The Lompoc Valley Medical Center proposal to pursue a partnership with another organization, and give up its independence, ended Monday night after the board of directors unanimously decided to pull the plug without explanation or comment.
The brief meeting included Chief Executive Officer Steve Popkin verbally lashing out at two community members and longtime hospital supporters who have questioned the partnership proposal and the process.
None of the five board members — president and registered nurse Leslie Kelly, Dr. Christopher Lumsdaine, Dr. David McAninch, III, Dr. Elham Novin-Baheran and financial advisor Roger McConnell — explained their vote to discontinue the partnership process during the meeting that lasted less than 15 minutes.
“There’s a request for the board to continue or discontinue the potential partnership process and determine finalists, if applicable,” Kelly said, before asking her colleagues for a motion.
“My motion is to discontinue the process,” Novin-Baheran said, with McAninch providing the second. All five voted in favor of the motion and also agreed to terminate the agreement with a consultant hired for the partnership exploratory process.
On Tuesday, Alice Milligan the longtime leader of the Lompoc Hospital District Foundation, said the majority of its executive committee was pleased with the unanimous decision.
“Obviously the board has done its homework,” she said, adding she was disappointed they did not comment on their vote.
“I’m glad the board made that decision and now it’s done and we’ll move on,” she added.
Partnership Proposals Were Lacking, CEO Says
The vote apparently ends a nearly six-month exploration that started Sept. 11, according to Popkin’s chronological summary that revealed proposals submitted had various short-comings despite hiring a consultant, Juniper Advisory, to facilitate the process.
The board issued a solicitation of interest to 25 healthcare organizations that operate hospitals in California. Most of the organizations were not-for-profit with some for-profit groups and some public entity organizations such as University of California hospitals, Popkin said.
Four healthcare organizations returned an indication of interest plus a signed non-disclosure agreement. They were instructed to submit non-binding preliminary proposals by Jan. 5, but one organization dropped out.
“All three that submitted proposals were not-for-profit hospital systems,” Popkin said. adding two have their headquarters in California while the third operates many hospitals in the state.
He said the three organizations were given limited instructions for prepping their preliminary proposals “because there was a desire and interest to see what would be proposed without prompting and without undue influence.”
The preliminary proposals were lacking. One had “a structure” that interested the board, but the financial aspects were not sufficient to meet minimum requirements, Popkin said.
One, although “a thorough and good faith proposal,” proposed a partnership structure that did not adequately address the overriding objective of long-term financial sustainability for LVMC, Popkin said.
The third proposal was not specific nor substantive, but the organization requested additional time.
Feeling they all lacked sufficient information to proceed, the board spelled out its objectives, offered site visits and set a new deadline for refined but still non-binding preliminary proposals.
Two organizations took advantage of a site visit, and the third conduced a Zoom meeting, Popkin said.
One organization later withdrew due to financial reasons and another kept its preliminary proposal although the board didn’t see the structure as desirable, Popkin said.
The third did not submit a proposal by the Feb. 20 deadline, but later sent a letter outlining the structure they would propose if LVMC granted an extension until March 15.
“The general structure proposed by this organization had potential interest of the board, not definitive interest but potential interest. The structure proposed was different than the structure proposed by either of the two other organizations,” Popkin said.
Hospital CEO Defends Process
If the process proceeded, the proposed partnership might have required healthcare district voter approval as well as state and federal regulatory approval, Popkin said.
Popkin claimed he had encouraged input, saying he received written or verbal comments from over 40 individuals. The hospital and its related medical facilities have 900 employees while the district has more than 44,000 residents.
He also contended he candidly answered questions, but Popkin declined to answer media questions about the process and leveled criticism during the public meeting at two people who had questioned the decision to pursue the partnership.
He didn’t name them, but said they had close ties to LVMC, claiming they did “everything in their power to undermine this process and to undermine the board’s ability to perform its fiduciary duty.
“However, I want to make it clear that the numerous attempts to undermine have no impact on the process and no impact on the decision making of the board,” Popkin added. “I do see some medical staff members here so I want to make it clear that the individuals I’m referring to are not medical staff.”
It’s believed he meant Milligan, leader of the hospital foundation, and former hospital CEO Jim Raggio, but Milligan on Tuesday said she chose to ignore Popkin’s comment.
Regardless of the decision made Monday night, Popkin said the board and management strongly believed the information and knowledge gained by the exploratory process “has great value to LVMC and by extension great value to the Lompoc Valley community both now and in the future and it reaffirms the prudence of having initiated this process.”
Popkin reportedly intends to retire, but had not submitted his resignation as of Monday night.
However, last week he asked the board to rescind the decision to hire a consultant to search for his replacement and to authorize Popkin to conduct the internal recruitment process.