RHG terminates agreement with SMH

SMH on Aug. 3 replaced SMH CEO Wayne Reid with Jason Edwards, a move RHG claimed was in violation of the contract signed in April between the two, and gave SMH until the close of business August 7 to sign an amendment handing pay and supervision of the CEO over to SMH and releasing RHG from liability.

SMH did not sign the waiver, SMH attorney Mark Weaver said today (Tuesday), thus RHG sent the letter terminating the agreement.

“After considering the proposed contract amendment offered by RHG, SMH took no action to agree to the amendment or make any counteroffer to the agreement,” Weaver said. “As a result, RHG terminated its services.”

RHG was clear in its reason for terminating the contract, stating in its letter to Bruno it was “prompted by statements expressed by various members of the board and also the board’s removal of our employee, Mr. Wayne Reid, as the chief executive officer of the hospital and barring Mr. Reid from entering the hospital.

“In light of those statements and actions, RHG has unilaterally determined, in its sole discretion, that conditions created by the hospital with respect to RHG’s performance of the agreement are no longer conducive to RHG maintaining a constructive working relationship with the hospital necessary to a successful conclusion of the project and work that RHG was engaged to perform.”

RHG’s termination of the contract comes on the heels of the resignation of three of the six board members. Board members AJ Seay and Willie Strader resigned from the board Aug. 1 effective immediately. Then last week, Judy Thompson resigned. Earlier in the month during open sessions of the board, Thompson criticized RHG and progress made by the group and its employees. During a board meeting Aug. 9, she apologized for her comments the past two meetings and offered her resignation for health reasons, effective the end of December.

That night the board announced it would take applications for the two vacant board positions, and are to meet tonight (Tuesday) to interview candidates.

A 2021 audit showed SMH with a $6.4 million loss from operations, and it dipped to three days cash on hand, according to RHG. The SMH board fired CEO Kasey Lucas and hired RHG to come in and manage the hospital.

In a press release earlier this month RHG stated it was hired by the SMH board in February 2022, and “encountered a critical situation where the hospital had a mere three days' worth of cash reserves and faced imminent closure. Most notably, the laboratory operations were shut down, and the hospital was operating without a CEO. Through dedicated efforts and strategic management, RHG has played an instrumental role in turning the hospital's fate around.”

RHG claims the work it and the SMH staff have done has resulted in the hospital now having 30 days cash on hand and bounced back from the $6.4 million loss from operations to $1 million in fiscal year 2023. RHG's release says Reid “played a pivotal role in minimizing operating losses.”