ABC-7 looks into details about EPCH, UMC deal

Two weeks stood between the first University Medical Center term sheet sent to El Paso Children’s Hospital and the one approved this week.

During negotiations between EPCH and UMC, ABC-7 has constantly mentioned term sheets. The sheets are essentially bullet points outlining the terms and conditions of a business agreement. That’s what attorneys use to craft the final contracts.

ABC-7 took a closer look at the differences in the term sheet released Feb. 23 and the one crafted Monday. The deal in place is meant to help Children’s eliminate the red ink on its books.

The agreed on plan says EPCH will remain a separate corporate entity for four years, instead of the two years listed in the first term sheet. UMC now has the right to appoint and/or remove Children’s Hospital board members. Also, an EPCH board member cannot serve as a director for El Paso First Health Plans.

Under the agreement approved by both hospitals, the CEO of El Paso Children’s will only report to the Children’s board, not UMC CEO Jim Valenti. He will have the power to select his own management team, without approval from Valenti. From here on out, UMC will provide services to Children’s at the actual cost. For months, Children’s officials claimed UMC was overcharging it for services.

Possibly one of the biggest changes is the removal of the bankruptcy clause. That was instead replaced with a joint communication plan. Also, the due diligence phase has been shortened from 60 days to end April 30.

“Through a lot of blood, sweat and tears,” UMC Public Affairs Director Ryan Mielke said about reaching an agreement. “A lot of understanding on both sides of what the needs are and how we can overcome those obstacles.”

ABC-7 spoke with one on the Children’s doctors who feared the hospital he works for would lose its autonomy.

“At least the dust is settled in somewhat but I think as physicians we definitely feel the burden of being the watchdogs in making sure that children’s care is excellent going forward,” radiologist Steven Ross said.