ASHEVILLE — Concerns the foundation due nearly $1.5 billion HCA Healthcare will pay for Mission Health lacks diversity and transparency and is too close to Mission’s leaders drove many of the changes won by state Attorney General Josh Stein.

Stein announced Wednesday that he had negotiated an agreement with Dogwood Health Trust and secured changes to a sale agreement signed in August to ensure the foundation will reflect Western North Carolina. They will cause major changes in the board’s membership.

New provisions will require Dogwood hold at least three public meetings in 2019 and one thereafter, plus report on its activities annually to the public.

Stein said Wednesday he will allow the purchase to go through without legal challenge after negotiating those and other requirements. Mission said Stein’s decision means Tennessee-based HCA will take ownership of the system Feb. 1.

Added safeguards include establishing rules for the composition of Dogwood’s board of directors. The foundation will use money from Mission’s sale to attack societal problems that affect health.

Since the initial board members were announced in August, there have been criticisms the Dogwood board lacked independence from Mission, is too heavily weighted with people from the Asheville area and does not have enough members of different races, gender and economic situations.

Creation of the foundation "feels to date as if it's been an insiders' decision-making process," said Susan Larson, a leader of a group of Mitchell County and Yancey County residents pushing to preserve services at Blue Ridge Medical Center in Spruce Pine. "It has not felt like it is open to the public."

Dogwood has held meetings with representatives of nonprofits but has announced no opportunities for members of the public to learn more about its operations. The trust’s board meetings are not open to the public.

The chair of its board, Janice Brumit, last week turned aside questions from the Citizen Times about who has been nominated to serve on the board, how many nominations have been made and whether more members will be added.

The Dogwood Health Trust is just one aspect of the sale. The deal also involves the transfer of the Asheville-based, nonprofit health system's six hospitals in WNC to HCA. In addition to Mission Hospital and CarePartners in Asheville, Mission Health includes hospitals in Spruce Pine, Brevard, Franklin, Highlands and Marion.

For-profit HCA runs 178 hospitals in the U.S. and United Kingdom.

Related coverage:If Mission Health is sold to HCA, what happens to quality of care?

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Nominated but never contacted

Betsey Russell, an Asheville resident who has worked as a consultant to philanthropic organizations for the past 25 years, is among the those who have been nominated to a seat on the Dogwood board but have heard nothing since.

She said before Stein’s announcement that she would like to see the foundation reach beyond the usual suspects for leadership, but she might not be the best person to be added to the Dogwood board at this time because of diversity issues.

"Given the seats already filled, I think it's much more important that they look for leaders from Asheville's communities of color and from rural counties rather than another white person from Asheville/Buncombe" to serve on the board, Russell said. "No one can inform a foundation's strategy like the people it wishes to serve."

Miriam Schwarz, executive director of the Western North Carolina Medical Society, said the physicians' group had supported the nomination of Dr. Suzanne Landis, the former director of the Center for Healthy Aging at the Mountain Area Health Education Center and the founder of Project Access, which provides medical care to those who otherwise could not afford it.

Landis wasn't chosen. Schwarz said the process is "opaque" and it is difficult to tell what types of candidates the foundation would welcome.

Criteria for board members are listed on the foundation website "but they're not specific enough to know the direction in which the board membership is going in terms of diversity," Schwarz said.

The medical society would like to see more representatives of rural areas and of disenfranchised communities, or those who have worked with low-income people, she said.

Dogwood's bylaws say its board can have anywhere from five to 19 members. Members are to be chosen "on the basis of their knowledge, skill, experience and commitment to advance the charitable purpose of the corporation" the bylaws say and will "represent the diversity of the residents of Western North Carolina."

In an email, Brumit declined who or how many people have been nominated for seats on the Dogwood board.

As a private, nonprofit organization, Dogwood is not subject to public records or open meetings laws.

There is "an open and ongoing nomination process" for candidates, Brumit said. She did not say when or whether more members might be added.

