v e s as AMCHC's Director of Eastern Operations, and several AMCHC providers a r e
c o n t r a c t e d f r o m Mission Medical Associates.

It a p p e a r s t h a t maintaining links with AMCHC is a key f e a t u r e t o t h e acquisition. Despite t h e


fact t h a t Mission and Dogwood Health Trust leaders routinely s t a t e t h a t t h e Foundation will f o c u s on
social d e t e r m i n a n t s of health, t h e Asset Purchase A g r e e m e n t specifically r e f e r e n c e s t h e Foundation's
and Mission's intent t o maintain a n d / o r establish relationships with FQHCs. For e x a m p l e . Section 7.3(b)
of t h e Asset Purchase A g r e e m e n t n o t e s t h a t t h e "Foundation shall be permitted to establish, organize,
and provide financial support or grants to any federally qualified health center or similar program." in
addition. Section 7.3(f) explicitly r e f e r e n c e s continuation of Mission's "current activities with
Appalachian Mountain Community Health Center." The t e r m "current activities" is v a g u e and u n d e f i n e d .
Although Section 7.3(b) broadly refers t o FQHCs, n o n e of us have b e e n c o n t a c t e d by Mission or
HCA regarding o p p o r t u n i t i e s t o collaborate or t o provide Input. W e s u s p e c t t h a t such language w a s
included t o p r e s e r v e Mission's longstanding s u p p o r t of AMCHC, r a t h e r t h a n t o reflect a c o m m i t m e n t t o
s u p p o r t i n g o u r n e t w o r k of s a f e t y net providers.

AMCHC Will Likely Expand W i t h o u t A Meaningful Increase in Access t o Care

As w e are c o n c e r n e d t h a t t h e Dogwood Health Trust is likely t o inequitably f a v o r s u p p o r t i n g


AMCHC over t h e existing n e t w o r k of FQHCs, o u r g r e a t e r c o n c e r n pertains t o t h e f u t u r e of t h e t w e n t y
MMA o u t p a t i e n t primary c a r e practices, which are located across t h e region, o f t e n directly within o u r
service a r e a s . Specifically, w e have reason t o believe t h a t Mission and HCA intend t o transition
o p e r a t i o n a l authority over such o u t p a t i e n t primary care practices t o AMCHC.

Although n e i t h e r Mission nor HCA have a d d r e s s e d t h e m a t t e r publicly, t h e AMCHC Board Chair


has s t a t e d t o a local a t t o r n e y t h a t AMCHC is likely t o e x p a n d t o include t h e MMA o u t p a t i e n t primary
care practices as a result of t h e acquisition. He has also a t t e n d e d o v e r 10 planning m e e t i n g s with
Mission's senior m a n a g e m e n t t e a m . To d a t e , n o n e of us h a v e b e e n consulted by Mission or HCA
regarding t h e acquisition, let a l o n e b e e n included in key planning m e e t i n g s . Additionally, as m e n t i o n e d
a b o v e , t h e MMA Chief Operating Officer was recently c o n t r a c t e d t o s e r v e as t h e AMCHC Director of
Eastern O p e r a t i o n s . W e s u s p e c t t h a t this position w a s established and s t a f f e d by an MMA
r e p r e s e n t a t i v e t o assist in t h e transition of t h e MMA o u t p a t i e n t primary c a r e practices t o AMCHC.

This s t r a t e g y would e x p a n d AMCHC's reach far across w e s t e r n North Carolina. 2 W e a r e


c o n c e r n e d t h a t t h e expansion is financially m o t i v a t e d r a t h e r t h a n r o o t e d in an i n t e r e s t t o e x p a n d
r e s o u r c e s t o additional uninsured individuals. As n o t e d a b o v e , traditional o u t p a t i e n t primary c a r e
practices in North Carolina receive p a y m e n t p u r s u a n t t o a Medicaid fee-for-service p a y m e n t schedule,
w h e r e a s FQHCs a r e entitled t o a special r e i m b u r s e m e n t b a s e d on t h e i r actual costs of providing services
in recognition of o u r d e e p c o m m i t m e n t (and legal obligation) t o e x t e n d services t o uninsured and
u n d e r i n s u r e d residents of o u r service areas. Although t h e FQHC r a t e varies a m o n g health c e n t e r sites,
w e can a s s u m e t h a t such r e i m b u r s e m e n t will be considerably higher t h a n t h e traditional fee-for-service
p a y m e n t r a t e t h a t MMA currently receives. This would not be so alarming if w e did not have reason t o
believe t h a t t h e site t r a n s f e r s would be "turnkey" transitions, w h e r e t h e o u t p a t i e n t primary c a r e
practices would simply shift t o AMCHC with no t r u e expansion in services and access t o care for
medically u n d e r s e r v e d populations.

In 2012, m a n y s t a t e Medicaid directors, t h r o u g h t h e National Association of Medicaid Directors,


e x p r e s s e d t h e i r significant c o n c e r n s t o CMS and HRSA regarding t h e s e t y p e s of t r a n s a c t i o n s , noting t h a t
while in s o m e cases health c e n t e r and hospital affiliations may increase access t o care, in o t h e r cases
affiliations may only result in g r e a t e r r e i m b u r s e m e n t f o r c u r r e n t access. This is precisely t h e situation
w e are f a c e d with in w e s t e r n North Carolina. If t h e MMA o u t p a t i e n t primary c a r e practices t r a n s f e r t o
AMCHC, w e do not anticipate any service expansion, yet Medicaid costs would significantly increase.
This would be a s t e p backwards as t h e s t a t e works t o w a r d s achieving its quality-driven p a y m e n t reform
goals.

2
N o t e t h a t Section 7.3(b) of t h e Asset Purchase A g r e e m e n t indicates t h a t t h e Foundation may
"establish" or "organize" a n e w FQHC. W e s u s p e c t t h a t such language w a s included t o provide Mission
with an a v e n u e t o transition all or s o m e of t h e MMA o u t p a t i e n t primary c a r e practices t o FQHC s t a t u s in
t h e e v e n t t h a t HRSA rejects t h e addition of such "sites" t o AMCHC's FQHC s c o p e of project.
4
Next Steps

This t r a n s a c t i o n will impact t h e residents of o u r region f o r d e c a d e s t o c o m e . Addressing t h e


a f o r e m e n t i o n e d c o n c e r n s is of p a r a m o u n t i m p o r t a n c e t o p r o t e c t t h e public interest.

W e r e q u e s t t h a t you use your authority as t h e AG t o e n s u r e t h a t t h e Foundation board is truly


i n d e p e n d e n t . W e f u r t h e r r e q u e s t t h a t you require HCA and Mission t o disclose w h e t h e r t h e y intend t o
transition t h e MMA o u t p a t i e n t primary care practices and, if so, how t h e t r a n s f e r s will result in t h e
expansion of access t o care t o u n d e r s e r v e d populations in t h e region. U n d e r any circumstances, t h e
b r o a d e r n e t w o r k of FQHCs in w e s t e r n North Carolina should be involved in discussions regarding next
steps.

W e have e n g a g e d legal counsel f r o m Feldesman Tucker Leifer Fidell LLP, a law firm located in
W a s h i n g t o n , DC t h a t specializes in FQHC-related r e q u i r e m e n t s , t o assist in this m a t t e r . W e p r o p o s e t h a t
you a n d / o r t h e Assistant Attorney General c o o r d i n a t e a call with a t t o r n e y s Jacqueline Leifer and Carrie
Riley t o discuss t h e FQHC c o n s i d e r a t i o n s and o u r c o n c e r n s regarding t h e MMA practices. They can be
r e a c h e d by t e l e p h o n e at (202) 4 6 6 - 8 9 6 0 or by email at jleifer@ftlf.com and criley@ftlf.com.

On behalf of o u r health c e n t e r s , patients, and t h e c o m m u n i t i e s w e serve, t h a n k you f o r your


s u p p o r t and your consideration.

[Signatures on following page]


Sincerely,

Charles Shelton
Chief Executive Officer
Bakersville Community Health C e n t e r

Richard H u d s p e t h , MD
Chief Executive Officer
Blue Ridge Community Health Services

Alice Salthouse
Chief Executive Officer
High Country Community Health C e n t e r

Carlos Gomez
Chief Executive Officer
W e s t e r n NC Community Health Services

Enclosures:
Problems with Mission-Dogwood Structure and Governance
SEARCH Position Paper on Conflicts o f Interest within the Proposed Dogwood Health Trust Board
An Open Letter to Dogwood Health Trust and Dr. Ron Paulus
Attachment 1

Problems with Mission-Dogwood Structure and Governance


MEMORANDUM

October 20, 2018

TO: Josh Stein, Attorney General


Jennifer Harrod, Special Deputy Attorney General

FROM: Carole Spainhour, Attorney, Elder Law Carolina

RE: Mission-Dogwood Structure and Governance

This memorandum is narrowly focused upon why it is a conflict of interest and


otherwise inappropriate for persons currently or formerly affiliated with Mission
Health to serve on the new Foundation board, and why the Board as constituted
cannot be rehabilitated and the process must be begun de novo, including revised
governance structure.

W H A T CAN BE DONE:

Using similar authority as that granted to the Attorney General under NC law, the
AGs in other states have used their powers to ensure that the Health Foundation's
board is truly independent of the management of the selling hospital. Some states
forbid by statute both the buying and selling entities from serving on the Board
because of the conflict of interest issues. There is a substantial risk that the
community will not receive full and fair value for the conversion of Mission
Health's hospitals and ancillary services if the funds are controlled by a foundation
that is linked to HCA/Mission management.

BRIEF STATEMENT OF THE PROBLEM:

The Board lacks the independence and the qualifications necessary to do the job
successfully, and its organizational documents, drawn by Mission Health's
attorneys, do not reflect best practices in Health Foundation board structure.

It is critical to community perception and proper oversight of the Foundation, and


therefore its success, that the Foundation is a new entity without ties to Mission
Health. As now constituted by Mission Health's board, what we have is a re-
organization of the Mission Health board with a new name and a few added
members, but one which is essentially guaranteed to work closely with
HCA/Mission management.

DETAILS O F P R O B L E M S :

First is the history of Mission Health in the Communities. The Mission Board
members, while charged with representing the interests of the communities
Mission serves, have acquiesced to Mission management's acquisition of rural
facilities and gutting their services. To the community's eyes, Mission Health
appears to have prioritized actions calculated to improve their industry ratings
rather than responding to the needs of the community. Before Mission took them
over, local residents poured money, time and care into building and running these
hospitals. Negotiations to purchase the facilities were typically conducted in secret.
Cuts in services were announced at the last possible minute. Mission brooked no
community discussion and offered canned responses to community outcries.
Mission has reneged on major promises to some of these communities (Franklin's
Angel Hospital, Spruce Pine's BRRH, Highlands Hospital.) Mission could be a
case study as a failure in public relations according to Bob Scott, Mayor of
Franklin. It is not only what Mission did, it was how they did it. For first hand
particulars. Bob Scott, Mayor of Franklin, Patrick Taylor, Mayor of Highlands, and
Theresa Coletta, Mayor of Bumsville are a good source. The Mission boards (both
local and central) who were responsible for these decisions have lost the trust of
those communities. Where Mission is concerned, people have learned to watch
what they do, not what they say.

Mission has a reputation problem in its home territory as well. It is telling that
when Mission challenged Blue Cross Blue Shield late in 2017 over its
reimbursement rates and stopped accepting BCBS insurance. Buncombe County
surveyed its 1400 employees and asked them if they wanted to stay with BCBS or
with Mission. T h e majority of respondents wanted to stay with BCBS not
Mission. * It doesn't take much digging to discover there is a great deal of distrust
on the part of Buncombe County residents toward Mission's leadership. Our
community has tolerated Mission's behavior ("bully" is a frequent descriptor)
because we received an acceptable quality of care. This may explain why the
apparent general apathy regarding the sale of Mission to HCA. Comments such as
"Mission has been a for profit system for years" are not uncommon. Dr. Paulus, in
speaking in early May to a group of 20 or so non-profits, said that Mission had the

21 P a g c
financial wherewithal to continue on its present path for 20 years, but when the
BCBS matter arose, "we found out what the community really thought of us" and
decided it was time to sell.* As was pointed out by the Mary Black Foundation
speaker at the COAH Forum on August 3, a Foundation needs reputational
capital in order to carry out its work. Mission's reputational capital deficiency in
the communities it serves clearly creates a serious handicap for Dogwood
accomplishing anything of substance much less "transformational work" in these
same communities.

Second is the issue of board member qualifications. Dr. Paulus and his team had
already chosen the focus of the foundation as "social determinants of health"
(SDOH). See Mission's Facebook Live #2 by Dr. Paulus and associates. Many
scholarly papers, including an expert cited by Dr. Paulus (Dr. Doug Easterling),
talk about the disconnect between serving as a board member for an acute care
facility with a hierarchical structure, as contrasted to serving on a philanthropic
entity that must accomplish nothing less than changing a population's behavior if it
is to succeed.

