EVMS board votes “no confidence” in study pushing merger with ODU
Eastern Virginia Medical School is pulling out of a process that is exploring a merger of the school with Old Dominion University and a spin off of its medical group with Sentara Healthcare.
The school’s board of visitors held a vote of no confidence in a consultant who would recommend to Gov. Ralph Northam the school be absorbed by ODU. The restructuring would call for the EVMS board to be dissolved and the school be run by the university, while its clinical faculty merged with Sentara Medical Group.
“The process not only lacked transparency, freedom from conflicts of interest, and actual dialogue between all parties, it appears to have been based on a predetermined outcome conceived prior to EVMS’ participation,” the board said by resolution Monday afternoon. “Had EVMS known prospectively of the real and perceived conflicts of interest and the lack of objectivity to the engagement, we would not have agreed to participate.”
The board is offering its own proposal as a new jumping off point for discussions with all the involved parties. That plan, which could take up to seven years to implement, would turn the school into the “Eastern Virginia Health Sciences University at Old Dominion University,” a separate university that would report to a newly established ODU system board of visitors. That governing body could be composed of representatives from each of the schools.
The first six months would be set aside for nailing down key funding from Sentara and the state. And the plan outlines a potential financial strategy that could mean heavy lifting from the private, nonprofit hospital system: a one-time endowment of $1.5 billion and additional funding as a percentage of Sentara’s annual net income. That, according to the proposal, would translate to about $75 million a year.
Another $3 million could come from Children’s Hospital of The King’s Daughters as “an academic investment” in pediatrics and pediatric community outreach.
But without financial assurances, EVMS would not move forward with a merger, said Dr. Theresa Emory, rector of the school’s board. The board discussed the details of the proposal in a closed meeting, then reopened the virtual session to the public before its vote.
“In hindsight, sadly, it’s clear to us it was an exercise in justifying to unload EVMS onto Virginia taxpayers and Old Dominion,” Emory said of the study by Manatt Health Strategies in an interview with The Virginian-Pilot following the meeting.
Sentara spokeswoman Danya Bushey said the hospital system had no comment on the board’s action.
“We also have not seen the EVMS proposal mentioned and, therefore, cannot comment on it,” she said in an email Monday evening.
EVMS is calling its counterproposal a “hard reset” on a process that has been happening privately for the past few months. A consultant, predominantly paid for by Sentara, has been expected to recommend the quasi-public medical school merge with ODU and fold its clinical faculty medical practice group into Sentara’s.
The consultant, Manatt Health Strategies, is supposed to provide its report to Northam imminently, just ahead of the Virginia General Assembly session that begins in January.
But EVMS leaders have had major problems with what they feel has been a rushed study lacking transparency.
They fear the outcome would strip the medical school of its independent decision-making power, result in layoffs and departures of staff and leave out funding guarantees critical to maintaining its accreditations. EVMS Medical Group, the practice made up of about 150 physician-teachers and 40 other health professionals, could lose its ability to serve as a safety net for uninsured and low-income patients.
It seems that Old Dominion might be amenable to restarting talks without the consultant. In a statement to The Pilot on Monday, university president John R. Broderick said: “The health disparities that exist in Hampton Roads, especially among underrepresented populations, remain too critical for EVMS, Norfolk State, Old Dominion University, CHKD and Sentara to not jointly seek solutions for our region.”
The EVMS plan would create a research institute foundation model between the medical school and ODU in the first six months. That would essentially allow the university to benefit from EVMS’s research expenditures, according to the proposal.
The first phase also would involve exploring a way for EVMS’s physician faculty to combine with Sentara Medical Group, such as establishing a new nonprofit organizational structure to serve as a joint governing body over the combined practice group.
The next phase would be devoted to all the involved parties working together on the integration of EVMS and the university, while retaining their current leadership systems. That process could last several years before moving on to the actual implementation of the merger.
But how likely is Sentara to come back to the table?
Dr. Richard V. Homan, EVMS president and provost, said he hopes their hospital partner will consider starting over without the consultant.
“I would hope we could all get together, that we could develop a plan,” he said. “This is not grandstanding. This is finding an alternative pathway.”
When asked why it matters whether the medical school is run by the current board or ODU’s, Homan said one of the critical issues is maintaining consistency for employees during the transition. Recruitment and retention of faculty would become more difficult if people weren’t clear on who their boss would be and how their teaching obligations or compensation could change in the near term.
“That process is very delicate, and you can imagine if there’s a sense of uncertainty,” he said.
It’s unclear what Northam, an EVMS graduate, thinks about the board’s withdrawal from the study. The governor’s office did not return a request for comment from The Pilot on Monday.
In August during a news conference, Northam championed the hiring of Manatt in the interest of improving the “health care ecosystem” in Hampton Roads. The Northam administration has said a stronger alliance between these entities could improve the health of people living in the region. Eastern Virginia lags behind the state and nation in infant mortality, cancer, heart disease and diabetes.
Initially, EVMS appeared to be on board with the study. But behind the scenes, medical school leaders have worried that Sentara is trying to force the institution to go with ODU to free itself of future funding obligations.
EVMS and Sentara have partnered for decades, with the hospital system providing clinical teaching environments for the school, and the school providing doctors and medical residents for Sentara’s workforce.
Internal emails obtained by The Pilot showed that Emory and Homan believed the consultant’s proposal would result in massive layoffs and the loss of the school’s independence. And they also feared that if the school were merged into Old Dominion, it would give the appearance of more state financial support with no actual increase, because they considered the university to be badly underfunded.
Over emails, the EVMS leaders discussed their discovery that Sentara CEO Howard Kern was also a director on ReInvent Hampton Roads’ board, the third-party private think tank that hired Manatt for the study.
Emory said Monday the study “appears to be to help prepare Sentara for its $11.5 billion merger” with Cone Health, a North Carolina-based hospital system. Pending regulatory approvals, the deal between Sentara and Cone could close next year.
In a statement last week, Sentara said it has a vested interest in EVMS’s success. Its desire is that the consultant’s study would identify a partner for the medical school that would help it provide health care for the community.
EVMS’s board is asking ReInvent to give back the $25,000 it contributed to the consultant’s contract, saying the school doesn’t want the community to mistake the funds as a sign of support.
If refunded, school officials said they would give the money to a student whose family was impacted by the coronavirus pandemic. ReInvent’s chairman John “Dubby” Wynne did not return a request for comment for this story.
Elisha Sauers, elisha.sauers@pilotonline.com, 757-222-3864
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