Kevin Holland is finally leaving Singing River Hospital. What Gives?

Tuesday a week ago Slabbed was leaked that Singing River CEO Kevin Holland would either be resigning or be fired at the following day’s Board of Trustee meeting. Slabbed put out a tweet on the subject which we were asked to subsequently delete – you had to be there to win. Sure enough Karen Nelson would break the news on Thursday that Holland was leaving and that gets me back to the head-scratcher on being asked to delete the Tweet that Holland would be leaving because the fact that segments of the Jackson County Board of Supervisors were unhappy with Holland’s job performance has been very well reported in both the newspapers serving the area. Looking back at the events of last week there was something else going though which a perusal of Mississippi Electronic Courts revealed:

Notice of Depo CA by Slabbed on Scribd

But before we examine the context of Chris Anderson’s upcoming deposition we need to circle back to Karen Nelson’s account of the FY 2016 audit:

Singing River Health System dropped from a Level 2 to a Level 3 trauma rating when it cut back on neurological services, and the hospital system is no longer majority owner of its two outpatient surgical centers.

But Chief Financial Officer Brian Argo told Jackson County elected officials on Monday that the health system is cutting costs and is continuing toward financial recovery with a profitable year.

Argo went over the annual independent audit, this year by Dixon Hughes Goodman, which confirms the county hospital system ended the fiscal year on Sept. 30 with a positive bottom line of $5.1 million.

Looking at the audit report linked above I’m not sure where the $5.1 million dollar number comes from but I did see about a third of the consolidated net income was derived from the sale of assets inside a not for profit “blended component unit” called “SHRS Ambulatory Services“:

SRHS Ambulatory Services, Inc. (“SRHSAS”) is a component unit of the Health System and is presented as a blended component unit as of September 30, 2016 in the Health System’s financial statements. As the sole member of this not-for-profit organization, the Health System exerts control and has a financial benefit relationship. SRHSAS is operated by a Board of Directors, all of whom are appointed by the Health System’s Board. As of September 30, 2016, SRHSAS holds a non-controlling 24.5% ownership interest in two ambulatory surgery centers, Mississippi Coast Endoscopy and Ambulatory Surgery Center, LLC (“MCEASC”) and Ocean Springs Surgical and Endoscopy Center, LLC (“OSSEC”). Prior to a sale of controlling interest in the year ended September 30, 2016, SRHSAS was the 51% owner of MCEASC and OSSEC, both of which were consolidated subsidiaries of SRHSAS at September 30, 2015. See further discussion of the sale of controlling interest and deconsolidation of MCEASC and OSSEC at Note 16. All significant intercompany transactions have been eliminated.

Along those lines there is another blended component unit called Anesthesia Services, LLC, which has a super massive revenue recognition “material weakness” of the variety that I can image would give most health care financial professionals a Myocardial infarction but that is another post. I will add there have been rumors about that particular operation circulating for at least two years.

Now back to Ambulatory Services because back in March of this year it filed suit against Pine Haven Group, LLC seeking to undo a land transaction to which it was a party all the way back in December 2007. I’m not a lawyer but examining the docket in the case caused me to scratch my head a time or two. Real Estate law is its own special breed of law so maybe the theory of recovery would make sense to a specialized legal practitioner but it makes no sense to me. Below is the original complaint, which has since been amended to include the title insurer as a made defendant:

1-main by Slabbed on Scribd

Almost immediately after the original answer was filed, Ambulatory Services filed a Motion for Summary Judgment (MSJ) which was one of the major causes of my head scratching. The MSJ was repeated after the first amended complaint and answer/counter-claims were filed. I completely fail to see how the MSJ survives except for the fact that the parties are conducting some discovery to brief the issue and that discovery involves deposing the greatest heel in the entirety of the SRHS pension meltdown saga, former SRHS CEO Chris Anderson, the notice of which is embedded above.

Before we go any further we need to circle back to Karen Nelson’s account of the 2016 audit presentation because it has some more important clues provided by the current CFO:

The big concern is capital needs for the two-hospital system that includes Singing River in Pascagoula and Ocean Springs Hospital.

He said the former leadership team of SRHS failed to invest back into the system.

He said that as the hospitals move forward, any “free cash flow” will go to making needed repairs and maintenance.

As a fellow financial professional I can translate the former statements in a less charitable way:

“We are making our profit off deferred maintenance.”

This would in turn explain why the County Supervisors were the ones asking the most question during the presentation which also revealed one other problem:

Argo said the hospital system has a plan to absorb what could be up to $2 million in legal fees it amassed in fighting retirees over the failed pension plan. It has racked up $3 million in costs, but its insurance company recently won a decision in federal court that coverage stopped at $1 million. Argo said SRHS is appealing the decision.