What makes a conversion foundation successful is well understood through years


of experience and study. In addressing SDOH issues, the conversion foundation's
leaders must be adaptive in nature to successfully identify what is possible, and to
create or work with grass roots nonprofits to achieve those goals. (Easterling article
attached). It is hard work and requires a "culture of learning" as Frances Sheehan, a
17 year veteran CEO of two large conversion foundations in Pennsylvania, will tell
you, adding that "the kiss of death is the know it all board member" noting that
physicians can be particularly prone to such attitudes. The root problems leading
to poor health outcomes are complex, entrenched and can suck up massive
amounts of cash without changing behavior one jot. One has only to look at the
Eastern Band of Cherokee Indians and the acute health challenges they face despite
access to tribal funds from casino earnings. "Money is necessary but not sufficient,
and there is never enough money" (Karl Stauber). To make headway in this area
requires a completely different skill set. The successful Board must be diverse in
terms of gender, color and include those from privilege as well as those suspicious
of privilege (Karl Stauber), and have meaningful connections to the populations of
the target communities. We know that to to effectively identify and tackle such
challenges, there must be enough depth of diversity to empower the "minorities".
The nucleus of this Board lacks diversity and it is highly unlikely that it will select
additional members who will challenge its dominance. Fact: of the 6 Asheville

3 IP a u c
based Trustees named to Dogwood Trust, 5 live in the same zip code in Asheville
in or adjoining ultra wealthy Biltmore Forest (as does Dr. Paulus), and Janice
Brumit, Board Chair, lives in an adjoining zip in a 12,046 square foot home.
Unfortunately this makes the Dogwood Health Trust Board looks like an old boy
Millionaires Club.

Third is the grantmaking role of the Foundation which puts it squarely in a


position to benefit the executives who continue to run H C A owned Mission.
Mission management gave many talks to community groups about the sale and
they were particularly enthusiastic about the benefit to the community of the new
foundation. More specifically, in early May of 2018 Paulus gave a talk to about 20
directors of local nonprofits in Buncombe County and promised that their
organizations would be big winners if the sale to HCA went through. It seems that
Dr. Paulus and his team had already chosen the focus of the foundation and had
determined that it would be giving money to these organizations. Although this
may strike someone who is not part of the Mission team as preempting the
authority of the Board of the new Foundation, Dr. Paulus apparently was confident
that he could speak for the Foundation, As we later learned, by that time the
Mission Board had tapped his longtime friend Janice Brumit to chair the
Foundation (Brumit personally incorporated the foundation on May 16, 2018). The
relationship between Brumit and Paulus clearly runs deep. See Mission Health
newsroom clipping (attached) where Dr. Paulus states "[Brumit's] support,
friendship and mentorship has [sic] been absolutely essential to me as CEO. I came
here largely because of her".

Social Determinants of Health are the upstream factors that play the major role
(70% or more) in determining health care outcomes of the residents of a
community. SDOHs include such as factors as employment, education,
transportation, nutrition, community and personal safety -all unrelated to the
availability or quality of healthcare services. However, we know that Mission
states that direct health care services may be provided by the Foundation. See their
website Q&A. There is nothing in the Foundation's organizational documents that
restricts them from offering direct services. Moreover, many local nonprofit
organizations that provide direct health care also offer SDOH assistance, and it
would be easy to steer Foundation money toward providing health care services
offloaded from HCA, even if the dollars were said to be for SDOH. For example,
the Appalachian Mountain Community Health Centers (AMCHC) Board of
Directors has been told by Mission executives that their primary care clinics can

4 1 I' a g c
receive money from the Foundation. AMCHC is one of many Federal Qualified
Health Clinics- FQHC- in WNC, funded by federal dollars and eligible for much
higher reimbursement rates for Medicaid patients than other providers. The Sales
contract makes it explicit that the Foundation will provide direct health care
services through a for-profit entity. See "Physician or Dental Clinic" definition p.
22 and (b) p. 97. It appears that this is setting up the support by Foundation of the
FQHC mentioned above. What has not been made public is that HCA reportedly
has refused to buy the 24 Primary Care physician practices owned by Mission (as
of late August), but will buy the lucrative specialty practices. This means that the
primary care offered by 24 Mission owned physician practices which serve a
"critical need in WNC" according to Dr. Paulus (a fact beyond dispute), will now
be thrown into limbo, and reportedly subject to a questionable scheme to lease the
practices/doctors' services to its "friendly" FQHC, Appalachian Mountain Health
Clinic, using the Foundation's money. (This information is based on a
conversation from late July*). This is a complicated and highly sensitive issue
involving federal law and one on which Mission has been working for many
months. Only the AG is in a position to get to the bottom of this issue.

It is important to note that Mission was instrumental in creating AMCHC,


apparently in order to push much of the care it was providing to uninsured and
Medicaid recipients to the AMCHC clinics. (News articles attached). AMHC did
not meet the criteria for FQHC eligibility and it created a firestorm of controversy
among the legitimate FQHCs who treat almost 50% uninsured patients, as
compared to AMHC which has only a 18% uninsured patient base.** Mission
gamed the system to improve its financial results and there is no reason to think
this behavior will not continue or intensify under HCA ownership, to the
community and the Foundation's ultimate detriment.

Fourth, and most critical is the Foundation's role in enforcing the agreement
between Mission and HCA. Here it is imperative that the Trust be truly
independent of both HCA and Mission - not independent in name only.

The recent announcement of the sales agreement affirmed that Mission executives
will continue to run the system under the Mission brand as a division of HCA. It is
alarming that the role of enforcer is contractually restricted to a Foundation which
is so closely aligned with the entity it is supposed to monitor, making any contract
guarantees by HCA illusory. The prospect of HCA violating the asset purchase
agreement must be given serious consideration given their past performance. If the

5 I 1' a g c
Board is to effectively enforce the Agreement they must have the interest of the
communities as their only priority, unsullied by any allegiance to Mission/HCA.
And the Board must have the appropriate tools to discourage nonperformance and
to enforce the contract provisions against HCA or its successors in interest. Once
the initial sale of Mission to a for profit is consummated, there are no further
barriers to subsequent ownership of this hospital system by hedge funds or any
other entity. The community is left exposed and vulnerable if HCA decides its
foray into NC was a mistake.

We know from other conversion foundations' experience that former hospital


board members on the conversion board are psychologically invested in justifying
their decision (particularly to sell to this particular entity) which impairs their
ability to monitor the performance of the new entity, still being managed by their
friends and former associates. They tend to rationalize the bad acts of the converted
hospital, rather than zealously defend the interests of community. (Sheehan,
Delaware Community Foundation, Brandywine Foundation).

Moreover, it strains credulity to think that when the executives of HCA/Mission


need a favor, the Board of the Foundation will turn a deaf ear. The likelihood of
this being brought to the public's attention is almost nil if the Board is controlled
by Mission. Even one or two persuasive Board members can create the benefit that
Mission/HCA seeks without detection of the intended benefit to HCA. The
enforcement agencies (AG and IRS) have no entryway to become involved unless
actions become public through whistle blowers. By the time the problems become
public the damage is done.

These problems can be avoided by eliminating the risk factor of a Mission


influenced or controlled Board. The Board must be composed of the best
candidates for the job (for example, by using the Raleigh consultants used by
Danville Regional Foundation and community advisory committees) and its
governance must incorporate the best practices in the industry in terms of
succession and staffing. Most importantly it must be truly independent and free of
any connection with Mission. The ties that bind Mission and Dogwood mean that
there will never be any assurance that there are not ulterior motives behind any
Dogwood activity.

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Attachment 2

SEARCH Position Paper on Conflicts of Interest within the


Proposed Dogwood Health Trust Board
S u s t a i n i n g Essential And
Rural C o m m u n i t y H e a l t h c a r e

SEARCH Position Paper on Conflicts of Interest


within the Proposed Dogwood Health Trust Board

This document, which supplements SEARCH'S earlier issue brief on the Mission-HCA sale,
explores in greater detail why it is deeply problematic - and arguably a conflict of interest as
defined in the law of corporations - for persons currently or formerly affiliated with Mission
Health to sit on the Dogwood Health Trust board.

Most discussion of the trust has focused on its grantmaking role. But equally important is its role
in enforcing the agreement between Mission and HCA. It is imperative in both contexts that the
trust be truly independent of both HCA and Mission - not independent in name only.

These concems would exist even if Mission's leaders and the Mission name were no longer to be
a part of the system. But that is not the case. The recent announcement of the final sales
agreement affirmed, as indicated earlier, that Mission executives will continue to run the system
under the Mission brand as a division of HCA.

In fact. Mission has consistently downplayed the fact that it is being sold, using words like
"partner" and "affiliate" to describe what is, in fact, an outright sale. The message seems to be:
"Don't worry, we'll still be here, and you won't notice any change." Mission's press release of ,
Aug. 31 formulates it thus: "Mission Health will continue to be managed locally ... "

How much autonomy Mission's executives will have in operating their division is wholly
unclear. It is presumably spelled out between the parties and is (or will be) known to the
Attorney General. But it has not been shared with the public. Logic suggests, though, that
Mission's leaders would not be eager to stay if they were deprived of substantial decision-
making authority going forward.

Consumers Union and Community Catalyst are at the forefront of analyzing the pitfalls inherent
in nonprofit hospital conversions. According to their research, nothing is more critical to the
effectiveness of the successor foundation than the makeup of its initial board:

To deliver the maximum benefit to its community, the new health foundation must act
impartially, and it must be viewed from the outset as making decisions fairly and without
bias. It is essential that the foundation not carry obligations to provide or fund services
that should be delivered by the successor corporation. It must not favor (or disfavor)
providers or other community partners on the basis of their alignment with, or
competition with, the converting nonprofit or its successor.

It is for these reasons - together with the need to assemble the right mix of skills and
background - that the board of the converting nonprofit should not be carried forward to
become the board of the new foundation. Once the planning process has identified criteria
and priorities for board recruitment, some members of the board of the converting
nonprofit may be considered, together with other candidates, for board seats. However,
they should not receive priority consideration, and no seat on the governing board,
contract or staff role with the foundation should be committed in advance to an executive
or board member of the nonprofit that is the source of the endowment.

Consider the chasm between that ideal and the actions of Mission Health. Even as the sale was
being hammered out, Mission quietly (one might say surreptitiously) went about creating a
successor foundation dominated by Mission board members. Only one of the nine announced
members has not served on the board of the system or a component institution. Three are current
Mission board members, three are past board presidents and two have served on the boards of
individual Mission hospitals.

Most were appointed in May, three months before the sale agreement was finalized and long
before Mission announced formation of the trust or put out a call for nominations from the
public. Although current system chair John Ball acknowledged in early August that six members
had been named and three were pending, he suggested that only three - not eight - had ties to
Mission. (And he concealed the fact that he himself is among the appointees).

Shortly before that, Ms. Brumit had intimated to a reporter that board members other than herself
would be chosen only after criteria were finalized. That pattern of misdirection, if not duplicity,
perfectly exemplifies the fashion in which Mission has created the successor foundation. It
would be hard to design a process calculated to inspire less trust.

Meanwhile, even as Mission was creatiiig Dogwood in secret, CEO Ron Paulus was trying to
buy support for the HCA sale by quietly promising various local nonprofits that they would
receive money from the trust. In the same vein, the Mission board announced that, if the sale
goes through, the individual foundations attached to Mission's hospitals will receive grants of as
much as $ 15 million each.

What clearer signal can Mission - soon to be a part of HCA - send? Mission considers the trust
its to run and the trust's money its to give away. And Mission's leaders have no scruples about
committing that money to endeavors that may or may not support the trust's long-term strategic
aims but transparently support Mission's short-term corporate aims.

A graphic included - perhaps inadvertently - on the missionhealthforward.org website plainly


says as much; The successor foundation will be "established and governed^ by the Mission board
(emphasis added). (See Appendix A.)

Mission has even branded the trust as an offshoot of Mission. The DHT logo, as it appears on the
trust's website, is identical to Mission's, right down to the font. (See Appendix B.) That may
appear trivial, but there is no more potent expression of a corporation's identity than its logo.

The conclusion is inescapable: If the trust is a creature of Mission, and Mission is a


creature of HCA, the trust will not be independent of HCA. The implications for grant
making are alarming, but not nearly as alarming as the implications for oversight.

In fact, what Mission is pursuing with almost indecent haste is a situation in which a trust
strongly dominated by Mission board members is responsible for enforcing compliance by
a team of executives with whom they have made common cause for years (and in many
cases, decades). In plain English, that doesn't pass the smell test.

Recent case law is instructive on this point. In 2016 the Supreme Court of Delaware found in
Sandys v. Pincus that, using a reasonable doubt standard, "an extremely close, personal bond"
between a corporate director and a corporate executive "created an inference that [the director]
cannot act independently of [the executive]."

The court's majority specifically found that the inference of a conflict "does not require a
plaintiff to plead a detailed calendar of social interaction to prove that directors have a very
substantial personal relationship rendering them unable to act independently of each other." In
that case, the "bond" was inferred from joint ownership of a private airplane - a far less
psychologically and emotionally fraught relationship than ones forged in steering a nonprofit
healthcare system through perilous times.

In effect, Mission's executives and directors have served in the trenches of a bloody war of
attrition, fighting the good fight together against all the vagaries of a collapsing health care
marketplace. It would take almost superhuman detachment for the Mission-Dogwood contingent
to cry foul on their Mission-HCA comrades.

