OCH Administrator/CEO Letter to the Editor

Dear Editor:

My purpose in writing this letter is to correct any misleading information, misstatements or implications of wrongdoing by OCH. The following documentation is in response to Supervisor Miller’s recent Letter to the Editor, as well as posts to her Supervisor Facebook page.

Related to Letter to Editor 9/24/17:

Not Fact: Supervisor Miller by referencing Singing River Hospital System appears to be implying that OCH’s retirement situation is like Singing River, casting public doubt on the stability of OCH’s retirement plan.

Fact: OCH has a “defined contribution plan” which is not the same as a “defined benefit or pension plan” with guaranteed retirement benefits. This means contributions, voluntary and employer, are transferred monthly to employees’ personal retirement accounts with VALIC for them to manage.

Not Fact: Supervisor Miller by referencing Singing River Hospital System appears to be implying that OCH has two sets of books, sweetheart contracts, and has not been transparent with its records.

Fact: OCH does not have two sets of books. OCH has never had and does not have any sweetheart contracts with family and friends of trustees and hospital administration. OCH has always complied with the public record access requirements.      

Not Fact: Supervisor Miller stated, “…I did notice very little money was spent on capital improvements”.

Fact: OCH annual capital expenditures:

  • $3.2 Million FY 2017 (11 Months)
  • $5.3 Million FY 2016
  • $2.6 Million FY 2015
  • $2.0 Million FY 2014
  • $2.7 Million FY 2013
  • $5.5 Million FY 2012

Supervisor Miller seems to think that $1,609,560 is a large amount money for annual debt service on the GO 2009 & 2010 bonds.  OCH annual capital expenditures since FY 2012 have been greater than the 2017-18 annual GO bond debt service payments.

Not Fact: Supervisor Miller stated that Ted Woodrell is now being contacted for help from many hospitals and counties in our state.

Fact: An email response from Mississippi Hospital Association on September 29, 2017, stated, “To date (September 29th) Surveys conducted by MHA have not identified other member hospitals utilizing the services of Mr. Woodrell.”

Not Fact: Supervisor Miller cited from the Stroudwater report, “In our market area, since 2011, OCH has seen a 7.5% decrease, Baptist a 5.7% increase, NMMC a 2.1% increase and all others a 4.5% increase.”

Fact: I could not find these percentages anywhere in the report. Stroudwater only had market data for 2013, 2014 & 2015, as data for 2011 & 2012 was not available. Therefore, I am uncertain how Supervisor Miller obtained these percentages.

Not Fact: Supervisor Miller stated, “…$21 million ‘reserve’ is not truly all ‘liquid assets’.  A large portion of those funds are already allocated or tied to guarantees on bonds, etc.”

Fact: OCH is not required to use the $21 million as a bond guarantee. OCH is only required to pledge its ongoing operational revenues toward bond service payments. The total funds at July 31, 2017, of $21 million are either liquid or can be unrestricted for liquidity purposes without penalty at any time.

Bricklee Miller Oktibbeha County District 4 Facebook Page:

Not Fact: 9/20/17 In reference to the due diligence requests for the hospital bidders, Supervisor Miller stated “201 items requested, 70 not answered or the information so redacted that it was unusable.”

Fact: As of September 14, OCH uploaded 214 (95.5%) of 224 items requested and released partial information of 4 (1.8%) items on the Due Diligence Checklist Summary.

OCH submitted information based upon direction and communication provided by both Butler Snow Attorneys and Ted Woodrell, which included modifying the extent of the line item requests.  They said additional information most likely would be requested if the submitted information was insufficient.

OCH redacted information that was mostly related to protected health information under HIPAA on patients and employees.

On August 29, OCH received a listing of 20 questions from the bidders for additional information.  Responses to these questions were submitted on August 31.  To this date OCH has not been formally notified of 70 items that were not answered.

Not Fact: 9/28/17 Supervisor Miller posted Comparative Income Statements for 10 Months of operation at FY 2017, which is not accurate and generally accepted accounting principles (GAAP) were not followed.

10/04/17 “…this projected 6 million dollar loss.”

Fact: The correct loss was $5,066,421. The bottom line loss for FY 2017 10 Months was reported as $5,836,599 and is overstated by $770,178.

Not Fact: 9/24/17 “That is not true of the 21 million…money is allocated and cannot be used.  I will supply the breakdown soon for you.”

10/04/17 “Do you realize the 21 is not usable liquid cash? Much is tied to obligations.”

Fact: Of the total funds at July 31, 2017, $17 million of $21 million is usable upon discretion of the Board of Trustees at any time. These funds are either liquid or can be un-restricted for liquidity purposes without penalty. The $4 million is required for self-insuring professional and general liability claims.

Not Fact: 10/04/17 “Consistency is a basic tenant of accounting.  Mixing accrual and cash accounting is a confusing practice and should be avoided.”

Fact: OCH does not mix accrual and cash accounting.  Cash accounting would in no way accurately reflect the financial position of any hospital in the United States. Depreciation and amortization expenditures are not cash disbursements on our income statement.

Not Fact: 10/04/17 “Expenses to acquire or IMPROVE a business asset that will last longer than a year are not deductible as business expenses, useful life, expensing election, repairs, improvements.”

Fact: Capital acquisitions and capital leases with useful life longer than 1 year are depreciated over the useful life of the equipment or leases using straight-line depreciation as adopted by the Board of Trustees. This means depreciation and amortization are recognized each year as noncash disbursements.

Not Fact: 10/07/17 “I was contacted by numerous concerned employees that were made to attend meetings at OCH. This [picture of newspaper articles] is part of the information being distributed.”

Fact: I responded directly to her post stating these materials were not distributed to employees. Employees attended mandatory educational sessions about what can and cannot be done on the clock in regards to the referendum. The educational PowerPoint was presented to employees and to the Board of Trustees. The pictures of articles that she posted were the same articles that were NOT distributed to our employees but to our Board of Trustees.

Not Fact: 10/17/17 “…you the taxpayers hold the debt. You pay $24 million per week in taxes to support  . Absolutely, as your supervisor I have the facts and support protecting all the taxpayers in district 4.”

Fact: For FY 2017/2018 the Board of Supervisors has assessed $1,609,560 for bond payments, which is $30,953/week, not $24 million. The BOS has assessed $200,000 for EMS services, which is $3,846/week. This totals $34,799/week, NOT $24 million.

As documented above, whether intentionally or unintentionally, Supervisor Miller has misled the public on numerous issues on many occasions. I encourage the public to fact check all information.

Richard G. Hilton, FACHE

OCH Regional Medical Center

Administrator/CEO

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