A Failure to Communicate: How Washington Drops the Ball

July 23, 2012

Earlier this year, on April 3, the Cheboygan News reported that Cheboygan Memorial Hospital was closing unexpectedly. The hospital had been in a purchase agreement with McLaren Health Care, based in Flint; the closure came as an unwelcome surprise to many in the community.

Here’s what was in the press as it became clear the hospital would close in early April:

The Cheboygan Memorial Hospital (CMH) is closing today leaving 300 employees without a job. 9 & 10 News reports the hospital had filed for bankruptcy on March 1. (Michigan Radio)

Cheboygan nurses and community leaders are in shock today. The sale of Cheboygan Memorial Hospital to Flint-based McLaren Health Care has fallen through at the last minute. (Interlochen Public Radio)

“With this closure, we will have to close our emergency room,” said Shari Schult, Chief Executive Officer of CMH. “We will need to coordinate with area EMS services and local law enforcement to divert all ambulances to the most appropriate hospital. This closure …also means all of our employees are without a job,” she added. (Cheboygan News)

The long-awaited proposed sale of CMH to McLaren Health Care was set to be finalized today. But now, federal regulations are causing it to come to a halt. CMH officials say the problem is with recertification and licensure under Medicare. And now, the organization is running out of money. (Cheboygan Memorial Hospital press release)

The impression left by these reports was that the federal government was unreasonably blocking the sale by requiring new certifications. But thanks to the digging of Linda Stephan of Interlochen Public Radio, a more nuanced view of the situation unfolded over time. Linda spent considerable time on April 3 and 4 trying to get to the full facts of the situation.

Linda’s initial knowledge came from a press release issued by the hospital. Inexplicably, the Centers for Medicare and Medicaid Services released nothing but a rather bureaucratic statement indicating the sale could have gone through if McLaren had agreed to take over the existing Cheboygan Medicare contract. Linda probed further and it became clearer that the hospital owed the federal government more than $8 million in loans, and McLaren did not want to assume that liability.

Linda’s probing put the real issues into perspective. The first news reports left the impression that an unreasonable government bureaucracy was putting licensure reviews in the way of access to care. The community was outraged; care was being cut off and people were suddenly unemployed. The deeper analysis, however, led to a better understanding of the government’s position: they had never before allowed a transfer of a Medicare contract that transferred only assets, not liabilities. And this was likely something that was known by all parties before the 11th hour failure to close the deal, which raised more questions about the structure of the deal in contrast to the hospital’s initial press releases.

The Cheboygan situation is a microcosm of a much bigger issue; I raise it not to debate the merits of this particular situation, but rather to point out a core failure in Washington: the failure to communicate. Why does it take a reporter’s probing and prodding to surface facts that put the government’s position in a more reasonable light?

Because of a good reporter, the public got more information about the Cheboygan situation, which enabled a more thoughtful assessment. But Cheboygan is just one example of Washington’s broader failures to communicate around health reform generally, and the Affordable Care Act specifically. And unlike Cheboygan, which was pretty quickly sorted out, the myths and misconceptions around health care reform abound. Those misconceptions could have devastating consequences well beyond those in one community – something we should all be concerned about.