It is worth noting, too, that for the Mission-Dogwood board members to charge Mission-HCA
with noncompliance would also be to concede that they themselves had exercised poor
judgement in approving the sale.

Consider the contrast with the Health Care Foundation of Greater Kansas City, created by
Missouri Attorney General Jay Nixon when HCA bought Health Midwest in 2003. Nixon
himself, acting on no more explicit authority than that conferred in North Carolina law,
appointed the foundation's first board. It encompassed people from the medical, social service,
business, union, government, financial and religious realms. Most importantly, it included no one
associated with Health Midwest - a guarantee that it would be truly independent.

If the current appointments are allowed to stand, an aura of insider dealing will linger over the
foundation, breeding public distrust toward an endeavor for which public trust is essential. It is a
truism of conflict-of-interest theory that the appearance of conflict can be as deadly as the reality.
This venture is too vital to the future health of Western North Carolina to be tainted from the
start by both real and perceived conflicts.

The Attorney General's mandate to ensure that the sale of Mission Health is in the public interest
demands nothing less than rejection of the board proposed by Mission. To repeat: eight of the
nine proposed members are individuals who should be barred. There exists a reasonable
inference that they cannot act independently to enforce the terms of the sales agreement.

To fulfill his duty to ensure the board's independence, the AG need not invent a wheel.
Precedents established by other attorneys general (in some instances, without the benefit of
explicit statutory authority) point to mechanisms for creating a board that is qualified.
independent and truly representative of the public whose interests the AG is sworn to protect.
(See Appendix C.)

Appendix A

How is the New Foundation Created?

Misston HwaUh Svstei • Estat>ljshod by an<J governed


Ijy Mts^ion Health Board
• NO 1 conlrolled or «nMu(?nccc}
by HCA

Successor
Foundation
€. <>5h.
R»m3in»nj{

Excerptedfrom missionhealthforward.org

Appendix B

V Mission Mfaitii MHVC


lfS 4 TUA
t TMl DOGWOOD
HEALTH TRUST

Matter

Mission

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Mission homepage (screen shot taken 8/15/18) DTH homepage (screen shot taken 8/15/18)
Appendix C

Here, for purposes of comparison, are the applicable sections of laws governing the disposition
of nonprofit assets in North Carolina and other selected states as well as notes on how attorneys
general of those states interpreted the law.

North Carolina

What the law says; § 55A-12-02. Sale of assets other than in regular course of activities,
(g) A charitable or religious corporation shall give written notice to the Attorney General
days before it sells, leases, exchanges, or otherwise disposes of all, or a majority of, its
property if the transaction is not in the usual and regular course of its activities unless the
Attorney General has given the corporation a written waiver of this subsection. This
notice shall include all the information the Attorney General determines is required for a
complete review of the proposed transaction. The Attorney General may require an
additional 30-day period to review the proposed transaction by providing written notice
to the charitable or religious corporation prior to the expiration of the initial notice
period. During this 30-day period, the transaction may not be finalized.

§ 55A-13-02. Authorized distributions.


(1) A corporation may make distributions to any entity that is exempt under section
501(c)(3) of the Internal Revenue Code of 1986 or any successor section, or that is
organized exclusively for one or more of the purposes specified in section 501(c)(3) of
the Internal Revenue Code of 1986 or any successor section and that upon dissolution
shall distribute its assets to a charitable or religious corporation, the United States, a state
or an entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986
or any successor section.

Missouri

What the law says: 355.676. Dissolution of public benefit corporation. 1. A public
benefit corporation shall give the attorney general written notice that it intends to dissolve
at or before the time it delivers articles of dissolution to the secretary of state. The notice
shall include a copy or summary of the plan of dissolution. 2. No assets shall be
transferred or conveyed by a public benefit corporation as part of the dissolution process
until twenty days after it has given the written notice required by subsection 1 of this
section to the attorney general or until the attorney general has consented in writing to or
indicated in writing that he will take no action in respect to, the transfer or conveyance,
whichever is earlier.

355.691. Effect of dissolution. (6) If the corporation is a public benefit corporation, and
no provision has been made in its articles or bylaws for distribution of assets on
dissolution, transferring, subject to any contractual or legal requirement, its assets
exclusively for one or more purposes described in section 501(c)(3) of the Internal
Revenue Code; or if the dissolved corporation is not described in section 501(c)(3) of the
Internal Revenue Code, to one or more public benefit corporations, including a foreign
corporation that would qualify under this chapter as a public benefit corporation;

The AG's interpretation: In 2003, when Health Midwest was bought by HCA, Attorney
General Jay Nixon oversaw creation of the Health Care Foundation of Greater Kansas
City and personally appointed the initial board. No one associated with Health Midwest
was named to the board.

Kentucky

What the law says: 273.323 Notification to Attorney General. The Secretary of State, on
or before the last day of December of each year, may certify to the Attorney General the
names of all corporations which have given cause for dissolution as provided in KRS
273.161 to 273.390, together with the facts pertinent thereto. Whenever the Secretary of
State shall certify the name of a corporation to the Attorney General as having given any
cause for dissolution, the Secretary of State shall concurrently mail to the corporation at
its registered office a notice that such certification has been made. Upon the receipt of
such certification, the Attorney General may file an action in the name of the state against
such corporation for its dissolution.

The AG's interpretation; To create a successor foundation to Kentucky Blue Cross


Blue Shield, the Attorney General formed a Planning Committee of consumers, health
care advocates, health care professionals, and academics. The committee drafted a
mission statement, articles of incorporation, and by-laws. In addition, the Committee
recommended a process for choosing members of the first board of the foundation that
was deliberate, open, and accessible to health care consumers and the broader public.

Massachusetts

What the law says; Ch. 180, 8A (d) (1) A nonprofit acute-care hospital, as defined in
section 25B of chapter 111, or a nonprofit health maintenance organization as defined in
chapter 176G shall give written notice of not less than 90 days to the attorney general and
to the commissioner of public health if such notice concerns a nonprofit health
maintenance organization, before it enters into a sale, lease, exchange, or other
disposition of a substantial amount of its assets or operations with a person or entity other
than a public charity. No such notice shall be required if a written waiver of such notice is
executed by the attorney general. ...

(4) If a charitable fund results from the transaction, and if the nonprofit entity making the
disposition does not continue its operation of a nonprofit hospital or nonprofit health
maintenance organization, the governance of the charitable fund shall be subject to
review by the attorney general and approval by the court. The governance of the
charitable fund shall be broadly based in the community historically served by the
predecessor nonprofit acute care hospital or health maintenance organization and shall be
independent of the new for-profit entity. The attorney general shall conduct a public
hearing in connection with his review of the plan for the governance of the resulting
charitable fund. An appropriate portion of any resulting proceeds shall, if determined to
be necessary by the attorney general, be used for assistance in the development of a
community-based plan for the use of the resulting charitable fund.

The AG's interpretation: The governance of the fund must be broadly based in the
community. This means that the board members of the Institution [the nonprofit hospital]
may not be the board members of the successor charitable fund.

(Excerpted from the Attorney General's Guidelines for Transfers of Nonprofit Acute
Care Hospitals and HMOs. The definition of "Institution" occurs in this passage:
"Transactions involving nonprofit acute-care hospitals and nonprofit HMO's (each, an
'Institution,' and collectively, 'Institutions') are subject to specific procedural
requirements ...")
Attachment 3

An Open Letter to Dogwood Health Trust and Dr. Ron Paulus


An O p e n Letter to D o g w o o d Health T r u s t a n d Dr. R o n P a u l u s :

T h e f o r m a t i o n of t h e D o g w o o d Health T r u s t (DHT) p r e s e n t s a o n c e - i n - m a n y - g e n e r a t i o n s
opportunity for W N C .

W e , t h e u n d e r s i g n e d o r g a n i z a t i o n s , s u p p o r t D H T ' s boldly s t a t e d intent "to reflect t h e population,


g e n d e r a n d e t h n i c distribution of t h e s e r v i c e a r e a " — a n d w e a p p e a l to DHT fulfill t h a t o b j e c t i v e
by f o r m i n g a b o a r d t h a t authentically e m b o d i e s W N C .

At this key time in t h e d e v e l o p m e n t of t h e DHT b o a r d of directors, w e n o t e t h a t a l t h o u g h D H T ' s


s e r v i c e a r e a is 5 2 p e r c e n t f e m a l e , its n a m e d T r u s t e e s a r e only 2 2 p e r c e n t f e m a l e . While
B u n c o m b e C o u n t y h a s a 10 p e r c e n t n o n - w h i t e population, n o n e of t h e n a m e d B u n c o m b e
C o u n t y T r u s t e e s a r e n o n - w h i t e . With o n e e x c e p t i o n , t h e E a s t a n d W e s t r e g i o n s to b e s e r v e d by
DHT a l s o a r e not yet reflective of d e m o g r a p h i c s f o u n d in t h o s e c o u n t i e s .

It t a k e s m a n y p e r s p e c t i v e s to find t h e s o l u t i o n s to i m b e d d e d s o c i e t a l c h a l l e n g e s . While m a n y
m a y s e e p o i n t s of division in t h e region, w e b e l i e v e t h a t DHT h a s a u n i q u e opportunity to
t r a n s c e n d s e p a r a t i o n s of g e o g r a p h y , population d e n s i t y , r a c e , ethnicity, a n d g e n d e r . A s o n e of
t h e l a r g e s t p e r - c a p i t a f o u n d a t i o n s in t h e country, DHT c a n s e t t h e s t a g e for truly t r a n s f o r m a t i v e
work by c r e a t i n g a d i v e r s e b o a r d t h a t b r i n g s t o g e t h e r - a n d s h a r e s d e c i s i o n - m a k i n g p o w e r
a m o n g - r e p r e s e n t a t i o n f r o m all of t h e v o i c e s of o u r region.

T h i s is bold work, a n d w e u r g e DHT to b e c o u r a g e o u s a n d t r a n s p a r e n t a s it c o n t i n u e s its


s e l e c t i o n p r o c e s s . B e c a u s e w e s h a r e D H T ' s r e s o l v e , w e offer t h e collective w i s d o m a n d
e x p e r i e n c e s of o u r o r g a n i z a t i o n s a s a r e s o u r c e to a s s i s t in u n d e r s t a n d i n g h o w to b e s t build a
b o a r d t h a t both r e p r e s e n t s a n d truly g r a s p s t h e c h a l l e n g e s a n d o p p o r t u n i t i e s t h a t exist in all
c o r n e r s of o u r region.

By c r e a t i n g a f o u n d a t i o n b o a r d t h a t r e f l e c t s t h e p o p u l a t i o n s DHT w a s c r e a t e d to s e r v e , DHT will


b e b e t t e r a b l e to a c h i e v e its m i s s i o n to dramatically i m p r o v e t h e h e a l t h a n d w e l l b e i n g of all
p e o p l e a n d c o m m u n i t i e s in W e s t e r n North C a r o l i n a .

Sincerely,
Carmen Ramos-Kennedy, President
Asheville B u n c o m b e C o u n t y N A A C P
With:
A m e r i c a n A s s o c i a t i o n of University W o m e n - Asheville B r a n c h
ACLU W e s t e r n North Carolina C h a p t e r
Asheville B u n c o m b e Institute of Parity A c h i e v e m e n t
Children F i r s t / C o m m u n i t i e s in S c h o o l s
Carolina J e w s for JusticeAA/est
C h r i s t i a n s for a United C o m m u n i t y
C o m i n g to t h e T a b l e
E l d e r s F i e r c e for J u s t i c e
Y W C A of Asheville a n d W N C
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NO; 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC; 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919.716.6050

WWW.NCDOJ.GOV

November 27, 2018

Mr. Carlos Gomez


Chief Executive Officer
Western NC Community Health Services
257 Biltmore Avenue
Asheville, NC 28801

Dear Mr. Gomez:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agi-eement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS>'fms
r
r-ovaUWK'. PaOTECTtOfJ
— —

2 6 2018 I HomeTrust
or
Bank
November 2 0 , 2 0 1 8 i since 1926
r-"'0?tnTf^jsgYegr"" . . _ j
The Honorable Josh Stein
9001 Mail Service Center
Raleigh, NC 27699-9001

Dear Attorney General Stein,

I'm w/riting to express my support for t h e initial m e m b e r s of t h e Dogwood Health Trust Board. I'm
concerned about t h e recent bad accusations toward s o m e great WNC leaders, and I w a n t to share
my independent perspective with you.
I've been in western North Carolina since 1965. Like the m e m b e r s of t h e Dogwood Health Trust
Board, I have actively served t h e community since I began in my role as CEO in 1965 with HomeTrust
Bank, now t h e second largest community bank in N.C. Among others, I have served on t h e Founding
Board of Haywood Community College Foundation, the Mission Health Board, t h e Mission
Healthcare Foundation Board, the North Carolina Rural Development Council, t h e UNC Board of
Governors for twelve years, and t h e Western Carolina University Board of Trustees for eight years.
I've also served on many boards within my industry such as t h e North Carolina Bankers Association
and t h e American Bankers Association, Federal Home Loan Bank of Atlanta, Chair of t h e Federal
Reserve Advisory Council as well as being t h e only person in WNC to be inducted into the North
Carolina Bankers Hall of Fame as well as receiving t h e NC Order of the Long Leaf Pine Award.

