Could OHSU and Moda be moving toward an equity arrangement? In emails obtained by The Lund Report under the Freedom of Information Act, Dr. Joe Robertson, president of OHSU, and Robert Gootee, CEO of Moda Health, could be headed in that direction.
However, spokespeople from both organizations deny anything is on the horizon. OHSU has until the end of 2016 to exercise the option to convert its $50 million surplus note into a 25 percent equity position in Moda, an agreement signed last November.
On email correspondence dated June 10, Dr. Joe Robertson, OHSU’s president, told Robert Gootee, CEO of Moda, that their “organizations have much to accomplish together, and we will. I researched the vote that you mentioned. Final tally 17-12-1. Discussed with Connie [Seeley]. She said that as a representative of a public entity she did not feel she should vote against the groups coming together if they desired.”
Seeley is chief of staff at OHSU and senior vice president of public affairs, and joined OHSU in 2010 to manage government relations after spending seven years as chief of staff for Senate President Peter Courtney.
In his response the same day, Gootee said, “Sorry about saying OHSU was the deciding vote...you and Connie have it right. I look forward to our get-together and will check in from time to time before then.”
Earlier, on May 23, Robertson wrote, “I have not forgotten our desire to get together, both with senior members of our boards and also socially. I would like to meet with you in person to discuss what we will say to our collective board membership. My office will contact yours to set up a time for that as well as look for an opportunity to have you and Courtney [Gootee’s wife]out to the Oregon Yacht Club for a cocktail cruise and dinner with Patricia [Robertson’s wife) and I”
When asked to clarify the meaning of that vote, OHSU spokesperson Tamara Hargens-Bradley said the document “pertains to a private board that Connie Seeley serves on and has no relation to OHSU business,” adding, “There has been no decision on converting the surplus note to equity.”
Jonathan Nicholas, spokesman for Moda, concurred, telling The Lund Report, ”There’s nothing new to report.” .
Any decision to move toward an equity arrangement must be approved by OHSU's board which meets next on September 29. Insurance Commissioner Laura Cali must also approve the transaction.
It’s been well known that OHSU is seeking an insurance partner and had teamed up with the Oregon Health CO-OP, which has since gone defunct. Salem Health, Portland Adventist Medical Center and Tuality Health have also joined OHSU Partners to build an aligned, community-based health care approach to sustainable healthcare transformation, and had planned to offer the CO-OP’s insurance product in the individual health exchange. .
After its recent financial tribulations and when state regulators placed Moda under supervision, OHSU stepped back, and appeared hesitant to join forces, issuing the following statement, “OHSU is concerned about Moda Health’s recent financial performance and the announcement from the Oregon Department of Consumer and Business Services. We are evaluating the situation as it relates to our relationship with Moda, but more immediately our focus will turn to working with the State to ensure that Oregonians continue to have access to OHSU.”
But that order has since been lifted, and Moda has managed to pull itself out of its shaky situation by selling assets and agreeing to raise another $179 million. Had that not occurred, the company could have gone into receivership, according to Patrick Allen, director of DCBS.
Also, recent financial documents from the second quarter filings indicate that Moda should be back in positive cash territory by the end of 2016. Its cash balance is still negative, but it has climbed from negative $45.9 million a year ago to negative $3.8 million as of June 30.
Late last year, Robertson told The Oregonian last year that there was a possibility OHSU could inject additional cash into Moda for additional stock, though he said that's likely a decision that wouldn't be made any time soon. OHSU likely would not take more than a 50 percent stake in the company.
"Twenty-five to 50 percent is probably the sweet spot," Robertson said. "We are in violent agreement (at OHSU) that we don't want to own an insurance company."
Moda and OHSU also cemented a deal in 2015 bringing together six other hospital systems across the state, calling themselves the Population Health Alliance --Asante Health, Bay Area Hospital, Mid-Columbia Medical Center, Salem Health, Sky Lakes Medical Center and St Charles Medical Center. Together they have 52,000 employees and represent 3.5 million patient visits, including inpatient admissions, and outpatient and emergency room visits, all of which will become part of this new approach.
Diane can be reached at [email protected].
