City attorney: ‘We value that partnership — We’re going to look pretty closely at the agreement’

By Holly Dillemuth, Ashland.news

The city of Ashland on Thursday said officials are reviewing a 2013 agreement between the city and Asante and will monitor the Ashland hospital’s transition to a satellite of Rogue Regional Medical Center in May as announced by Asante on Wednesday, according to a city news release issued late afternoon Thursday.

Two anonymous sources at what’s been known since 2013 as Asante Ashland Community Hospital (AACH) confirmed that they were told by Asante executives in a town hall meeting Wednesday afternoon that the transition is planned to be complete by May.

When the hospital was transferred to Asante in 2013, the agreement held Asante to a commitment to operate Ashland Community Hospital as a “general hospital” for the next 15 years, until 2028. If this requirement is not met, Asante agreed to pay the city $4 million within 60 days of its closure as a general hospital.

“The city’s leadership team will continue to review the agreement and monitor the transition as more details are finalized,” the release states. “No decisions regarding any legal action have been made.

“The city values its long-standing partnership with Asante and will continue to work collaboratively throughout the transition,” the release added. 

Ashland Mayor Tonya Graham told Ashland.news on Wednesday that she, City Manager Sabrina Cotta, and City Attorney Johan Pietila met with Asante executives before the announcement hit.

“We had a conversation ahead of time with the leadership of (Asante) so (Wednesday) wasn’t a huge surprise,” Graham told Ashland.news Wednesday evening. “I didn’t have a lot of forewarning, but they reached out to make sure I knew this was coming.

Her comments reference the following excerpt, taken from the 82-page contract:

“Asante further agrees that it will operate ACH as a General Hospital for an additional 12 years [following an initial three-year period outlined in the contract]. In the event the twelve (12) year period of ACH operating as a General Hospital is not satisfied, Asante will pay to the city $4 million in full satisfaction of any liability or claim for damages, injunctive relief or otherwise arising out of this agreement … In the event the condition with respect to the $4 million payment by Asante is applicable, Asante will make the payment within 60 days of the date Asante ceases operating ACH as a general hospital.”

“That’s not part of the conversation at this point,” Graham added. “It’s not an issue.”

Prior to a news release being issued by the city on Thursday, Pietila, the city attorney hired by the city in April, told Ashland.news that the city was reviewing the agreement.

“(Asante’s) position is … that term satellite is defined as a building owned by the hospital within 35 miles and so they’re switching their license to Rogue Regional Medical Center,” Pietila said.

“(AACH will) still be a licensed general hospital and it’ll be a satellite building,” he added.

The 2013 agreement transferring the hospital to Asante states that Ashland Community Hospital (ACH) is located at 280 Maple Street, Ashland.

“We value that partnership,” Pietila said. “We’re going to look pretty closely at the agreement and as these changes roll out … the big issue would be, is that a satisfactory interpretation of the definitions? I don’t know that any cases have ever been heard on it, so we’ll have to do some digging … but we’re going to monitor it.

“My office’s department is just going to make sure that we take all the steps necessary to further the city’s legal interests and obligations,” he added.

One of the points of the five-point state definition of “general hospital” states a general hospital must “Provide at least general medical, maternity and surgical services.” 

The city emphasized that the changes are being made by Asante and that the city is “not involved in the decision-making process.”

“Like everyone in Ashland, I’m sad that the services that are being offered at the hospital are changing,” Graham told Ashland.news. “It’s an important community anchor in Ashland and we have been able to rely on a wide range of services at the hospital for a long time.

“I also know that the folks at Asante are not happy to do this, either,” she added.

Graham went on to say that many areas of the community are managing challenging times.

“We have a healthcare system that many would, appropriately, call broken, and we have our local nonprofit health care system doing its very best to maintain services across the region in the middle of that broken system,” Graham said. “It means there are going to be hard decisions.”

She referenced the 82-page 2013 document as an “old agreement” and said a lot has happened in the last year.

Graham said she and city leadership had been invited to take part in strategic planning sessions with Asante about the future of the Ashland hospital, though they were not part of the decision making process to close key areas of the hospital.

In an Ashland.news story dated Aug. 16, 2024, AACH CEO Brandon Mencini outlined plans not to close AACH and that “there would be no gap in coverage.” 

On Dec. 9, 2024, Ashland.news reported Mencini planned to grow the birth center.

“When you look at the cuts that are happening to the funding sources for a variety of different healthcare options, it changes the landscape very quickly,” Graham said.

“The Rogue Regional (Medical Center) is 11 miles up the road from Ashland,” she added. “The Rogue Valley itself has a wide range of medical options for people and I think it’s more necessary that it’s in close proximity than it is in our town specifically. But again, I’m sorry to see those services go. I think we all are.”

Graham said the city has been assured by Asante that the elimination of the birthing center and inpatient surgeries and admissions will put the hospital on a “sustainable path for the foreseeable future.

“That’s what we are holding to,” she said. “We’ll stay in close contact with the folks at the hospital in case there are any other future changes that might be heading our way,” Graham said. “At this point, (Asante) believes strongly that the changes that they’re making are what allows the hospital to maintain services in Ashland. They feel very confident that these changes are going to prevent us from having to be in another situation like this a couple years down the road.

“What they told us is that these changes, they believe, put Ashland (Community) Hospital on a solid financial trajectory for the foreseeable future,” she added, “so as far out as they can see.”

The agreement between the city and Ashland Community Hospital expires in 2028 unless both parties renegotiate terms.

This is part of an ongoing series of stories regarding the announcement to eliminate the Ashland Family Birthing Center and inpatient services at AACH. If you are personally affected by this plan or have more information, please reach out to Ashland.news reporter Holly Dillemuth at [email protected].

Related stories:

Asante plans to close birthing center, stop inpatient surgery at Asante Ashland Community Hospital in 2026 (Dec. 3, 2025)

Asante Ashland Community Hospital to grow birthing center, maintain emergency services, according to new strategic plan (Dec. 9, 2024)

Hospital will not close, Asante representative tells Ashland City Council (Aug. 20, 2024)

Asante CEO: ‘There will be no gap in coverage’ at Ashland hospital (Aug. 16, 2024)

‘Crisis at the hospital’: Potential loss of anesthesia services, surgical services at Ashland hospital concerns medical professionals (Aug. 8, 2024)

Ashland mayor, councilor weigh in on Ashland hospital concerns (Aug. 8, 2024)

Future of Ashland hospital: Concerned Ashland residents to address City Council at today’s meeting (Aug. 6, 2024)

Memo: Asante completes 3% workforce reduction across region, citing financial losses (Feb. 13, 2024)

Asante Ashland earns coveted designation for age-friendly treatment (Nov. 20, 2023)

Asante Ashland Community Hospital ICU to close by Jan. 1 (Dec. 16, 2022)