Through t h e s e business and community leadership roles, I've known just about all of t h e Dogwood
Board m e m b e r s for decades. In t h e case of Wyatt Stevens and Jack Cecil, I knew and worked with
their families even before they became t h e leaders of their family businesses. I've known Janice
Brumit since she and her husband, Joe, arrived in Asheville, and I've known Bob Roberts since he was
in high school and have carefully followed his career of leadership service to WNC. I have known
Michell Hicks since before his service as Principal Chief and have admired his mentorship style of
leadership even as a young WCU graduate. I have known George Renfro for over a quarter century as
a generous, strong leader by example in many organizations and a superlative m e n t o r for improving
t h e health of t h e citizens of WNC with his challenging generosity. These folks are t h e best leaders
that I know. They have t h e highest ethics. Literally, they are t h e premier leaders from my perspective
in WNC.
I think it's also important to note that they are regionally minded people and have been incredibly
generous with their time and resources, making western North Carolina what it is today. They are
thoughtful, visionary leaders and are experienced executors of well-designed strategic plans. I
believe t h e s e leaders and their attributes are exactly w h a t is needed in t h e leadership of Dogwood
Health Trust.

Sincerel

Ed Broadwell, Jr.
Chairman, CEO Emeritus

F. Ed B r o a d w e l l , Jr.
C h a i r m a n & CEO E m e r i t u s , R e t i r e d
392 Vanderbilt Road
Asheville, North Carolina 2 8 8 0 3
edbroad61@gmall.com
828-230-5389 C
828-274-1099 H
STATE OF NORTH CAROLINA CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 919.716.6050
WWW.NCDOJ.GOV

December 5, 2018

Mr. Ed Broadwell, Jr.


Chairman, CEO Emeritus
Home Trust Bank
392 Vanderbilt Road
Asheville, NC 28803

Dear Mr. Broadwell;

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
Received Date: 11/25/18

Elizabeth Peverall
136 Heron Cove
Burnsville, NC 28714-9773
(828) 284-6050
peverall(S)gmail.com

Topic: TRAINING
Subject: Mission sale to HCA, Dogwood Foundation

I have been practicing as a Family Practice Physician in Yancey County, NC for 20 years. I admit my
patients to Blue Ridge Regional Hospital in Spruce Pine (Mitchell County, NC). I am urging Attorney
General Josh Stein to put in place clear requirements to ensure the board of the Dogwood foundation is
truly representative of the people of this region of Western North Carolina. This means specific
requirements that the board include adequate representation representation from rural areas (30% of
the board from rural areas currently served by the Mission System seems reasonable, or one
representative from each of the communities served by a regional hospital in the Mission System).
Mission has shown a history of not understanding the needs we have in rural areas. Our patients tend to
be older, have transportation problems, and have less financial means. I have patients who would not
get the care they need if they had to drive to Asheville.

The patients I care for depend on this hospital for emergency care, inpatient care, labs, radiology, the
capability to have emergency surgery, anesthesia services (which can be via a CRNA service). They also
really needed obstetric services, but that has already been taken away from us by Mission Hospital. I am
very concerned that since HCA is to be beholden to its shareholders to make a profit, has to come up
with funds to cover debt and taxes, that they will cut essential services or make decisions that will
adversely effect patient care. Please ensure the contract with ACA states that we will not lose services or
quality of care given in our community, and if there is ever any chance they would sell our hospital, that
it comes back to our community to be managed, not sold to another entity or closed.

Also, in regard to board membership, it is a conflict of interest to have anyone on the board who has
deep ties to Mission. Restrictions need to be in place to ensure anyone who has any financial interest or
benefit from the sale of Mission (including an increase in salary) be excluded from the board. Oversight
needs to be in place to ensure proper board composition and transparency regarding decisions that will
effect our local community.

Thank you for your consideration.

Elizabeth M. Peverall, MD, MPH


Celo Health Center
Mountain Community Health Partnership
Consumer

From: notification@prs01hcrmps01.ic.local
Sent: Thursday, November 29, 2018 4:29 PM
To: Consumer
Subject: Mission sale to HCA, Dogwood Foundation

Notes
Received on 11-25-18. Thanks!!! Karen

Contact
Elizabeth Peverall
136 Heron Cove
Bumsville, NC 28714-9773
(828) 284-6050
peverall@gmail.com

Message
Topic: TRAINING
Subject: Mission sale to HCA, Dogwood Foundation

I have been practicing as a Family Practice Physician in Yancey County, NC for 20 years. I admit my patients
to Blue Ridge Regional Hospital in Spruce Pine (Mitchell County, NC). I am urging Attorney General Josh
Stein to put in place clear requirements to ensure the board of the Dogwood foundation is truly representative of
the people of this region of Western North Carolina. This means specific requirements that the board include
adequate representation representation from rural areas (30% of the board from rural areas currently served by
the Mission System seems reasonable, or one representative from each of the communities served by a regional
hospital in the Mission System). Mission has shown a history of not understanding the needs we have in rural
areas. Our patients tend to be older, have transportation problems, and have less financial means. I have patients
who would not get the care they need if they had to drive to Asheville.

The patients I care for depend on this hospital for emergency care, inpatient care, labs, radiology, the capability
to have emergency surgery, anesthesia services (which can be via a CRN A service). They also really needed
obstetric services, but that has already been taken away from us by Mission Hospital. I am very concerned that
since HCA is to be beholden to its shareholders to make a profit, has to come up with funds to cover debt and
taxes, that they will cut essential services or make decisions that will adversely effect patient care. Please ensure
the contract with ACA states that we will not lose services or quality of care given in our community, and if
there is ever any chance they would sell our hospital, that it comes back to our community to be managed, not
sold to another entity or closed.

Also, in regard to board membership, it is a conflict of interest to have anyone on the board who has deep ties to
Mission. Restrictions need to be in place to ensure anyone who has any financial interest or benefit from the
sale of Mission (including an increase in salary) be excluded from the board. Oversight needs to be in place to
ensure proper board composition and transparency regarding decisions that will effect our local community.

Thank you for your consideration.

Elizabeth M. Peverall, MD, MPH


Celo Health Center
Mountain Community Health Partnership
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE T O L I - F R E E IN N C : 8 7 7 . 5 6 6 . 7 2 2 6

ATTORNEY GENERAL 9 0 0 1 MAIL S E R V I C E C E N T E R OUTSIDE O F NC: 9 1 9 . 7 1 6 . 6 D 0 0


F A X : 9 1
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 9-716.6050

WWW.NCDCJ.GOV

December 5, 2018

Dr. Elizabeth M. Peverall


Celo Health Center
136 Heron Cove
Burnsville, NC 28714-9773

Dear Dr. Peverall:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the fiall range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
N o v e m b e r 26, 2 0 1 8
nc
the community foundation
Board of Directors
w e s t e r n n o r t h Carolina
The Honorable Josh Stein
S t e p h a n i e Norris Kiser
9 0 0 1 Mail Service Center
Chair
Raleigh, NC 2 7 6 9 9 - 9 0 0 1
Sarah S p a r b o e T h o r n b u r g

Vice-Chair Dear Mr. Stein,


Michael Fields

Secretary On behalf of The Community Foundation of W e s t e r n North Carolina's (CFWNC)


Board of Directors, w e are writing in regard t o t h e p e n d i n g sale of Mission Health
G. E d w a r d Towson, II
Systems, Inc. and t h e s u b s e q u e n t f u n d i n g of The Dogwood Health Trust (DHT).
Treasurer
CFWNC is not in a position t o e v a l u a t e t h e e l e m e n t s of t h e sale including t h e price,
impact on m a r k e t competition or t h e long-term e f f e c t on health care across
Maurean B. A d a m s W e s t e r n North Carolina. W e t r u s t t h e Attorney General's office t o d e t e r m i n e t h e
Caroline M. A v e r y issues s e t forth in t h e sale proposal.
Natalie N. Bailey
M e m b e r s of t h e Mission Board a r e known t o us as c o m m u n i t y leaders of s t r o n g
G u a d a l u p e Chavarrla II
integrity and c h a r a c t e r w h o w e believe act in t h e b e s t interests of t h e region. W e
W i l l i a m Clarke
u n d e r s t a n d t h a t DHT w a n t s t h e leadership of its board t o reflect t h e geographic,
Charles F r e d e r i c k d e m o g r a p h i c and ethnic diversity of our region. W e strongly s u p p o r t their
C o n s t a n c e M. Haire continuing e f f o r t s in this regard.
A.C. H o n e y c u t t , J r .
The s t a t e d mission of DHT is t o a d d r e s s t h e social d e t e r m i n a n t s of health across
Susan Jenkins
WNC, an effort t h a t w e applaud. CFWNC is currently t h e largest philanthropic
Jean M c L a u g h l i n f u n d e r f o r WNC; our service a r e a is t h e s a m e 18-county f o o t p r i n t t h a t DHT will
J o a n n e Badr M o r g a n cover should t h e sale p r o c e e d . CFWNC has b e e n building p e r m a n e n t
L o w e l l R. Pearlman
philanthropic resources and supporting nonprofits in this region for 4 0 years.
Our work has t h e potential t o s t r e n g t h e n and c o m p l e m e n t t h a t of DHT.
S c o t t Shealy
M e m b e r s of DHT's leadership t e a m have r e a c h e d o u t for early strategic
J. Chris S m i t h
discussions and input. W e w e l c o m e f u r t h e r partnership and collaboration with
Stephen Watson DHT t o a d d r e s s t h e social d e t e r m i n a n t s of health.

CFWNC has built a r e p u t a t i o n as a t r u s t e d p a r t n e r in philanthropy f o r families,


Elizabeth Brazas
businesses and nonprofits over t h e past 4 0 years. W e stand ready t o assist and
President
collaborate with DHT t o e n s u r e t h a t our c o m b i n e d e f f o r t s achieve DHT's s t a t e d
4 V a n d e r b i l t P a r k Drive
goal of dramatically improving t h e health and wellbeing of all p e o p l e and
Suite 3 0 0
Asheville, NC 2 8 8 0 3 c o m m u n i t i e s in W e s t e r n North Carolina.
p, 8 2 8 - 2 5 4 - 4 9 6 0
f. 8 2 8 - 2 5 1 - 2 2 5 8 Sincerely,
www.cfwnc.org

Elizabeth Brazas S t e p h a n i e Norris Kiser


President, CFWNC Board Chair, CFWNC
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL S E B V I C E C E N T E R OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
R A L E I G H , N O R T H CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0
WWW.NCDOJ.GOV

December 5, 2018

Ms. Elizabeth Brazas


President
The Community Foundation of Western North Carolina
4 Vanderbilt Park Drive, Suite 300
Asheville, NC 28803

Dear Ms. Brazas:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the "
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
R£CI;,VI;D
coNauMSK Poca^cTiof! p'v.

DEC - 3 2018
' P ,111 , III,!

YANCEY COUNTY
ECONOMIC DEVELOPMENT COMMISSION

Jamie L . M c M a h a n
Planning & Economic Development Director
N C E D A , AICP, N R E D A , SEDC

28 November 2018
The Honorable Josh Stein
Attorney General of North Carolina
9001 Mail Service Center
Raleigh, NC 27699-9001

RE: Mission Health System - HCA Merger

Dear Mr. Stein

I am writing you at the direction of the Board of Directors of the Yancey County Planning
& Economic Development Commission in order to present to you the enclosed resolution adopted
by the board raising certain points regarding the merger o f Mission Health System and the Hospital
Corporation of America (HCA) as outlined in the proposed Asset Pvirchase Agreement recently
made public and forwarded to your office for review.

To begin I would like to point out that the Yancey EDC does not oppose the proposed
merger of the two health care systems in principle. From my own point of view as an economic
development professional evaluating the deal objectively I readily see how the merger is an
attractive deal for HCA's shareholders and how the deal w i l l also benefit Mission Health System.
The resulting merged entity would be much more able to provide medical services to western
North Carolina in a financially efficient way through their ability to negotiate better terms with
insurers due in large part to the number of patients served by HCA as a whole, and in light of other
factors. Additionally we are aware that the medical care provided by HCA is widely regarded to
be among the best and most innovative in the nation.

However, what we request through the enclosed resolution is some additional clarity with
respect to certain aspects of the proposed transaction. From Yancey EDC's point of view we seek
clarification of three points specifically. First, we would like to receive better clarification about
the scope of services required to be provided by HCA through its rural hospitals. From an
economic development perspective ready and available access to healthcare is a large recruiting
concern for any region, certainly more so in a rural area such as Yancey County.

113 G r e e n M o u n t a i n D r i v e , P.O. B o x 246, BumsviUe, N C 28714


(828) 682-7722
Jamie.McMahan@yanceycountync.gov
Second, we would seek clarification that there w i l l be some assurance that the charitable
foundation resulting from the sale of Mission's assets to HCA w i l l be fairly representative of the
entire 18-county area served by Mission and that the governance of the resulting foundation be
adequately removed from direct influence by officials now or formerly affiliated with the
governance and administration o f Mission Health System.

