In a stunning consolidation of power, the Centegra Health System Board of Trustees changed its by-laws to eliminate the community members who elected them.
The result is the transformation of a community-based, not-for-profit corporation–created in 1982–to a tightly-held, self-perpetuating governing group.
In a letter to “Centegra Supporter,” dated October 7th–thirty days after its vote–the Board of Governors announced they
“have streamlined their processes for corporate governance so that decisions can be made quickly and flexibly in a rapidly changing market of healthcare services.
“in order to align Centetra’s governance structure with all the other positive advances our organization has made during the last decade, the Centegra Board of Governors has exercized its authority to make changes in the way in which the organization is governed.”
The letter continues that by-laws were amended September 9th as follows:
- “The concept of ‘regular’ corporate members has been discontinued and members of the community at large will no longer serve as regular members. However, those corporate members who have been designated as ‘life members’ [those who have contributed $25,000 and been approved by the Board] will continue to be recognized as such;
- “The corporate members who have been retained will no longer vote. The Centegra Board of Governors will maintain exclusive authority and accountability for taking action in the best interest of Centegra and the community, consistent with its fiduciary duty under Illinois law.”
The letter points out that most of its competitors have no corporate voting members.
“The need to have corporate members in order to engage the community has been mitigated by the transparency and processes required of tax-exempt hospital systems.”
The Board of Governors says that other means of communication with McHenry County’s 330,000 citizens have been developed.
Near the bottom of the letter is the following heading and paragraph:
“Why the Change Now?
“When the Centegra Board of Governors voted to amend the by-laws on September 9th, it was only after a careful evaluation of the history of corporate members in the Centegra Health System, the best practices in the health care industry and the more practical aspects attendant with the need to more quickly. Ultimately the Board unanimously determined that the best interest of both the organization and the community we serve.”
This is the final paragraph:
“It is All About Community
“We, as the Board of Governors, are and will continue to be committee to our community. We are all members of the community, and we depend upon Centegra Health System to provide high quality care for our families and our friends just like each of you do. Preserving and protecting our health care system and fulfilling its mission in serving our community is a charge none of us takes lightly. We are confident you understand the reasoning behind the changes outlined above, and we very much appreciative your continued support of, and commitment to, Centegra Health System.
The letter has the signatures of the members of the Board of Governors:
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In reaction, Dr. Bill Dam said,
“All my efforts to generate some transparency and they dissolved the community organization that elects the Board members in the first place.”
A friend of McHenry County Blog, who sent me the letter, wrote,
“The Centegra Board’s message to its members: ‘Thanks for being a member. Your services are no longer needed. Don’t let the door hit you in the a** on the way out.'”
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Below is a time line with article titles and story links since Dr. Bill Dam informed me of what was happening:
- 6-10-13 Centegra Administration Trying to Cut Doctors Power
- 8-30-13 Dr. Bill Dam Seeking to Re-Direct Centegra
- 9-7-13 Centegra Board of Governors abolishes community members
- 9-13-13 Centegra Responds to Dr. Bill Dam’s Special Meeting Invitation – “[Do] Not Attend”
- 9-16-13 Centegra Letter Urging Non-Attendance at Reform Meeting Stimulates Reply by Dr. Bill Dam Inviting All
- 9-24-13 Centegra Holiday Inn Meeting Wednesday Night to Consider Hospital Systems Direction
- 9-26-13 Dr. Bill Dam’s Meeting on Reforming Centegra – Part 1
- 9-26-13 Press Release on Dr. Bill Dam’s Meeting to Reform Centegra
- 9-26-13 Bill Dam’s Power Point Presentation
- 9-27-13 Dr. Bill Dam’s Meeting on Reforming Centegra – Part 2
- 9-28-13 Dr. Bill Dam’s Meeting on Reforming Centegra – Part 3
- 9-30-13 NWH Finally Notices Physician Dissatisfaction with Centegra
- 10-7-13 Date of Centegra’s letter to citizen corporate members telling them of the September 7th decision that they no longer had a vote
- 10-8-13 Centegra Hospital Docs Mull Legal Action