Letter indicates state leaders knew of hospitals’ dire straits

CHARLESTON — According to a letter sent by the vice president of the Ohio Valley Medical Center, West Virginia officials in Charleston had nearly a 25-day notice about the impending closure of Alecto Healthcare’s two medical facilities in the Ohio Valley.

In a letter sent to Gov. Jim Justice on Sept. 2 — the day before Alecto announced that all acute care and emergency services at OVMC in Wheeling and East Ohio Regional Hospital in Martins Ferry would cease — OVMC Vice President Michael Sarrao wrote that the governor had suggested the state buy OVMC and have WVU Medicine run the hospital.

Justice, U.S. Rep. David McKinley, R-W.Va., and WVU Medicine had been negotiating with OVMC for WVU Medicine — the managers of Wheeling Hospital — to take over the mental health and psychiatric services offered by OVMC. Those negotiations broke down Sept. 3 after Alecto announced the end of emergency and acute health services.

In the Sept. 2 letter, Sarrao wrote Justice to provide additional information on the issues facing OVMC and to seek the governor’s intervention in the matter.

“While we understand that you have met with Congressman McKinley and representatives of WVU Medicine to discuss OVMC, we have not been offered the opportunity to meet with you, despite requests to do so, to discuss the future of OVMC and how access to healthcare and jobs at OVMC can be saved,” Sarrao wrote.

OVMC and its Ohio sister hospital were purchased by Alecto Healthcare in 2017. Sarrao blames the recent closures of the two hospitals to declining patient volumes, increasing payroll expenses, and the recruitment of doctors away from Alecto’s Ohio Valley hospitals by Wheeling Hospital. The U.S. Department of Justice has accused Wheeling Hospital — owned by the Wheeling-Charleston Diocese and now managed by WVU Medicine — of a kickback scheme paying off doctors and offering incentives.

OVMC also blames slow Medicaid reimbursements and supplemental payments from the state. All told, Sarrao said that OVMC and EORH lost more than $37 million in two years, resulting in the closures of both hospitals. Alecto has been searching for 12 months for a strategic partner to take over the facilities with no luck. That’s when hospital officials turned to the state.

According to Sarrao, hospital officials met July 15 with Bill Crouch, secretary of the state Department of Health and Human Resources, explaining the issues both hospitals faced and warning that they could close — 24 days before Justice said he was caught off guard by the announced closing.

“While Secretary Crouch listened to OVMC’s and EORH’s representatives, he did not offer any solutions and did not seem overly concerned about the closure of OVMC and the loss of jobs associated with such a closure,” Sarrao wrote.

On Aug. 7, Alecto provided notice to DHHR’s Office of Healthcare Facility Licensure and announced they would close both Ohio Valley hospitals. In a phone interview Aug. 8, Justice said he was briefed that morning by Crouch on the closures.

“I think it caught us all a little off guard,” Justice said at the time. “We need to do a lot to somehow find a way in order to be able to protect and keep those 1,200 jobs.”

Sarrao lists a meeting with 15 elected officials Aug. 19 on how to preserve the emergency, acute care, and psychiatric services provided by OVMC. He also detailed Rep. McKinley’s efforts to save the facilities, including teaming Alecto with WVU Medicine, including an Aug. 20 meeting between McKinley, Justice, and representatives of WVU Medicine.

Alecto was notified Aug. 27 that WVU Medicine would be the lead negotiator and began discussions with the owners of the OVMC property, Medical Properties Trust.

“We understand that you suggested that the State provide funding to buy OVMC and have WVU Medicine run the hospital,” Sarrao wrote to Justice. “Although we were disappointed that your office would not be taking the lead, we immediately connected WVU Medicine and MPT so substantial discussions could begin.

The negotiations between Alecto and WVU Medicine broke down Sept. 3 after WVU Medicine made an offer to lease two buildings housing psychiatric services for 12 months. MPT, an Alabama-based company, wanted a longer lease.

“Needless to say, we were disappointed to learn that WVU Medicine is only interested in operating the psychiatric units for only 12 months and that your office was apparently taking a back seat in trying to save OVMC,” Sarrao wrote to Justice.

Sarrao laid out several solutions to Justice on how to save OVMC, including providing a $30 million loan to fund the purchase of OVMC real estate from MPT and allow an operator, such as WVU Medicine, to manage the facilities. Sarrao also encourages the state and WVU Medicine to lease the entire OVMC campus for between 3-5 years for $2 million per year.

“Despite media reports to the contrary, we understand that WVU Medicine has proposed to lease only the buildings where psychiatric services are provided and to lease them for only 12 months,” Sarrao said. “This is hardly the solution that has been touted in the media.”

As a final option, Sarrao said Wheeling Hospital and the Wheeling-Charleston Diocese could use the profits made by Wheeling Hospital and purchase OVMC outright. Sarrao claims that Wheeling Hospital has an annual profit of approximately $30 million per year.

“This would seem to (be) the most equitable solution and would also promote the healing that Bishop (Mark) Brennan is seeking because the problems faced by OVMC today are due in large part to conduct by Wheeling Hospital, which (is) owned by the diocese and for which key leaders of the diocese were actively aware and involved,” Sarrao wrote.

At the end of August, 736 employees at OVMC and 343 employees at EORH received Worker Adjustment and Retraining Notification (WARN) notices. WVU Medicine has already hired 100 displaced workers with more expected to be hired.

A request for comment from McKinley was not returned.


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