Thirdly, we have two questions which are relevant to Yancey County specifically; namely
(1) some clear indication as to whether HCA would continue to provide ambulance service in
Yancey County through a direct contract with Yancey County government through a format
similar to that presently in place with Mission, and (2) a definitive written statement directed to
the Yancey County EDC disclosing the purchase price allocation assigned to the Blue Ridge
Fitness Center in the terms of the Asset Purchase Agreement so that Yancey EDC's subsidiary
development corporation. The Winter Star Company, can determine whether it w i l l choose to
exercise its right of first refusal to repurchase that asset.

As I mentioned above, we do feel that this transaction can be a beneficial merger and
positively impact the healthcare of the citizens of western North Carolina, with your oversight,
and the clarification of certain points of the deal which are of particular interest to many of us here
in the region.

We appreciate your time and kind attention in reviewing the points raised in the enclosed
resolution. I am happy to provide any additional information you may need from us should that
be the case. Many thanks for your work in evaluating this transaction and for all that you and your
office does for the citizens of western North Carolina and thefctate as a whole.

McMahaflffTJirector

/jlm, end.

113 Green Mountain Drive, P.O. B o x 246, BumsviUe, N C 28714


(828) 682-7722
Jamie.McMahan@yanceycountync.gov
YANCEY COUNTY
ECONOMIC DEVELOPMENT COMMISSION

RESOLUTION
Concerning the Proposed Sale of Mission Health System. Inc. to
Hospital Corporation of America. Inc.

WHEREAS the Board of Directors of the Yancey County Economic Development


Commission (hereinafter "Board") are interested in the health and well-being of the
citizens and residents of Yancey County, realizing the impact that a healthy workforce
has on the overall economy of any county or municipality: and

WHEREAS the Board is cognizant of the impact that the ready availability of and
access to healthcare plays in the recruitment and retention of business and industry to
Yancey County and the Town of Burnsville; and

WHERAS the Board is aware of the proposed transaction by which Hospjtal


Corporation of America (hereinafter "HCA") intends to purchase Mission Health System,
Inc., and its affiliates (hereinafter "Mission"); and

WHEREAS the Board does not object in concept to a possible sale of Mission's
assets to HCA, and understands that there are likely to be advantages to the patient
population in Mission's service through the efficiencies and experience that HCA will
bring to the operations of Mission's medical facilities, further considering that the sale as
proposed would provide a charitable endowment of over $1 billion which will be
contributed to The Dogwood Health Trust Foundation (hereinafter "Foundation") with the
intention of expending such funds to promote the health of the patient population served
by Mission; and

WHEREAS Mission has conditionally further proposed to give the sum of $15
million to the Blue Ridge Regional Hospital Foundation; and

WHEREAS the Board has reviewed the terms of the proposed asset purchase
agreement between Mission and HCA (hereinafter "APA") dated 30 August 2018; and

WHEREAS upon its review of the APA the Board has observed several concerns
which it wishes to make known to the North Carolina Attorney General as he conducts
the statutory review of the proposed sale which is it his responsibility and authority to
do; and

WHEREAS there are specific and unique considerations regarding services


currently provided by Mission in Yancey County (such as ambulance service and the
continued operation of the Blue Ridge Fitness and Rehab Center) which have yet to be
fully resolved prior to the transaction moving fon/vard between Mission and HCA.

NOW THEREFORE, in order to express the concerns which it has regarding the
terms of the APA presently proposed between Mission and HCA, the Board of Directors
of the Yancey County Economic Development Commission, do hereby RESOLVE as
follows:

1) That the Board respectfully requests the Attorney General to obtain


clarification of the full scope of services which are to be provided by HCA at
all rural hospital facilities in the Mission system so that there is as clear an
understanding as to what services HCA will commit to continue to provide at
those rural hospitals as there is a definition of what those services are to be at
the main campus of Mission Hospital.

2) That HCA make the protected period for rural hospitals 10 years, equal to that
for Mission Hospital, and that during the protected period no individual or
body should have power to abrogate the protection (a power conferred by the
agreement on "Local Advisory Boards" created for that sole purpose). Finally,
the definition of Force Majeure should conform to North Carolina law.

3) That with respect to the Foundation that the Attorney General impose
conditions on his approval that would ensure that a substantial majority of the
members of the governing board of the Foundation are independent of any
association with Mission or HCA and that the Foundation's governing board
be established such that it is composed of members who are fairly
representative of the eighteen-county area that the foundation is designed to
serve.

4) That with respect to the proposal of Mission to transfer the sum of $15 million
to the Blue Ridge Hospital Foundation that the Attorney General impose
guidelines on the terms set out by Mission to ensure that they are reasonable
and will be fairly interpreted and enforced.

5) That the Attorney General retain continued oversight of the activities of the
Foundation and the proposed transfer of the sum of $15 million to the Blue
Ridge Hospital Foundation.

6) That the Attorney General make public all information submitted to him by
Mission or HCA, subject only to such redactions as he shall deem appropriate
and necessary.

7) That HCA clarify at the earliest opportunity whether or not it intends to


continue the operation of ambulance service in Yancey County under the
present Mission arrangement or some similar arrangement with local
government or whether it intends to withdraw from such an arrangement,
giving time to contract for alternative arrangements for the provision of
ambulance service in Yancey County.

8) That Mission and HCA disclose the purchase price allocation assigned by
them to the Blue Ridge Fitness Center as a part of their agreement so that the
Winter Star Company (a development corporation affiliated with Yancey EDC)
may receive formal notice of its right to exercise its right of first refusal for the
sale of said asset and thereafter determine whether or not it wishes to
exercise that right.

Adopted this the 13th day of November 2018.

Yancey Planning & Economic


Development Comission

Joitf^w, Chairman
STATE OF NORTH CAROLINA CONSUMER PROTECTION
JOSH STEIN D E P A R T M E N T OF J U S T I C E TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050
WVVW.NCDOJ.GOV

December 5, 2018

Mr, Jamie McMahan


Director
Yancey County Economic Development Commissioa
PO Box 246
Bumsville, NC 28714

Dear Mr. McMahon:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

jS/tms
Begin forwarded message:

From: John Horrocks <iohn@,blackbirdframe.com>


Date; November 19,2018 at 11:33:31 AM CST
To: Josh Stein <istein@ncdoi.gov>. Jennifer Harrod <iharrod@ncdoi.gov>
Subject: Dogwood Health Trust

I want to add my voice to the many others in our community who are very
concerned about the lack of diversity in the current proposed membership of
the Dogwood Health Trust board. A board comprising 7 men, 2 women and
only one minority member simply does not come close to being
representative of our community. Even if more gender, racial and geographic
diversity is planned for the future, there is no excuse for its glaring absence
at this critical early stage.

Current board members, good citizens all, have argued that the existing
board provides the leadership experience, financial connections and
understanding of the medical industry to make the transition a success.
However, the Dogwood Trust is neither a business nor a charitable
organization that requires experienced fund-raisers and personnel
management expertise. What the board needs most are spokespersons from
across the spectrum to guide the use of funds in the manner that will most
benefit this diverse community.

A writer in yesterday's Asheville Citizen-Times correctly pointed out that


Mission Hospital was originally the fruit of the labors of women volunteers,
and that women alone oversaw the organization for decades. That unique
heritage alone cries out for a different kind of leadership for the Dogwood
Trust than is currently proposed.

That Mission is a valuable asset today is the result of not only recent
leadership but also dedicated staff and physicians, as well as strong
community support. The Dogwood Trust will exist to serve as protector of
that asset on behalf of those who built Mission and their progeny. I urge
you to withhold your approval of this sale unless and until the permanent
structure of Dogwood Health Trust reflects the characteristics and interests
of the region it will serve.

Regards,
John

John Horrocks
O w n e r , BlackBird F r a m e & Art

iohn@blackbirdframe.com
www.blackbirdframe.com

3 6 5 Merrimon Ave, Asheville NC 28801 p. 828.225.3117


STATE OF NORTH CAROLINA CONSUMER PROTECTION

JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NCI 8 7 7 . 5 6 6 . 7 2 2 6


ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF Nc: 9 1 9 . 7 1 6 . 0 0 0 0

RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0


WWW.NCDOJ.GOV

November 27, 2018

Mr. John Horrocks


BlackBird Frame & Art
365 Merrimon Avenue
Asheville, NC 28801

Dear Mr. Horrocks;

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessai-y information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the fiill range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

• Josh Stein
Attorney General of North Carolina

JS/tms
p.
co^4»^•"!r*r^r'" / .
&llaAJion
i r 'OtedUl
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October 16, 2018
KOS'i H
i CAHOLh lA
DEPT. O ? ATTORrtiY
The Honorable Josh Stein
9001 Mail Service Center P H O N E 828.652.3661
Raleigh, NC 27699-9001

Dear Attorney General Stein,

I support the Mission Health and HCA Healthcare transaction for two main reasons. First, with this
transaction, t h e health system will be in better shape than it currently is and especially moving forward
into the future. Also, Dogwood Health Trust will be a phenomenal thing. It's actually hard to wrap your
mind around all it will be able t o do for western North Carolina.

I want to begin by sharing my d e e p affinity not only for my community, but also for McDowell Hospital
so you can understand just how important both are to me. I was born at Marion General Hospital. My
father, Ed Rankin, served on t h e hospital board in t h e 70s, 80s and into the early 90s. He was board chair
and chaired t h e capital campaign that built McDowell Hospital. The hospital's road, Rankin Drive, was
dedicated in his name. So, I have a vested interest.

I'm also a business o w n e r in western North Carolina. My father started our family's business in 1973,
and we are still going strong with offices in Marion, Spruce Pine, Franklin and Shelby.

About seven years ago, I was asked to be on the McDowell Hospital Board. I have also held a seat on t h e
Mission Health System Board for about 4 years. It has been amazing to be a small part of t h e
turnaround here in Marion because we have t h e best and most compassionate staff on t h e planet -
from the front desk, to the business operations, to the caregivers on the front line. We all know how
difficult operating a rural hospital can be, and prior to its affiliation with Mission, McDowell Hospital had
depleted its cash and was unable to buy equipment or pay vendors. That is behind us now, especially
with this planned transaction between Mission and HCA.

I share all of this to ensure you hear from leaders in western North Carolina who know our community
well and support t h e Mission-HCA transaction. What we know that maybe people outside of WNC may
not understand is that we don't have t h e resources of the Charlotte, Raleigh or Greensboro regions.
This transaction and Dogwood Health Trust are very significant assets for us to be able t o have here in
WNC. Dogwood Health Trust is going to provide resources unlike anything we have ever had, and we'll
have even greater access to t h e highest quality healthcare where we live. To me, it's a win-win all the
way around.

Sincerely,

ied Rankin
President, Marion Credit Company

2 1 6 S o u t h Main S t r e e t • P.O. Box 6 3 9 • Marion, North Carolina 2 8 7 5 2


S T A T E OF N O R T H C A R O L I N A CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC; 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE CENTER OUTSIDE OF NC: 9 1 9 . 7 1 6 . 6 0 0 0
FAX;
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919.716.6050
WWW.NCDOJ.GOV

December 5, 2018

Mr. Jed Rankin


President
Marion Credit Company
PO Box 639
Marion, NC 28752

Dear Mr. Rankin:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
aeon rr
nv
" 1
kr

Mr. Warren J. Cabe


Director of Emergency Services
IViacon County
104 East iVIain Street
Franl<lin, NC 28734
October 16, 2018

The Honorable Josh Stein


Attorney General's Office
9001 Mail Service Center
Raleigh, NC 27699-6750

Dear Mr. Stein,


I am aware of t h e potential acquisition of Mission Health System, Inc. and its affiliates by HCA
Healthcare, Inc. (HCA) and would like to submit this individual letter of support for t h e acquisition.

The Mission Health staff has been very forthcoming with information concerning t h e pending
transaction and have distributed information to the community through various m e t h o d s including
emails, press releases, informational sessions and internet sources. Although t h e r e are concerns in t h e
community, as t h e r e should be in large transformation of t h e local health care system, it does appear
t h a t t h e evaluation process and final decision to a t t e m p t this potential acquisition with HCA is in t h e
best interest of our community at this time. There does not a p p e a r to be a n o t h e r viable option to allow
t h e existing Mission Health System t o continue to provide t h e s a m e level and quality of care throughout
our very distinct and geographically different region as we are currently accustomed to.

The economies of scale appear to favor delivering continued quality patient care with support for
facilities and clinicians, knowledge support, cost-effective back office services and additional capital
expenditures in t h e future. Substantial protections on selling or closing facilities will provide some
assurances that healthcare provisions will have a much stronger guarantee of continuance than exists
with t h e current healthcare organization structure.

MACON C O U N T Y C O U R T H O U S E ANNEX 5 W E S T MAIN S T R E E T FRANKLIN, N O R T H CAROLINA 2 8 7 3 4


PHONE 828-349-2000 FAX: 8 2 8 - 3 4 9 - 2 4 0 0
aeon

Our region has a strong history of philanthropy and t h e potential acquisition addresses future needs
through both t h e disbursement of funds to t h e existing Legacy Foundations and t h e creation of t h e
Dogwood Health Trust, which could be one of t h e largest private foundations in North Carolina, capable
of distributing millions of dollars each year t o improve t h e health and well-being of our communities.