Because members serve staggered, three-year terms, there will be a need for replacement members in the future, she said.

Brumit noted that anyone can make a nomination through Dogwood's website, DogwoodHealthTrust.org, and said the board is intentionally moving slowly as it organizes the foundation.

It is more important to get members with "needed competencies and perspectives ... (than) quickly filling the empty seats," she said. "What we have learned from numerous others with deep experience in this area is that the single most important thing to do is be deliberate, focused, strategic and not driven by an artificial timeline."

An Asheville-area tilt

Buncombe County makes up 28.6 of the population of the 18 WNC counties Dogwood is supposed to serve, but seven of the 11 Dogwood board members chosen so far are from Buncombe County.

All but three have served on the governing board of Mission Health or one of its constituent hospitals and most are likely to have higher incomes, based on their businesses or professions.

The board added two members in December following diversity concerns raised last summer and fall: Vivian Bolanos, a Henderson County banker who is fluent in English and Spanish, and longtime educator Jackie Simms, an African-American from Buncombe County.

Neither Bolanos nor Simms could be reached for comment. Before their appointments, only two of the then-nine Dogwood board members were women and only one was a person of color.

Michell Hicks, former principal chief of the Eastern Band of the Cherokee Indians, said he is “comfortable with the board” but referred questions to Brumit. His board appointment was announced in August.

Several other minorities and women have been nominated for seats on the board.

Board members' ties to Mission have worried skeptics of the proposed sale. In addition to spending money derived from the sale, Dogwood will be responsible for monitoring HCA’s compliance with guarantees in the sales agreement and taking legal action or other steps if HCA falters.

Critics say people who have served on Mission boards would be reluctant to challenge HCA's actions in the future because that would call into question the decision by friends or colleagues — or in some cases, the board members themselves — to make the sale.

Friends and friends of friends?

Dogwood board’s current roster has a "very insular, self-serving quality," said Bill O'Connell, head of a local think tank on health issues affecting older people,

"You've got a cohort of people that are well intentioned, basically," he said. "The problem is that they've kind of selected people they're familiar with and look like them and talk like them."

O'Connell's organization, Communities for Older Adult Health, put on a one-day conference at UNC Asheville in August on health conversion foundations — those, like Dogwood is to be, created from the proceeds of sales of nonprofit hospitals or health systems.

"One of the things you learn is that you have a board that's representative of the community," said O’Connell, who spent his career working for nonprofits.

Stein also raised that issue in a Dec. 4 interview with the Citizen Times, and changes he negotiated in a deal proposed by Mission and HCA are designed to address that issue.

Under the new requirements, Dogwood board’s must by January 2020 have no more than five members from any one county, and by January 2021 it must have no more than four members from any one county.

Five members from outside Buncombe County must be added by 2021.

The new system agreed to by Dogwood divides WNC up into five regions and says at least one board member must come from each.

Two of the current members of the Dogwood board who live in Buncombe County agreed not to seek re-election once their current terms expire at the end of this year. Another Buncombe County resident agreed to leave the board before the end of 2020.

Stein said Wednesday that public comments played a major role in guiding negotiations between his office, Mission, Dogwood and HCA, including on the question of membership on the Dogwood board.

"When this board was initially constructed, all six members hailed from Buncombe County," he said. "Buncombe is a wonderful county, but there are a lot of counties in Western North Carolina that also have invested in their local hospitals."

Once the sale closes, no one can serve on both the Dogwood board and the Mission board. Dogwood also agrees that it will have a fully diverse board by 2020.

The board must be "fully and fairly representative of Western North Carolina across all dimensions, including ethnic, gender and geographic dimensions," according to a summary released by the attorney general.

Stein said Wednesday he believes members of the Dogwood board want it “to be transparent and accountable to the public.” Changes he obtained give his office the legal ability to make that happen if Dogwood does not pursue that goal with enough vigor.