In a quick update on the pension plan, he told supervisors the SRHS pension liability increased from $304 million last fiscal year to $333 million because of changes in investment returns, administrative expenses and a lack of payments into the system. Administrative costs have increased from roughly $350,000 to $700,000.

New pension trustee Steve Simpson sure sounds expensive but that is also another post folks. For all the rosy talk about a turnaround at the end of the day the Hospital System was simply another year older and deeper in debt and this gets me back to the lawsuit SRHS Ambulatory filed against Pinehaven because I have a pet theory but to set it up we need to examine a piece of evidence introduced in the case in the form of a letter written by the Title Insurance Company’s Senior Claims Counsel which summarizes some of the key events in the unfolding saga:

LF Title Insurance by Slabbed on Scribd

And we have this from the Original Complaint:

SRHS v Pinehaven Doc1Pg2

So now we have a Jackson County Land deal where the purchase price exceeds the appraisal and folks there nothing like a Jackson County land deal for that certain je ne sais quoi where something smells rotten but you can’t quite pin point the source and it is at that point you go looking for the incest. The questions that immediately come to mind is who is behind Pinehaven because that has big potential. This I can you you folks, the LLC that sold Pinehaven the land in question in June, 2007 that was resold to SRHS Ambulatory in December, 2007 included as a member Attorney Billy Guice, a name that came up in the letter written by the title insurance carrier that is well known to everyone that has followed the pension meltdown saga. Here page two of of the deed from that sale which is signed by Mr. Guice:

20070003236DJ1_Page_2

It is at this point I want to make clear that Slabbed is not accusing Mr. Guice of anything. The complaint pleads that Guice’s LLC sold a big parcel of land with frontage on a major 4 lane Highway for $21,000/acre to Pinehaven, who then sold a smaller parcel to SRHS Ambulatory for an amount greatly in excess of the appraisal and per the Title Insurance Claims Counsel it was former CEO Chris Anderson that suggested not formally telling the Board of Sups about the land purchase and this brings me to a theory about this entire suit.

Suppose for a second my skepticism about merits of this lawsuit are accurate. Further lets suppose that since this is a land deal which has roots in Jackson County that it stinks since the land was purchased for an amount in excess of the appraisal and former CEO Chris Anderson was involved. You gotta wonder what’s behind the green doors and the key to door number 1 is a made defendant in Pinehaven while the key to door number 2 is a subpoenaed witness in former CEO Chris Anderson. Put another way the muck potential is off the charts.

So why was Kevin Holland told to leave? Was it the local geo-political forces finally overwhelming him or does it have something to do with this case because Kevin Holland was at Chris Anderson’s side back in 2007.  This litigation gives us the potential to find out what’s driving rumors that come from the capital asset binge the hospital was on at the time. It also tells us that the Hospital system is desperate for cash and that is not a good sign.

Something tells me we’ll be having more on this.

13 thoughts on “Kevin Holland is finally leaving Singing River Hospital. What Gives?”

  1. Uh-oh….someone’s got some ‘splainin’ to do! Again! Does that surprise anyone?
    Before it is all over with, everyone will understand that it is one huge network of entitled insecure trough suckers running this show and stealing their constituents money. It is a huge network of “good old insecure boys” that was initiated by [email protected]@SS and his appointed minions like Rat Pickering, Billy the Boy in Gulfport and his motorcycle buddy Philly outta the big city of Jackson. IMO, Dilbert is in this up to his ears too. This network includes contractors, seafood dealers, attorneys, engineers, “consultants” and even so-called scientists who were and are all willing to play the game and keep their mouths shut. The lower slugs are given menial perks and they get a sense of importance (especially the short and insecure ones that have a short-man complex). They hide behind the church and “play-for-pay” wannabe preachers who can’t spell the Savior’s name much less preach his word. But the FEDS have something for them….they have stomped on the wrong toes of much more important people than they think they are. And just look around and see how some of the big fat contractors’ health is doing. You reap what you sow. Too little – too late. Good luck and prayers for you all.

  2. A point of law: governmental boards in MS speak through the minutes of the board, so if the board alleged to be the ultimate party to a contract has not spread the contract upon the minutes (hint: there are search terms for interested parties in the above), it isn’t a binding contract.

    That said, the bigger question is, “why is it that in EVERY hinkey, questionable or controversial deal in the bottom three counties (Jackson, Harrison and Hancock), a select few names appear?”

