McDavid leads hospital

Dr. Robert McDavid says there was a pivotal point in the debate over the Boone Hospital Center’s relationship with BJC Health Care when he realized the soundness of his argument for terminating the lease.

The scene was in early October at the Peachtree Banquet Center, where McDavid, a retired obstetrician, and Steve Lipstein, BJC’s CEO, took turns speaking to a group of doctors.

Lipstein defended the lease arrangement, which McDavid and the four other Boone Hospital trustees must decide within weeks whether to cancel or keep.
The veteran CEO said ending the lease would not bring the savings opponents estimate and said there could be a health care recession on the horizon. He added that ending the lease would delay a construction project to expand the overcrowded hospital by 128 beds and could cause employees to leave during the transition to a new management system, developments that would strengthen the crosstown rival, University Hospital.
McDavid was unimpressed.

“I expected an argument that would be hard to refute,” he said. “I didn’t get it. That was the moment for me.” After McDavid spoke, he received a prolonged standing ovation.

A few weeks later, a group of influential businessmen led by Tom Atkins started rallying support for terminating the lease, and it appeared that the tide of public opinion, initially skeptical, had turned.

“The initial response was, ‘If it’s not broke, don’t fix it,’” McDavid said. Now, “It’s being said with almost universal agreement that the lease is not fair to Boone County.”

McDavid said he has been “energized” by the growing support, but remains somewhat uncomfortable being at the forefront of an issue with such high stakes.

“I don’t consider myself a politician,” McDavid said. “This has a lot of political overtones, which I am not accustomed to.”

McDavid, 59, grew up in DeSoto, about 65 miles southwest of St. Louis. The University of Missouri drew him to Columbia. He arrived in 1966, graduated from the MU Medical School and opened his practice in 1976.

He retired three years ago, largely because of the rising cost of malpractice insurance.

McDavid is married to a school nurse and has two children and three grandchildren.

“I like to play golf, write fiction and play with my grandchildren,” he said.

McDavid, who was elected to the board of trustees nine years ago, said, “I ran because Mike Shirk (Boone Hospital’s CEO until last year) asked me to.”
McDavid and fellow hospital trustee Fred Parry have been criticized for the late start in their campaign to terminate the lease, three months before the deadline for voting. The trustees sent out requests for proposals to lease or manage the hospital in October and asked for responses by the end of the month, a relatively short time for a complicated evaluation.

“There have been a lot of transitional things going on,” McDavid said. “We were in a search for a new CEO, and it would have been problematic to recruit a CEO in the midst of a lot of controversy. Second, we knew we needed facilities for expansion and were waiting for BJC’s long-term plan.”

That plan, which came out in August, made the unfairness obvious, McDavid said.

Boone Hospital, while sending $200 million of its revenues to BJC in St. Louis over the next nine years, never to return, would have to borrow between $100 and $150 million to finance the expansion, he said. The debt would be paid by Boone Hospital funds allocated for capital equipment and technology.

“The numbers really did not make sense for Boone County,” he said. “There was no response (from BJC) to indicate how this lease was fair.”

What really aggravated Atkins and other local businesspeople was the perception that BJC was unwilling to negotiate the terms of the lease. Lipstein recently made it clear BJC is willing to negotiate, and attorneys for BJC and BHC will meet on Nov. 22 in St. Louis, two days before the next board of trustees meeting. But McDavid said it’s too late.

“If you try to negotiate before you cancel the lease, you are negotiating from a weakened position,” he said. “But I am certainly willing to hear what BJC has to say. The amount of concessions they would have to make is substantial.”

If the trustees vote to terminate the lease, McDavid pointed out, they will still have two years to restructure the hospital’s management because the lease terms run through 2008.

“As we started telling people about it, they would pause and repeat it back to you, ‘Cancel the lease?’ The relationship has been so ingrained into the community that we are a leased hospital when actually what people didn’t understand is that leasing a good hospital is an aberration. Hospitals that are leased are those that are troubled. We were never in that position and should never have elected that form of governance.”