With a history of delivering healthcare to our communities, often serving as the initial entry portal
into t h e overall health care system, I am fully aware of t h e complexities of managing, maintaining, and
improving healthcare delivery. Mission Health System has worked diligently with us as a partner to
continually strive to deliver t h e care so needed by our residents and visitors. I am sure t h e r e will be
questions, concerns, and issues that will need to be addressed along t h e way, but I am confident from
my perspective all parties involved are willing and capable of undertaking this goal and I support and
encourage t h e approval of t h e purchase a g r e e m e n t between Mission Health System, Inc. and HCA
Healthcare, Inc.

Sincerely;

Warren J. Cabe

Cc: File

MACON C O U N T Y C O U R T H O U S E ANNEX 5 W E S T MAIN S T R E E T FRANKLIN, N O R T H CAROLINA 2 8 7 3 4


PHONE 828-349-2000 FAX: 8 2 8 - 3 4 9 - 2 4 0 0
S T A T E OF N O R T H C A R O L I N A CONSUMER PROTECTION
J O S H STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL , 9001 MAIL SERVICE CENTER OUTSIDE OF NC; 9 1 9 . 7 1 6 . 6 0 0 0

RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 FAX: 9 1 9 . 7 1 6 . 6 0 5 0

WWW.NCDOJ.GOV

December 5, 2018

Mr. Warren J. Cabe


Director of Emergency Services
Macon County
104 East Main Street
Franklin, NC 28734

Dear Mr. Cabe:

Thank you for contacting me regarding the proposed sale of Mission Health to HCA HealthCare,
Inc. It is good to hear from you.

Earlier this year HCA Healthcare announced its intent to pay $ 1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that HCA Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know, Mission Health currently operates six hospitals and
is an important part of healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects of Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale of Mission Health to HCA
Healthcare. At this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we will carefully review it.

Comments like yours provide critical feedback that ensure we hear the full range of issues. You
can rest assured that your correspondence will be included in our file and will assist in the
thorough review of this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, and please continue to
stay in touch on matters of concern.

Sincerely,

Josh Stein
Attorney General of North Carolina

JS/tms
From; William OConnell <wkoconnell@earthlink.net>
Sent: Wednesday, September 26, 2018 10:01 PM
To: Harrod, Jennifer
Subject: COAH Added Encouragement of WNC Community Leaders to Comment re the Post
MH-HCA sale Conversion Health Foundation

Hello Jennifer,
Hope you are holding up ok as you dig through what I am imagining is a pretty deep pile o f material re the M H -
H C A deal.

Below is a mailing C O A H sent out tonight to all in attendance at the Aug 3rd Forum (but not those coded in
our database as: VIP's, Press, or Speakers; also, those Invited but not responding to the Forum invitation or
Registered for the Forum, but did not show up, were sent a separate mailing, which I ' l l send you in a minute).

The intent of this mailing is twofold:

• Further encourage comments to your Office by sharing with them two forms of action taken by their
peers,
• Make sure they have access to the proposed contract between M H and H C A as well as examples of
issues/concerns raised in reference to that contract by their peers just before a Sunday, Sept 30th dinner
for invited W N C community reps I am told is being held by D H T

A l l I know re the referenced D H T Sept 30th event that Franklin's Mayor Bob Scott was invited and intends to
go. I've not received anything re the event and a review of D H T ' s web site makes no mention o f it.

COAH's Board continues to study and consider the implications of the proposed M H - H C A sale agreement. We
w i l l by mid-Oct submit to you our comments about that document, as well as the D H T ' s initial launch with
specific reference to its governance. The latter is a continuing concern o f ours.

Questions

1. Given C O A H has worked to not only inform W N C leaders re the M H - H C A sale deal as well as the
implications of it for DHT, but to also encourage local leaders to submit comments to your Office, I
would appreciate knowing about how many comments your Office had received (whether via its
"complaint" page or in direct communication to your own email address). Is this something you might
share with me?
2. Also, are there any efforts you would wish C O A H take regarding this matter that you believe would be
in the public's interest?

Thanks.

Bill

Begin forwarded message;


From: Communities for Older Adult Health <Coah.avl@qmail.oom>
Subject: WNC Conversion Health Foundation Report
Date: September 26, 2018 at 8:40:38 PM EDT
To: Bill O'Connell <wkoconnell@earthlink.net>
Reply-To: <Coah.avl@amail.com>
COAH (Communities for Older Adult Health) and its sponsoring partners from the August 3rd
WNC Conversion Health Foundation Forum held at UNC Asheville offer you examples of
what follow up actions some of your fellow community leaders have taken.

As a local leader we appreciated you joining us to gain an understanding about how a


conversion health foundation resulting from the sale of Mission Health could become a major
resource to advance your community's health and well-being. Since the Forum the proposed
sale contract has been available for public review and comment.

We encourage you to study this document, especially Section 7.9 related to the formation of
Dogwood Health Trust and its responsibilities after the sale of Mission Health to HCA is
completed.

Other community leaders have examined this contract carefully, prompting them to share
publicly their concerns. Two examples of how you might share your perspective about this are
included below. Please note the critical issues identified and their potential impact on the
health needs of your community.

• Resolution bv Governing Board of the Town of Burnsville Concerning The Sale of


Mission Hospital System to Hospital Corporation of America (Hca)- We, the Burnsville
Town Council... address the following issues pertaining to the sale of the Mission
Hospital System (a non-profit health care system) to HCA (a for-profit hospital care
system). We respectively ask that our North Carolina Attorney General provide written
assurances of the... concerns facing our Town of Burnsville residents.
• We need to know more about HCA's plans- Smoky Mountain News- Bob Scott, Guest
Columnist- The proposed Mission/HCA sale could be the most significant event —
negative or positive — to affect Franklin and the region for decades. As Franklin's
mayor, I have a duty and obligation to see that our residents and visitors are not
shortchanged in this $1.5 billion sale of Mission to HCA.

We again encourage you to respond to Special Deputy Attorney General Harrod's invitation
to share vour comments, opinions, and Questions with the AG's Office.

For further information about August 3rd Forum and this communication, please
contact: coah.avl@gmail.com

Thank you.
Bill O'Connell, President, COAH
This email was sent to wkoconnell(S).earthlink.net
why did I get this? unsubscribe from this list update subscription preferences
COAH • 3 Ridge Ter • Asheville, NC 28804-2757 • USA

0
Yost, Julie

From; William OConnell <wkoconnell@earthlink.net>


Sent: Wednesday, September 26, 2018 10:10 PM
To: Harrod, Jennifer
Subject; Fwd: WNC Conversion Health Foundation Report

Hello again Jennifer,


This is the second mailing sent out tonight, which I described in my previous email sent you a few minutes ago.
This one went to about 250+ WNC community leaders who are in our database but either did not respond to the
invitation we sent them in late July or the few who did register, but did not show up.

In addition to serving the two functions noted in my previous email, this one also conveys to this group a copy
of the Forum summary report. Our intent is that i f they review that short report, it might help build a sufficient
understanding that facilitates them offering public comments on the matter.

Bill
Begin forwarded message:

F r o m ; Cf^mmunities for Older Adult Health <Coah.avl@Qtnail.conn>


Subject: WNC C o n v e r s i o n Health F o u n d a t i o n Report
Date: September 26, 2018 at 8:43:12 PM EDT
To: <wkoconnell@earthlink.net>
Reply-To: <Coah.avl@qmail.com>
COAH (Communities for Older Adult Health) and its sponsoring partners invited you to an
August 3rd WNC Conversion Health Foundation Forum held at UNC Asheville. Because of
your leadership role in WNC, we wanted to offer you an opportunity to gain an understanding
about what may become a major resource to advance your community's health and well-
being.

Although you were not able to join us for that event, we still encourage you to continue
following the formation of the Dogwood Health Trust, the conversion health foundation to
result from the sale of Mission Health to HCA, which is now before the NC Attorney General
for consideration. Here is a link to a brief report of that Forum. You will note it includes a
description of your colleagues' plans to comment on what they learned during the
Forum. Forum Report

Recently the proposed sale contract has been available for public review and comment. We
encourage you to study this document, especially Section 7.9 related to the formation of
Dogwood Health Trust and its responsibilities after the sale of Mission Health to HCA is
completed.

Other community leaders have examined this contract carefully, prompting them to share
publically their concerns. Two examples of how you might share your perspective about this
are included below. Please note the critical issues identified and their potential impact on the
health needs of your community.

Resolution bv Governing Board of the Town of Burnsville Concerning The Sale of


Mission Hospital System to Hospital Corporation of America (Hca)- We, the Burnsville
Town Council... address the following issues pertaining to the sale of the Mission
Hospital System (a non-profit health care system) to HCA (a for-profit hospital care
system). We respectively ask that our North Carolina Attorney General provide written
assurances of the... concerns facing our Town of Burnsville residents.

We need to know more about HCA's plans- Smoky Mountain News- Bob Scott, Guest
Columnist- The proposed Mission/HCA sale could be the most significant event —
negative or positive — to affect Franklin and the region for decades. As Franklin's
mayor, I have a duty and obligation to see that our residents and visitors are not
shortchanged in this $1.5 billion sale of Mission to HCA.

During the August Forum, Special Deputy Attorney General Harrod invited all in attendance
consider the relevant issues and their impact on local communities. You are also
invited to share vour comments, opinions, and questions with the AG's Office.

For further information about August 3rd Forum and this communication, please
contact: coah.avl@qmail.com

Thank you.
Bill O'Connell, President, COAH
This email was sent to wkoconnell@earthllnk.net
why did I get this? unsubscribe from this list update subscription preferences
Communities for Older Adult Health • 3 Ridge Ter Asheville, NO 28804-2757 • USA

0
Communities for Older Adult Health (COAH)
825-C Merrimon Avenue, Suite 240
Asheville, North Carolina 28804
wkoconnell@earthlink.net 828-505-4931

Communities for Older Adult Health

Statements of Mission and Vision

Mission

Communities for Older Adult Health (COAH) exists to contribute to improving the
well-being of the Asheville-Buncombe County community by two pursuits:
> Identifying local opportunities to facilitate healthy aging by assessing the
experience of other communities and the works of leading thinkers in the
field of gerontology,
> Encouraging communication among local citizens and their leaders to
determine how to use opportunities to facilitate healthy aging and, through
this, advance the health of the entire community.

Vision

COAH helps create a community in which all public and private community
planning includes consideration of how to further healthy aging and inclusion of
this serves to improve the well-being of Asheville-Buncombe County citizens of
all ages, regardless of health or income status. This community becomes a model
for facilitating healthy aging, attracting new residents and organizations
dedicated to active participation in its success. >;

(Approved May 11, 2016)

COAH is a non-profit, tax exempt organization under IRS Section 501(c)(3) Improving the well being of
the Asheville-Buncombe County community, by identifying local opportunities to irnprove healthy aging
and encouraging related communication among local citizens and their leaders.
Communities for Older Adult Health (COAH)

Board of Directors (2018)


Biographical Statements

Laurie Frarey- Laurie is a Nurse Practitioner providing health assessments of older


adults for United Healthcare. She has taught, coordinated research operations, and
provided clinical services over almost three decades with UNC-Chapel Hill's Medical
School and Hospitals with a focus on care of HIV infected patients. Laurie has served
as a volunteer providing clinical care in Africa and Central America. Laurie earned her
MSN as a Family Nurse Practitioner at UNC-Chapel Hill; she holds both a NC State
Nursing License and an American Board of Nursing Specialty Certificate in FNP.

Phil Lenowitz- Phil continues to consult with the DHHS's Indian Health Services and
the NIH in HR matters; locally he serves the City of Asheville, NC as Chair of its
Neighborhood Advisory Committee and is a member of Transportation Commission and
is active health education at the UNCA's OLLI program. He retired as Deputy Director of
the NIH's Human Resources; prior to that he served in executive assignments with the
VA and as a trader on the Philadelphia Stock Exchange. Phil earned his BA in Industrial
and Labor Relations from Cornell University.

Bill O'Connell- Bill is the founder and CEO/President of COAH. He is presently


enrolled in graduate study at UNC-Asheville focused on older adult health policy. He
has served as a senior executive for forty years in public and private nonprofit national
organizations in the fields of education, health, and safety. His key assignments have
been in national advocacy campaigns, asset acquisitions, financial turn arounds,
strategic planning, and board development. Bill's initial graduate training was in
business management (MBA, University of San Francisco) and public administration
(MPA, Northern Illinois University).

Carole Spainhour-. Carole is the principal of Elder Law Carolina, named by U.S. News
and World Report as one of the Best Law Firms in America in the field of Elder Law.
She has served as chair of the Elder Law Section of the NC State Bar Association, is a
member of the National Academy of Elder Law Attorneys, and limits her practice to
Elder Law and Estate Planning. She has served for 16 years as a Trustee for the
Clabough Foundation, served 9 years on the Appalachian Regional hospital ethics
committee. She also served on the Blowing Rock Hospital advisory board. Carole is a
graduate of UNC-Chapel Hill's School of Law and has an MBA from Georgia State
University.

