A new settlement agreement between Jennie Stuart Medical Center’s governing board and the group Save Jennie Stuart has cleared the hospital board to approve Jennie Stuart’s acquisition by Evansville, Indiana-based Deaconess Health.
On Wednesday, Feb. 26, Christian Circuit Judge Andrew Self signed an order modifying the Dec. 20 settlement agreement between Save Jennie Stuart and the hospital and its board members. The original agreement required the hospital board to delay any acquisition agreement until the end of March.
Save Jennie Stuart, comprised of several former hospital board members and other community members who oppose a Deaconess deal, announced the new settlement agreement Monday.
‘More favorable terms’ remain unclear
A press release from Save Jennie Stuart states that the lawsuit it filed resulted in the Dec. 20 mediation, which led to an effort to obtain “more favorable terms for the sale” of Jennie Stuart.
“As a result of the SJS efforts, Deaconess did make an offer of a deal on more favorable terms to the community,” the release states. “That proposal was supported by the Jennie Stuart Board and was agreed to by SJS on Feb. 26.”
Those terms have not been made public. It is also not clear when Jennie Stuart’s board will vote on the acquisition — or if the vote has already occurred.
Hoptown Chronicle reached hospital board chair Leslie Carroll late Monday afternoon, and she declined to answer questions about the timing of the board’s possible actions following Self’s approval to modify the settlement.
“We are not making any further comments at this time,” Carroll said.
Community opposition and a push for transparency
When community members first learned in mid-September that the hospital might be acquired, local opposition to a possible deal between Jennie Stuart and Deaconess developed around a couple of key points. One point of contention was the fact that Jennie Stuart’s ownership would be transferred to Deaconess without any a payment to the local community for the value of Hopkinsville’s hospital. In addition, community members complained that the transfer was too secretive, preventing a fuller understanding of the terms until the deal would have been completed.
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Save Jennie Stuart member Dan Kemp, who previously served on the hospital board and as Hopkinsville’s mayor, shed some light on the most recent settlement agreement, which resulted in the lawsuit being dismissed with prejudice (meaning it is permanently dismissed and cannot be brought back).
Deaconess to invest more in Jennie Stuart Foundation, hospital IT
Kemp told Hoptown Chronicle that Deaconess agreed to put another $5 million into the Jennie Stuart Foundation over a period of several years. That would be in addition to $5 million Deaconess had already agreed to invest in the foundation.
Carter Hendricks — one of three board members, along with Steve Tribble and Deanna Sova, who initially opposed the Deaconess acquisition — was able to negotiate the additional $5 million, said Kemp.
But there were concerns that Deaconess might not follow through with that money for the foundation if Save Jennie Stuart continued to press for more concessions, said Kemp.
Kemp said the entire process needed more transparency for the community but eventually Save Jennie Stuart didn’t want to be blamed for losing an improved deal for the hospital, he said. Deaconess also agreed to invest $5 million for improvements in information technology.
Major problems with IT helped spur the hospital board to consider letting a larger hospital group acquire Jennie Stuart.
The terms were negotiated through a series of emails back and forth between attorneys representing the different parties, said Kemp.
While Hendricks, Sova and Tribble were previously listed in the lawsuit as “opposing directors” for the hospital and had separate legal counsel, they eventually aligned with the full hospital board, said Kemp. That development apparently weakened Save Jennie Stuart’s ability to continue the legal fight.
“Although the members of SJS continue to oppose the takeover and mourn the loss of Jennie Stuart’s assets to an Evansville-based health care conglomerate, they hope the takeover will result in better medical care for the community and a continuation of the charitable contributions made by Jennie Stuart to the community over the years,” the group’s press release concludes.
Others in the community, including several physicians, were early advocates for a Deaconess acquisition. Among proponents were Dr. Keith Toms, the chief medical officer who wrote an opinion article outlining his position, and Dr. David Kabithe, a general surgeon. He also wrote an opinion piece.
Jennifer P. Brown is co-founder, publisher and editor of Hoptown Chronicle. You can reach her at editor@hoptownchronicle.org. Brown was a reporter and editor at the Kentucky New Era, where she worked for 30 years. She is a co-chair of the national advisory board to the Institute for Rural Journalism and Community Issues, governing board past president for the Kentucky Historical Society, and co-founder of the Kentucky Open Government Coalition. She serves on the Hopkinsville History Foundation's board.