    The list of deals/ripoffs is long, but the list of curiously-involved legal types is short, considering the curiosity involved:

    1. Billy Guice and his otherwise-useless firm,
    2. Dogan and Wilkinson (esp. Roy Williams and Bobby Wilkinson, along with closely-associated alum and “friends” like disgraced adulterer ex-Jackson County Chancellor Charles Chuck Bordis),
    3. Page-Mannino-Peresich (with an emphasis on Stephen and Ron Peresich, as well as that firm’s alum and “friends”),
    4. Brown-Buchannan (Pat’s wife Allison is hooked up with Ted Cain, another coast med scammer, and her father, Ray Brown, was, well, Ray Brown),

    and of course, those that finally got press coverage due to SRHS (all of who left a long, sorry trail of slime prior to SRHS, amongst other hinkey stuff):

    5. Jim Reeves and Mike Mestayer and their firm (alums of Paul Minor and former partner of Mark Lumpkin),
    6. Earl Denham and Harvey Barton (yeah, they allegedly rep the Plaintiffs in SHRS…their check is in the mail, this will hurt them more than it will hurt you and they won’t come in your mouth…)

    And let’s not forget the judges, special masters and “trustees,” in particular:
    7. Lou “Take it to the US Atty” Guirola
    8. Breland “Love For Sale” Hilburn
    9. Steve “Hugelardasses Don’t Have to Pay Bills” Simpson

    All one need do is a little research to discover how much other legally-questionable stuff these same players have been involved in.

    You people wonder why you are getting screwed? I’m wondering why you are wondering why you are getting screwed when you’ve been letting the same incestuous crew screw you since at least the mid-1950’s.

    And in closing, some two years ago I suggested that the SRHS retirees would have been better off without all the litigation and was met by derision from multiple quarters. It won’t get any better for you – the retirees need to organize, forget about 100%, but be willing get as large a chunk as they possibly can. If they do, they might get some free – really free, totally pro bono, no “we’ll collect from the Defendant” BS – help. And in any case, good-damned-luck. You’ll need it and more until you quit letting the same scumbags screw you over.

      1. I doubt you would enjoy the conversation as much as you may think, but if a reason for us to talk should arise, I’ll get in touch with you.

  3. Attention Hancock County: Wake up and pay attention. You are about to lose your local hospital, which I’m sure is appraised for at least $50M, to Ochsner Health System who will pay a grand total of $12.5M. That’s one hell of a bargain and no one seems to be concerned about it. Recent articles in the Sea Coast Echo indicate Ochsner will be investing $32M+ over the course of 25 years in a lease/purchase agreement. That number looks great, but let’s not kid our ourselves folks – Hancock County will only receive a total of $12.5M cash in hand for something that has a total value of at least $50M. The difference in $32M and $12.5M is what Ochsner will be investing in capital improvements in the facility. While the number sounds good, they will ultimately be “investing” in themselves, and Hancock County will have giving away a lot of tax payer money. So their capital improvements will only serve to make them more money, because let’s face it, the hospital itself is essentially new.

    Think of it this way: When you lease a car, you pay a set amount over the course of the lease, and if you choose to purchase the vehicle at the conclusion of the lease, you do so. If you choose to invest in the capital of the vehicle (by purchasing a high dollar sound system, tinting the windows, adding a lift kit, etc); the lease company gets no more money for those investments UNLESS you decide not to purchase the vehicle and return it to the lease company. At that point, the lease company would have received what you paid them PLUS the money you invested in the capital of the vehicle. Same is true for your hospital. The only way for Hancock County tax payers to see $32M would be for Ochsner Health System to give it back after 25 years, which is obviously not going to happen. So they are basically paying $12.5M for a hospital. A hospital with no debt, lots of assets, virtually brand new, etc. What is that $12.5M going to be spent on? It’s sad that the elected officials in Hancock County will look for any way possible to get their hands on more money, to spend on things that we the tax payers may not necessarily want to spend it on.

    For David Yarborough to sit up there and say it is time for Hancock County to get out of the business of healthcare, tells me that he and others have obviously been bought off by Ochsner Health System. For no one other than Scotty Adam to question the fact that of 90+ bids, only 1 person responded, tells me that the others did not want to question the odd circumstances – or they were paid not to question the odd circumstances. Mr. Yarborough is correct, Hancock County Board of Supervisors has no business being in healthcare and they never have. It’s obvious in some of the people that he has appointed to the hospital board that he has chosen to have no concern for Hancock Medical Center or its employees.

    Fact is, Ochsner Health System has done nothing for Hancock County and Hancock Medical Center has continued to fail under their management for the last four years. Ochsner Health System has intentionally allowed this to happen, so they could acquire Hancock Medical Center at the lowest cost possible. Their strategy has been pretty apparent from Day 1 and people on the Board of Trustees and Board of Supervisors have turned a blind eye to the hospital’s mismanagement. It infuriates me (and many others) that no one sees the real deal here.