“They realize they serve the good of the people and they want to earn people’s trust,” he said. “If they don’t have it now, I think they want to work to earn it and if they don’t, we just keep pushing them until they do.”

Rural people to attack rural problems

Russell said it will be especially important to have board members from rural areas as Dogwood deals with social determinants of health, like a shortage of jobs or affordable housing, in areas outside Buncombe County.

"You have to go into the community and ask community leaders what they want to see," she said. "Nobody really knows the needs of communities ... more than those communities. A lot of philanthropy is about building trust," Russell said.

The Mission Health board chose the first six members of the Dogwood board, Brumit said, then those six picked the next five.

She referred to a column by members of the Mission board who helped choose the first six Dogwood members that was published in the Citizen Times Nov. 11.

It said those selected had "impeccable credentials" including knowledge of "care gaps and unmet needs" in WNC. Some have longtime ties to the region in some cases and, she said, the group includes people "with exceptional experience in law, medicine, banking, finance and investments."

Alex Glover, a Mitchell County resident who is vice chairman of the board of Mission's Blue Ridge Medical Center in Spruce Pine, said he knows many of the members "and they are really smart, excellent individuals.”

“They are unbiased people that just give and give and give," Glover said.

Time for input is to come

Russell noted the trust will be managing wealth that WNC residents in large part created by using Mission services or donating to it. That means there is more of an obligation for public information and involvement than a foundation started by an individual donor or family, she said.

"Because they are created from very public-facing assets, there is — and I think should be — an expectation of public engagement and discussion about how the new foundation will operate and what it will focus on," she said.

She said she does not necessarily quarrel with the trust's choice of focusing on social determinants of health, but she said she feels it should have been made with more community involvement.

"This should be a time of deep learning, research and meaningful engagement for (Dogwood)," she said. "And transparency should always be at the forefront."

Highlands Mayor Patrick Taylor said Dogwood's board will be spending more annually than the county governments in many of the counties it is to serve.

That indicates a need for "meetings that are open to the public and announced," he said.

Brumit said the public will have opportunities to be involved later. She also noted Dogwood has not received any sale proceeds, since the transaction has yet to happen.

"Right now, the trust is in the process of doing very basic structural work," she said, and putting together the foundation and beginning operations "will be a deliberate, multiyear process."

"Significant opportunity for public input, suggestions and more will be an important part of how the Trust operates," she said.

The Dogwood board

Here are the members of the board of Dogwood Health Trust. Members who are past chairs of the Mission Health board are marked with an *.

Janice Brumit*, chair. Buncombe County. Owns and operates Arby’s restaurants in North Carolina and Upstate South Carolina.

John F.A.V. “Jack” Cecil*, vice chairman. Buncombe County, vice chair. Head of Biltmore Farms, the company behind Biltmore Park, Biltmore Lake and other real estate projects.

Dr. John Ball. Buncombe County. Current chairman of the Mission Health board and former CEO of the American College of Physicians and of Pennsylvania Hospital.

Vivian Bolanos. Henderson County, vice president and business development officer for First Bank.

Michell Hicks. Qualla Boundary of Eastern Band of Cherokee Indians. A certified public account who was previously principal chief of the Eastern Band.

Sam Lupas. Jackson County. A real estate investor, developer and broker in Cashiers, and board chairman at Highlands-Cashiers Hospital.

George Renfro*. Buncombe County. Retired co-owner of a Coca-Cola bottler.

Robert “Bob” Roberts*. Buncombe County. Regional vice president for First Citizens Bank & Trust.

Jacquelyn "Jackie" Shropshire Simms. Buncombe County. Has been a teacher in the state's early intervention program for children who are deaf and hard of hearing and director of the preschool satellite program of Western North Carolina School for the Deaf.

Wyatt Stevens*. Buncombe County. Attorney at the Asheville law firm Roberts & Stevens.

Martha Tyner. Yancey County. Business controller at Tyner Construction Co., chairs the board at Blue Ridge Regional Hospital.