COAH is a non-profit, tax exempt organization under IRS Section 501(c)(3) improving the well being of
the Asheviile-Buncombe County community by identifying local opportunities to improve healthy aging
and encouraging related communication among local citizens and their leaders.
Yost, Julie •

From: William OConnelF <wkoconnell@earthlink.net>


Sent: Monday, September 10, 2018 1:38 AM
To: Harrod, Jennifer
Subject: WNC-CHF August 3rd Forum Summary Report
Attachments: Summary Rpt 0803 Forum rev 090718.docx; Data rpt FINAL rec 082318.pdf; Evaluation
Responses 1-53 FINAL rec fr AP 082318.pdf; Eval items for AP conversion to Survey
Monkey O81118.docx

Good Morning Jennifer,

Enclosed is the full six page report for your review and files. It was my intention to await release of this on
receiving your comment about the summary o f your August 3rd remarks to the Forum's audience; however,
now that the full M H sale proposal is in your hands, it seemed unlikely we would hear from you about this.

In addition to material from the speakers' presentations, this report also includes material from the evaluation of
the attendees' opinions about the Forum and their concerns about the implications for their communities. The
latter is important to COAH, as the purpose o f the Forum was not only to "inform" these W N C community
leaders about the issues, but to also "activate" them to offer their comments and concerns to your Office during
the review o f the proposals for the M H sale and organization o f the Dogwood Health Trust.

On assumption that the opinions of these community leaders is important to you too, I am enclosing for your
review and consideration the full report o f the data, which represents 2/3rds o f all participants. It is included in
two additional files. The first is the summary tables and bar graphs describing the results; the second contains
the individual 53 responses, which allows your team to review all comments entered into open text boxes.

In all o f COAH's correspondence with the Forum attendees it has repeatedly encouraged them to communicate
with your Office using the link you provided. This is included in the summary report and multiple times
throughout the evaluation instrument.

I have today also shared the summary report with Dr. Ball and offered to share with him the summar>' data
report as well. Regarding the latter, I invited him to sit down to discuss these data and what might be the
implications for D H T as it further pursues forming its governance.

Please feel free to call on me and COAH's Board members i f we can be o f assistance. We intend to continue to
encourage local leaders to offer their comments to your Office and C O A H itself w i l l file its formal comments
about the plans proposed for DHT's governance and mission.

Bill
WNC Conversion Health Foundation Forum
August 3, 2018

Summary Report
Introduction
A public forum of community leaders from 18 WNC counties was convened August 3, 2018 to
accomplish two objectives. First, this Forum was designed to inform these local leaders about
"conversion" health foundations and the proposal for establishment of one to advance the
health status of WNC residents (the Dogwood Health Trust). Second, the program and related
communications were structured to activate these leaders to inform the NC Attorney General's
Office with their guidance and concerns for that Office's attention during its formal review
process anticipated during September-November, 2018.

This Forum was sponsored and convened by COAH- Communities for Older Adult Health, a
small, nonprofit think tank focused on health policy issues affecting older adults, in partnership
with: Elder Law Carolina, OLLI (Osher Lifelong Learning Institute) at UNC Asheville, and
SEARCH (Sustaining Essential and Rural Community Healthcare).

Following are the key "take aways" shared by the Forum speakers with emphasis on their
guidance for success in launching a new health foundation targeted to improve the health
conditions in WNC. Also included is participants' feedback about what they learned and
actions they plan to take based on their Forum experience with focus on their plan to
communicate with the NC Attorney General's Office.

You are encouraged to communicate your opinions, concerns, and questions about the planned
"conversion" health foundation, the Dogwood Health Trust, with the NC Attorney General
through its web-based consumer comment page at:
http://www.ncdoi.gOv/complaint#Coniplain%200nline

For further information about this Forum and this report, please contact: coah.avl@amail.com

Experienced Based Lessons


Ciii Dellinaer. RN. is Clinic Supervisor for a public health clinic serving rural Mitchell County. She
set the stage for this Forum by describing her County's many critical clinical and public health
needs, placing them in the context of social determinants of health (SDOH). Offering the
audience a primer on SDOH, she noted that consistently communities like hers face a tightly knit
web between institutional and socio-economic forces that create and sustain health inequities.
She also pointed out that when using a SDOH model, the "causes" and the "effects" can be in
both directions (e.g., suffering poor health status can impair a populations' capacity to
successfully participate economically in a community, as well as being economically
marginalized can negatively affect the health of that community).

To illustrate the impact of SDOH's on community health in her rural county Ms. Dellinger
described the circumstances of three recent client families with whom her clinic is working.
Across each of these examples the challenging SDOH's such as a lack of reliable transportation.
the absence of adequate housing, marginal incomes from low skill jobs, an unavailability of
affordable, quality food sources, all combined to form an unrelenting web of negative effects.
She described how her clinic worked with very limited resources to attempt untangling the
effects of this web on each of her client families.

She noted that in rural communities many families facing these SDOH's often cope through local
support of extended families and churches. However, many of her clients are relative
newcomers without access to such social supports. Her clinic's success improving the health of
these families is more challenging and often requires financial and social resources unavailable
to her program. She looks forward to the prospect of added financial resources to help her
community improve many of these SDOH's and, thereby, facilitating the success of her work.

Kimberlv Stravolo, CPA, has served for five years as Vice President of the Mary Black
Foundation (MBF), a foundation established in 1996 from the conversion of the net proceeds of
a nonprofit hospital's sale to a for profit entity in Spartanburg County, South Carolina. As a result
of careful stewardship, creative leveraging, and local collaborations, MBF has disbursed $51
million to benefit its local community while growing its asset base to $83 million.

While MBF's initial grant making had a positive impact, it lacked a clear focus. In 2003 its Board
chose to focus on three initiatives: early childhood development, healthy eating/active living, and
a "community health fund" with 80% of its investments in the first two initiatives. A consistent
aspect of its work has been collaboration with other funders, grantees, and the community
members of neighborhoods it targeted for improvements. Kim described MBF's facilitation of
listening sessions in which local residents discuss their neighborhood's needs. This, then,
become an assessment forming the basis of grant requests. This process allows local
community members to both find their voice and join together in crafting solutions.

In 2017 MBF sought to have a deeper impact on health equity through its grant making. It
pursues this by assessing the effects of its work on health disparities. MBF continues to leverage
its human, financial, social, and reputational capital to advance its mission.

Karl Stauber. Ph.D.. has spent forty years in philanthropy, the last eleven years as CEO of the
Danville Regional Foundation (DRF). The DRF was formed in 2005 as a conversion of the net
assets from the sale of nonprofit hospital once serving a rural, three county area. DRF is
engaged in a broad program related to improving the social determinants of health by
developing the region's economy, institutional capacity, education, and community wellness.
DRF has net assets of over $200 million and annual expenditures of over $10 million. DRF
maintains an ongoing effort to evaluate its progress advancing SDOH's by reviewing data
reflecting changes in: education, socioeconomics, and health.

Dr. Stauber offered his opinion that, when done well, conversion health foundations can be a
significant, positive force in a community. However, he quickly added, to be effective, conversion
health foundations need to be in the transformation business, not the happiness business.

Based on the above principle and his understanding of plans to create the Dogwood Health
Trust (DHT), Dr. Stauber offered eight lessons to the WNC and DHT leaders.
For the WNC Community Leaders:
1. You have a "Voice", not a "Vote"- He noted the sale of Mission Health is a regulated
transaction between two private corporations, overseen by NC Attorney General and
IRS. He advised community leaders to organize to have an effective voice.
2. Move from "Opposition" to "Proposition"- Those present seeking to improve their
communities need to speak up effectively, which requires moving from a posture of
opposition to one of offering propositions.
3. Charity to Philanthropy- Recognize there will not be enough money from the net
proceeds of the Mission Health sale to meet all of WNC's SDOH-related needs.
Consider charity and philanthropy are on either end of a continuum, where charity
reduces suffering, but philanthropy reduces the causes of suffering. Community
leaders, including DHT, need to be clear about what they want this foundation to be.
4. Build Across the Cultural Divides- WNC is weakened by its cultural divides. The
proposed DHT offers WNC its best opportunity in decades to band together communities
around common goals to improve their SDOH's. This strategy requires crafting unique,
locally responsive approaches, which cannot be "plug and play" or "one size fits all."

For the Dogwood Health Trust Leaders:


1. People believe what you do, not what you say- If you want people to believe you,
make sure what you do and say are the same. Your first "do" is, who you put on the
Board of DHT? Second is, who you hire as CEO? Third is, do you listen? You need to
align "doing" and "saying": if not, you build cynicism and distrust.
2. You can not buy trust, you must earn it- You will earn trust by listening and
collaborating. DHT must build trust, as without trust, there is much reduced impact.
3. Money is necessary, but not sufficient- Partnering is critical. Start by accepting that
communities know more than you do about their communities. DHT will not succeed
without community buy in.
4. Approach formation of DHT as a new start-up, not a succession of Mission
Health. The first Board is critical. No more than 50% of the board should be from the
current or past Mission Health board.

Dr. Stauber was asked by an audience member, 'how did DRF create its initial board?' He
shared that it was done with significant guidance from an outside advisor, the nonprofit
consultancy, MDC. Further, he noted the founders determined less than half DRF's board would
include members of the sold hospital's board, adding that, they should be "thick skinned" people
able to take criticism. Also, it was determined that to maintain a focus on DRF's mission, no one
representing a specific constituency, especially not a current elected official, should sit on the
DRF board. He noted that the DRF board included, 'a mixture of people of privilege and those
suspicious of privilege', a mixture he recommended for DHT as well.

Status and Plans of the Dogwood Health Trust


John Ball. MP. JD. Chair of Mission Health, was invited to offer "Observations about a Possible
Path Ahead", given his role in the formation of the Dogwood Health Trust (DHT).
Dr. Ball began his remarks, "I am an active listener". He then offered his appreciation for the
advice of Ms. Stravolo and Dr. Stauber, which he summarized as: be strategic, work through
local agencies, go slowly, take risks, have metrics, and look for outcomes.

He reported that the mission of DHT is "to dramatically improve the health and well-being of the
people and communities of Western North Carolina" and will work toward this through other
nonprofits, i.e., DHT is not an "operational" foundation. Eventually, he reported, there are to be a
total of between 11 and 15 DHT board members. He shared that DHT's initial board is made up
of six members at present- three are present board members of Mission Health and three are
former board members of Mission Health. DHT's plans are to draw additional board members
from a three six-county division of the 18 WNC counties. He noted that one had been chosen
from the eastern segment and two from its western segment. He stressed that board members
will represent the interests of the entire WNC region and that there is a commitment to "diversity"
in the recruitment of DHT board members.

Dr. Ball reported that DHT would have responsibility to monitor HCA's compliance with the
Mission Health sale agreement. An audience member suggested funding an independent entity
to accomplish this without distracting the DHT board. He stated he believed only DHT would
have the assets to enforce contract compliance should that be necessary.

Overview of the NC Attorney General's Review Process


Jennifer Harrod. JD. Special Deputy Attorney General from the NC Department of Justice began
her remarks noting her Department has no review role until there is a proposed transaction for
the sale of Mission Health, which had not yet occurred.

She noted that NC's Non-Profit Corporations Act requires that the AG be given a 30-day notice
of the proposed sale prior to its conclusion and, as part of that notice, provided all necessary
documentation required by the AG. Until all such documentation is received, this period does not
begin. The AG may seek an additional 30-day period to complete its review of the
documentation. The AG will retain outside consultants to assist it in review of documents and to
determine if the sale price represents fair market value. Ms. Harrod noted the AG has a relatively
narrow role in reviewing the proposal for the conversion health foundation. Her Office will review:
proposed board composition relative to its service area, appropriate stewardship over assets,
transparency of process, that is mission continues substantially that of Mission Health, and that it
is independent of the purchasing entity, HCA.

Ms. Harrod was asked several questions from the audience. Asked what community leaders
should be paying attention to she offered: DHT's transparency, accountability, and that it listens
to the community. Asked when DHT related documents become public, she responded that
there is presently no process to make the public, to which the audience by acclamation showed
support for them being made publicly available. Asked what feedback the AG seeks from
community leaders about the proposed formation of DHT, she asked the audience realize this is
an unusually large transfer of assets unlike any her Office has handled. She invited them to offer
all comments, questions, and complaints to her through use of the AG's "complaint" web facility
(noting that incoming communication to this page is logged in and responses are tracked) at:
http://www.ncdoi.gOv/complaint#Complain%200nline
Forum Participants' Evaluation
The evaluation of the Forum's success is based on a review of registration data and a formal
post-event evaluation sent attendees within two weeks of the event. A total of 53 completed
evaluations were received, a response rate of 64%. The evaluation data indicate the Forum
made significant progress toward its two goals: a) inform WNC community leaders about
conversion health foundations, including the proposal for establishing the Dogwood Health
Trust and b) activate these leaders to inform the NC Attorney General's Office with their
guidance and concerns for that Office's attention during its review process.