    For the Board of Supervisors to sit up there and say “sure, we may lose a few jobs” – let’s hope everyone understand what that means. That means Ochsner will be bringing their people in to operate this hospital, and our people (our Hancock County people that is) will be looking for employment elsewhere. They won’t be contributing to the incomes of tax payers in Hancock County. They won’t be creating jobs for the people who have worked at this hospital for so long. They won’t be too concerned about what happens in their aftermath. That also means that the people who have worked for Hancock Medical Center – those that worked in the state retirement system – may not be able to retire despite many years of service to Hancock County. People better wake up and realize that if they can do this to their hospital, what is to stop them from doing this to others in city/county government. And I know the argument here – They won’t “lose” their retirement, it will still be there for them when they reach the right age.” Well that is a load of crap. People who set out on a path towards retirement may find that retirement delayed by 5 or 10 years because they won’t reach that magic age until they have worked much longer than originally planned.

    Lots of rumors are spurring that Blaine Lafontaine and Gary Yarborough screwed up many deals with various other groups, the biggest being with the University of Mississippi Medical Center. Why would they be willing to do that? Could it be because they too are in the pockets of Ochsner Health System? I can remember way back when, rumors were that UMMC wasn’t operating at the speed the Board of Supervisors wanted them to operate. Well, look where we are now. This deal has been postponed to November 1st (and possibly even later than that). So for the sake of a month, they passed on a Mississippi institution for Ochsner Health System. I wonder why!

    All of these watchdog groups in Hancock County have failed to put this on the radar. All of these watchdog groups in Hancock County need to pay attention to what transpired two weeks ago and what is going to take place on Monday. Hancock County is about to lose it hometown hospital, which Mr. Yarborough indicated was seeing positive cash flow for the first time in years. If that is the case, why now? Oh wait, that positive cash flow thing was likely a maneuver by Ochsner in 2016 to demonstrate proper management of the hospital, but from what I know, they were broke then and they are broke now. So positive cash flow in 2016 (as we get ready for this bid process) overshadows the deficit in 2017 (as we are in the bid process) only when it is convenient? Ochsner knows how to play poker and it appears that they have swindled Hancock County – hook, line and sinker.

    I hope that all voters pay attention to this foolishness and pay it forward, next election year when it comes time to reelect the five members of the Board of Stupervisors. You can thank your county representatives for giving away at a minimum $37.5M of taxpayer capital to Ochsner Health System. Damn, that’s one hell of a deal.

    1. Please, pleas submit this to the newspaper under letters to the editor. Also, have you contacted the Singing River Hospital group?

      1. We allow all viewpoints here Cindy. I respectfully disagree with RN, the Hospital has been losing money and was unable to afford its own debt service. And while I would not duspute that $50M was spent building facilities that were not ultimately needed, as a Hospital it isn’t worth that.

        Oschner submitted a bid that a huge number of other health care providers were invited to beat. Many companies looked under the hood, no one beat the Oschner proposal. That too was in the Echo.

        Thr only 2 Commumity Hopsital systems I know of in South Mississippi that are doing well is George Regional and Forrest General. The rest like SRHS are slowly drowning. The Hancock Sups were smart to rid themselves of that financial albatross.

    2. Comparing a car to a hospital is like comparing a boob job to a heart attack – lots of people want the former (and enjoy the results), only a crazy person wants the latter (and enjoys the results).

      Seriously, though, cars are items that lots of people want, need and can and will readily pay to obtain. Hospitals are a complicated business proposition that only a very small number of companies want to own and the few that do will only buy at a deep discount. And to continue the car/hospital analogy, things are worth what “the market” – the pool of potential buyers ready, willing and able to purchase the item – will pay. Just like “the market” speaks as to what off-lease cars are worth, the market has apparently spoken as to the hospital – it is worth 12.5 mil because that is the highest offer from the market. If something as public as a county hospital that was really worth 50 mil was being sold for 12.5 mil due to payoffs, don’t you think another potential buyer would simply offer a bigger briefcase of cash? If this were a land deal or similar, hanky-panky would not surprise me in the least, but with all the headaches that come with owning a public hospital, I’m surprised the county didn’t need to bribe Ochsner to take the damned thing. Look at SRHS – if a known, reasonably well-operated entity like Ochsner offered a dollar to take that mess over and the Jackson County board didn’t jump on it before the Ochsner board sobered up, they would be nuts.

      The county is getting 12.5 mil to get out of a tough, tough business they have no business being in anyway AND the residents are getting an operator of a critical service who as good as they are going to get.

      Now, all that said, the devil is in the details and where residents could get screwed is if Ochsner has recourse to hang any liability (pensions, past debt obligations, etc.) on the county (i.e., the taxpayers) not reasonably put on them under the terms of deal. Does anyone have any facts as to anything like that in the deal? By “facts” I mean actual facts, not wild guesses, speculation or what Mabel thought she heard her bartender say he was told by his cousin, who knows all about these things because he had a real estate license before he became an Amway salesman.

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