Almost two years after agreeing to sell the Valley Health System (VHS), Tuesday night its board of directors voted to negotiate confidentially and exclusively the sale of the both Hemet Valley (HVMC) and Menifee Valley (MVMC) medical centers with a group of local physicians.
The board ignored representatives of two other private groups interested in exploring bids for the system and the comments of many citizens recommending an open bidding process.
“Our charge is to the community not necessarily to [obtain] the highest deal,” replied Director Vinay Rao. “It is not whoever can give the most money, important part of the community are the physicians.”
In exchange to taking hospitals off the market, PHH will put $1 million in an escrow account. If a sale is consummated the money will become part of the purchase price. VHS does not receive any money for closing its eyes and ears to other potential buyers over the next 90 days.
Apparently some negotiations have already occurred as both VHS chair Dr. William Cherry and other directors said that the Physicians for a Healthy Hospital (PHH) was willing to bring a “top-tier management team”. Cherry later said this would be a firm with a national reputation such as Catholic Charities West, UCLA or Loma Linda.
Cherry did confirm that the Board’s other sale criteria would eventually be shared with the public, but only after the negotiation process had progressed further. While new Director Madaliene Dreier asserted “transparency” would be more than a “buzz word”, none of the directors volunteered to provide as much information as they have already given PHH.
During the public comment period, both Michael J. Sarrao, vice president and general counsel for Prime Healthcare Management, Inc., and Bob DeGour, executive vice president and general manager of ADR Associates, both said separately their firms would be interested in submitting a bid for part of all of the VHS.
[more will be in the print issue version]