Reaching WNC Community Leaders- Of the 95 participants in the Forum, 77 were registered
attendees (the balance were speakers, press, and representatives of the sponsor coalition's
organizations). Attendees represented two-thirds of the 18 WNC counties. Of these attendees,
12% were elected officials, 22% were executive and clinical public health staff, 17% were
employed by other nonprofits delivering services in WNC, and 13% were citizen community
advocates.

Informing WNC Community Leaders- In response to "Did the Forum increase your knowledge
of "conversion" health foundations?" 91% responded yes. "Did the Forum increase your
knowledge of Dogwood Heath Trust's (DHT) plans to set up a "conversion" health foundation
for management of the net proceeds from the proposed sale of Mission Health?" 90%
responded yes.

Community Leaders Intention to Offer Guidance/Concerns to the NC Attorney General about


DHT- 52% responded they planned to share comments and 48% responded either "no" (12%)
or "not sure" (36%).

Of those planning to offer comment to the AG's Office, the most frequent reasons selected
were: "Need for transparency of all documents related to the formation of DHT" (85%), "Need
for active oversight by the AG during the initial formation of DHT" (74%), ""Need for public
review and comment about he proposed DHT governance structure" (70%), "Who determines
which applicants are selected to become board members" (70%), and "Who determines the
criteria for selection of board applicants" (67%).

Of those not planning to offer comment to the AG's Office (or, were unsure), the most frequent
responses were: "Not enough information; just do not know enough to make comment" (35%),
"My organization may be seeking financial support from DHT, so do not wish to appear critical"
(22%), "Believe DHT's goals and governance plans are acceptable, so I have no concerns or
comments" (22%).

Community Leaders Request for Added Assistance Exercising their Role- 94% of respondents
selected responses describing assistance that would help them exercise their roles as a
community leaders regarding the formation of DHT. The most frequent response choices were
(multiple selections were permitted): "DHT leaders meeting locally with our community to
discuss and seek our input about its plans" (78%), "Future DHT board meetings announced by
public posting and being open to the public" (68%), "Local hearings by the AG for review and
comment about plans for the formation/implementation of DHT" (68%), "On line public access
to key documents about the formation and governance of DHT for my community's review in
order to determine if we need to make comment to the AG's Office during its review" (64%).

Throughout the evaluation survey document and collateral communications, participants were
reminded of Special Deputy Attorney General Harrod's invitation to them to communicate their
opinions, concerns, and questions about the planned "conversion" health foundation, the
Dogwood Health Trust, with the NC Attorney General through its web-based consumer comment
page at:
http://www.ncdoi.gOv/complaint#Complain%20Qnline

Post Event Notes


On August 23rd DHT announced its first nine directors of a board that will number between 12 to
15 members. Its Chair, Janice Brumit noted, "when selecting Board members, we've taken into
account skill, competence, willingness, time and capacity to serve as well as geographic
diversity." Of these nine directors, three are current and three are former members of Mission
Health's board; also, two of the nine have served on boards of Mission hospitals. The
announcement noted that the DHT would only, "become operational if the contemplated
transaction between HCA Healthcare and Mission Health is finalized."

On August 31st Mission Health announced HCA had "entered into a definitive agreement for
HCA to acquire Mission Health" and that HCA had "agreed to pay approximately $1.5 billion for
the assets of Mission Health system." Mission reported that the proceeds of the sale would be
transferred to the DHT. It also stated it was forwarding the agreement to the NC Attorney
General for review.

Rev, 090718
(AP: the following material on this first page is for the cover email to be sent out to only the "A" and "T" Aug. 3 participant
codes. The following seven pgs. contain the material to appear on the seven Survey Monkey frames in sequence.)

To: F Name, L Name


Fr: Bill O'Connell, President, COAH

Subject: WNC CNF Forum Evaluation

Communities for Older Adult Health (COAH) and its partners sponsoring the August 3rd WNC Conversion Health
Foundation Forum thank you for your participation.

We offer you two ways to continue your participation.


^ First, please help COAH assess the value you received from this Forum by answering four short questions. Your
response to the enclosed evaluation is completely anonymous.
^ Second, COAH supports the NC Special Deputy Attorney General's invitation for you to offer comments and
feedback. The AG will consider your comments during the upcoming review of the initial governing structure and
goals proposed by Dogwood Health Trust. Please share your comments at:

http://www.ncdoi.gOv/complaint#Complain%200niine

Once we receive your response to the enclosed survey, COAH will send out a summary of the Forum's presentations.

End.
WNC Conversion hiealtli Foundation Forum

Follow Up Evaluation

Communities for Older Adult Health (COAH) and its partners in sponsoring the August 3rd WNC Conversion Health
Foundation Forum at UNC Asheville, thank you for your participation. We believe there is the potential for Dogwood
Health Trust (DHT- the "conversion" foundation for management of the net proceeds of the sale of Mission Health) to
create significant advancement in the public health of our region.

We invite you to be actively engaged in DHT's initial formation and progress.

COAH supports Jennifer Harrod's, the NC Special Deputy Attorney General, invitation to offer comments and feedback.
The AG will consider your comments during its upcoming review of the initial governing structure and goals proposed by
Dogwood Health Trust. Please recall Ms. Harrod advised use of the DOJ's "Complaint" process for this purpose] so, you
may most effectively share your comments at:

http://www.ncdoi.gOv/complaint#Complain%200nline

Now, please help COAH assess the value you received from this Forum by answering four short questions. Your
response is completely anonymous; neither COAH, nor anyone else, will have access to your identify.

Bill O'Connell, President, COAH

(continue)
1. Did tlie Forum increase your knowledge of "conversion" health foundations?

O Yes O No O No Opinion

2. Did the Forum increase your knowledge of Dogwood Health Trust's plans to set up a "conversion" health foundation for
management of the net proceeds from the proposed sale of Mission Health?

O Yes O No O No Opinion

(continue)
3. Do you plan to share comments with the AG's Office about the formation of the "conversion" health foundation,
Dogwood Health Trust?

O Yes O No O Not Sure

(continue)
(AP: set up skip pattern to here for #3, "yes" responses)

Which of the following is likely to be the focus of your connments to the AG's Office? (choose all that apply)

o DHT plans to divide WNC into three sub-regions of counties for board member selection
o Formative six member board are either current or past Mission Health Board members
o Plan to have a total of 11-15 total board members
o Who determines which applicants are selected to become board members
o Who determines the criteria for selection of board applicants
o Intention for DHT to "police" HCA's adherence to the Mission Health sale contract
o Need for transparency of all documents related to the formation of DHT
o Need for public review and comment about the proposed DHT governance structure
o Need for active oversight of the AG during the initial formation of DHT
o Other

(continue)
(AP: set up skip pattern to here for #3, " n o " and "not sure" responses)

If you are not sure or choose not to make comment to the AG's Office, we invite you to share why (choose all that apply)

o Not enough information; just do not know enough to make comment


o Prefer to wait until DHT is up and running before offering any feedback
o Believe DHT's goals and governance plans are acceptable, so I have no concerns or comments
o My organization may be seeking financial support from DHT, so do not wish to appear critical
o Community health issues and DHT's work on them is simply not a high priority issue for me
o Other

(continue)
What added assistance would help you exercise your role as a community leader regarding the formation and
implementation of the "conversion" health foundation?

o More news articles


o Periodic emails about developments
o On line public access to key documents about the formation and governance of DHT for my community's review
and determination if we need to make comment to the AG's Office during its review
o Local hearings by the AG for review and comment about plans for the formation/implementation of DHT
o DHT leaders meeting locally with our community to discuss and seek our input about its plans
o Future DHT board meetings announced by public posting and being open to the public
o Other

(continue)
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WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q1 Did the Forum increase your knowledge of "conversion" healtii


foundations?
Answered: 53 Skipped: 0

Yes

No

I
No Opinion

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


90.57% 48
Yes
5.66% 3
No
3.77% 2
No Opinion
TOTAL 53

1 17
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q2 Did the Forum increase your knowledge of Dogwood Health Trust's


plans to set up a "conversion" health foundation for management of the
net proceeds from the proposed sale of Mission Health?
Answered: 52 Skipped: 1

Yes

No

No Opinion

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


90.38% 47
Yes
9.62% 5
No
0.00% 0
No Opinion
TOTAL 52

2/7
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q3 Do you plan to share comments with the AG's Office about the
formation of the "conversion" health foundation, Dogwood Health Trust?
Answered: 52 Skipped: 1

Yes

No

•tvS-'+n,-', : •;
Not sure
• ..f ,;?! q

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


51.92% 27
Yes
11.54% 6
No
36.54% 19
Not sure
TOTAL 52

3/7
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q4 Which of the following is likely to be the focus of your comments to


the AG's Office? (choose all that apply)
Answered: 27 Skipped; 26

DHT plans to
divide WNC i...

Formative six
member b o a r d -

Plan to have a
total ofll-...

Who determines
which...

Who determines
the criteria...

Intention for
DHT to "poll...

Need for
transparency...

Need for
public revie...

Need for
active...

Other (please
specify)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


22.22% 6
DHT plans to divide WNC into three sub-regions of counties for board member selection
62.96% 17
Formative six member board are either cun-ent or past Mission Health Board members
11.11% 3
Plan to have a total of 11-15 total board members
70.37% 19
Who determines which applicants are selected to become board members
66.67% 18
Who determines the criteria for selection of board applicants
37.04% 10
Intention for DHT to "police" HCA's adherence to the Mission Health sale contract
85.19% 23
Need for transparency of all documents related to the formation of DHT
70.37% 19
Need for public review and comment about the proposed DHT governance structure
74.07% 20
Need for active oversight of the AG during the initial formation of DHT

51.85% 14
Other (please specify)

4/7
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Total Respondents: 27

5/7
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q5 If you are not sure or choose not to make comment to the AG's
Office, we invite you to share why (choose all that apply)
Answered: 23 Skipped: 30

Not enough
information;...

Prefer to wait
until DHT is...

Believe DHT's
goals and...

My
organization...

Community
health issue...

Other(please
specify)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


34.78%
Not enough information; just do not know enough to make comment
17.39%
Prefer to wait until DHT is up and running before offering any feedback
21.74%
Believe DHT's goals and governance plans are acceptable, so I have no concerns or comments
21.74%
My organization may be seeking financial support from DHT, so do not wish to appear critical
4.35%
Community health issues and DHT's work on them is simply not a high priority issue for me
17.39%
Other (please specify)
Total Respondents: 23

6/7
WNC Conversion Health Foundation Forum Attendee Survey SurveyMonkey

Q6 What added assistance would help you exercise your role as a


community leader regarding the formation and implementation of the
"conversion" health foundation?
Answered: 50 Skipped: 3

More news
articles

Periodic
emails about...

On line public
access to ke...

l-ocal hearings
by the AG fo...

DHT leaders
meeting loca...

Future DHT
board meetin...

Other (please
specify)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES


32.00% 16
More news articles
54.00% 27
Periodic emails about developments
64.00% 32
On line public access to key documents about the formation and governance of DHT for my community's review and
determination if we need to make comment to the AG's Office during its review
68.00% 34
Local hearings by the AG for review and comment about plans for the formation/Implementation of DHT
78.00% 39
DHT leaders meeting locally with our community to discuss and seek our input about its plans
68.00% 34
Future DHT board meetings announced by public posting and being open to the public
20.00% 10
Other (please specify)
Total Respondents: 50

7/7
S T A T E OF N O R T H C A R O L I N A CONSUMER PROTECTION
JOSH STEIN DEPARTMENT OF JUSTICE TOLL-FREE IN NC: 8 7 7 . 5 6 6 . 7 2 2 6
ATTORNEY GENERAL 9001 MAIL SERVICE C E N T E R OUTSIDE OF NC: 9 1 9 . 7 1 6 . 0 0 0 0
FAX:
RALEIGH, NORTH CAROLINA 2 7 6 9 9 - 9 0 0 1 919-716.6050
WWW.NCDOJ.GOV

November 27, 2018

M r . William O'Connell
3 Ridge Terrace
Asheville, N C 28804

Dear M r . O'Connell:

Thank you for contacting me regarding the proposed sale of Mission Health to H C A HealthCare,
Inc. It is good to hear from you.

Earlier this year H C A Healthcare announced its intent to pay $1.5 billion to acquire Mission
Health. The acquisition terms of the agreement require that H C A Healthcare spend $450 million
in capital expenditures and contribute $25 million to an innovation fund that would invest in new
methods to provide healthcare. As you know. Mission Health currently operates six hospitals and
is an important part o f healthcare in western North Carolina. The proposed deal has raised
concerns about the long-term effects o f Mission Health's potential conversion to a for-profit
entity.

Under North Carolina law, my office must review the proposed sale o f Mission Health to H C A
Healthcare. A t this time, my office is still working with Mission Health Hospital to ensure that we
have received all necessary information to review their proposed transaction. Once we receive all
necessary information, we w i l l carefijlly review it.

Comments like yours provide critical feedback that ensure we hear the full range o f issues. Y o u
can. rest assured that your correspondence w i l l be included in our file and w i l l assist in the
thorough review o f this proposed acquisition.

I hope this information was helpful. Again, thank you for contacting me, arfd please continue to
stay in touch on matters o f concern.

Sincerely,

Josh Stein
Aftomey General of North Carolina

JS/tms

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