McDavid said BJC’s lease agreement failed to provide for the necessary expansion of the health care center. He also rejected another argument for keeping the lease.

“One of the reasons to continue the lease is that if things go bad, BJC will be there to back us up,” McDavid said. “If things go bad, what will happen is BJC will make us a smaller hospital.”

He also doesn’t buy the argument that BJC made Boone Hospital great.
“I was there,” McDavid said. “I know that Boone was a great hospital before BJC.”

“I expected an argument that would be hard to refute,” he said. “I didn’t get it. That was the moment for me.” After McDavid spoke, he received a prolonged standing ovation.

A few weeks later, a group of influential businessmen led by Tom Atkins started rallying support for terminating the lease, and it appeared that the tide of public opinion, initially skeptical, had turned.

“The initial response was, ‘If it’s not broke, don’t fix it,’” McDavid said. Now, “It’s being said with almost universal agreement that the lease is not fair to Boone County.”

McDavid said he has been “energized” by the growing support, but remains somewhat uncomfortable being at the forefront of an issue with such high stakes.

“I don’t consider myself a politician,” McDavid said. “This has a lot of political overtones, which I am not accustomed to.”

McDavid, 59, grew up in DeSoto, about 65 miles southwest of St. Louis. The University of Missouri drew him to Columbia. He arrived in 1966, graduated from the MU Medical School and opened his practice in 1976.

He retired three years ago, largely because of the rising cost of malpractice insurance.

McDavid is married to a school nurse and has two children and three grandchildren.

“I like to play golf, write fiction and play with my grandchildren,” he said.

McDavid, who was elected to the board of trustees nine years ago, said, “I ran because Mike Shirk (Boone Hospital’s CEO until last year) asked me to.”

McDavid and fellow hospital trustee Fred Parry have been criticized for the late start in their campaign to terminate the lease, three months before the deadline for voting. The trustees sent out requests for proposals to lease or manage the hospital in October and asked for responses by the end of the month, a relatively short time for a complicated evaluation.

“There have been a lot of transitional things going on,” McDavid said. “We were in a search for a new CEO, and it would have been problematic to recruit a CEO in the midst of a lot of controversy. Second, we knew we needed facilities for expansion and were waiting for BJC’s long-term plan.”

That plan, which came out in August, made the unfairness obvious, McDavid said.

Boone Hospital, while sending $200 million of its revenues to BJC in St. Louis over the next nine years, never to return, would have to borrow between $100 and $150 million to finance the expansion, he said. The debt would be paid by Boone Hospital funds allocated for capital equipment and technology.

“The numbers really did not make sense for Boone County,” he said. “There was no response (from BJC) to indicate how this lease was fair.”

What really aggravated Atkins and other local businesspeople was the perception that BJC was unwilling to negotiate the terms of the lease. Lipstein recently made it clear BJC is willing to negotiate, and attorneys for BJC and BHC will meet on Nov. 22 in St. Louis, two days before the next board of trustees meeting. But McDavid said it’s too late.

“If you try to negotiate before you cancel the lease, you are negotiating from a weakened position,” he said. “But I am certainly willing to hear what BJC has to say. The amount of concessions they would have to make is substantial.”

If the trustees vote to terminate the lease, McDavid pointed out, they will still have two years to restructure the hospital’s management because the lease terms run through 2008.

“As we started telling people about it, they would pause and repeat it back to you, ‘Cancel the lease?’ The relationship has been so ingrained into the community that we are a leased hospital when actually what people didn’t understand is that leasing a good hospital is an aberration. Hospitals that are leased are those that are troubled. We were never in that position and should never have elected that form of governance.”

McDavid said BJC’s lease agreement failed to provide for the necessary expansion of the health care center. He also rejected another argument for keeping the lease.

“One of the reasons to continue the lease is that if things go bad, BJC will be there to back us up,” McDavid said. “If things go bad, what will happen is BJC will make us a smaller hospital.”

He also doesn’t buy the argument that BJC made Boone Hospital great.
“I was there,” McDavid said. “I know that Boone was a great hospital before BJC.”