Lakewood Can Keep The Hospital, But Summers Must Go
It is now clear that Lakewood Hospital was profitable prior to the January 15th closure announcement by Mayor Summers and also that it can be viable in the future with the right leadership.
However, it is also clear that Mayor Summers, through acts of commission and omission, has been complicit with the Cleveland Clinic (CCF) in causing damage to the hospital and preventing Lakewood from optimizing its options for the future. So Lakewood can keep the hospital, but Summers must first be replaced to do so.
Here is where we are and what we know:
1. Lakewood needs a hospital. CCF admitted this fact in its “Decanting Plan”---a plan to take assets from Lakewood and invest $190 million in Fairview Hospital where CCF hopes to profit from Lakewoodites forced to go Fairview if Lakewood closes.
2. Another manager can be found for Lakewood Hospital, but CCF and Summers have not allowed it---Summers and others tasked with protecting us from the Clinic are actually protecting the Clinic in order to pursue Summers’ political agenda that is in conflict with keeping the hospital:
a. CCF wants to demolish the hospital and control the hospital site to prevent any competitor from competing with them in Lakewood. Summers has known the CCF’s goal and he wants to close the hospital too---otherwise he would have asked the Clinic to sign a written agreement to step aside and not interfere with finding a new hospital system manager.
Huron Consulting found that no agreement was in place. It was later revealed that CCF had interfered with Metro---the only suitor that came forward last year. In addition, Summers not only ignored Metro's proposal, but he told Lakewood Hospital Association (LHA) trustees more than once that he didn’t want “those people” in Lakewood--- His statements exposed Summers’ personal prejudice against Metro and his ignorance of how healthcare works. When Metro expressed interest again in May, 2015, they asked Summers for a written assurance of an open and honest process where they would not be threatened. The events proved that prospective suitors are not comfortable proceeding without written legal assurances from Summers and CCF.
b. Summers admitted at the Beck Center forum on January 28, 2015, that while he was leading LHA in considering the future of the hospital, he was focused on “advancing the economic revitalization of the downtown business district.” Summers’ personal political agenda is a clear conflict with Summers’ legal duty of loyalty to Lakewood Hospital.
c. No broker-dealer or investment banker was ever hired to find a new manager for the hospital and the team Summers assembled had no experience at marketing and selling a hospital—3 of the 4 team members he chose had conflicts of interest in and were loyal to CCF;
d. No lawyers were hired to give advice on the process of marketing the hospital.
e. LHA trustees were compromised by CCF—the City is the proper party to market its hospital and assets and determine its future;
3. Lakewood Hospital is the highest and best use of the hospital site. No alternative economic development exists that can match the economic benefits of the hospital.
Despite years of planning for development on the hospital site, Summers and his City Hall planners have no market data, no traffic studies, no estimates of employees, no estimates of tax revenues, no prospective employers, no estimates of numbers of residents, and not even one business that would use, build or occupy ANY of the development scenarios they propose.
Nothing is as viable as a hospital and everything proposed by Summers is more risky than keeping the hospital open.
4. Lakewood Hospital was profitable until the Summers Plan caused losses this year—Summers is using these manufactured losses to pursue his agenda. The audited financial statements show that LHA made over $2.5 million and $5.3 million in net profits in 2014 and 2013, respectively.
There is no debate over the fact that Summers’ announcement to close the hospital, and his complicity in allowing CCF to dismantle the hospital are the sole causes for the recent losses.
Summers is charged with protecting the hospital and has not simply failed to stop the ongoing looting and theft by CCF, he has used the ensuing calamity and losses caused as political pressure and justification for proceeding with his plan. He continues to promote the idea that the hospital is not viable when his own actions and his complicity with CCF are the only reasons that the hospital is losing money.
5. The Huron and Subsidium appraisals of Lakewood Hospital did not account for prior thefts and looting by the Clinic so they were fashioned by Summers to support his plan. Summers was in control of the engagements of both of the Huron and Subsidium consultants and they were not engaged to put a value on the damage that the Clinic and LHA caused to the hospital.
So the resulting appraisals did not reflect the damage that CCF, LHA and Summers caused, thereby favoring Summers’ plan to close the hospital.
The prior efforts to find a new manager were bogus, because Summers and the Clinic had other plans besides operating a hospital in Lakewood. Summers has been the key actor in manufacturing and perpetuating the current crisis at the hospital. Replacing Summers with a new Mayor will enable Lakewood to fully explore all options to keep Lakewood Hospital operating and serving our community.