DELAWARE — Grady Memorial Hospital’s longtime general counsel said he was “shocked” by OhioHealth’s decision to close the hospital’s inpatient maternity unit.
Jonathan Lewis served as the hospital’s general counsel from 1985 to 2005 during negotiations surrounding Grady Memorial Hospital’s affiliation with OhioHealth. He believes the planned closure conflicts with commitments the health system made when it assumed control of the hospital two decades ago.
“Having seen in the news that OhioHealth was closing the labor and delivery unit, I knew that that was, in my opinion, completely at odds with what they agreed to do in the affiliation agreement in 2005,” Lewis told Delaware Source.
“I was just shocked, upset, and I didn’t think OhioHealth was doing what they had agreed to do.”
OhioHealth announced June 10 that it will discontinue inpatient maternity services at Grady Memorial Hospital effective July 31. The health system said the decision followed “a careful evaluation” by a team of experts, including specialty physicians, who reviewed the program.
After reading OhioHealth’s public statements defending the closure, Lewis said he felt compelled to write an eight-page legal analysis explaining why he believes the health system is misinterpreting the 2005 affiliation agreement.
The analysis was emailed to the Ohio Attorney General’s office, OhioHealth President and CEO Dr. Stephen Markovich, Delaware Mayor Carolyn Kay Riggle and Delaware City Manager Paul Brake.
OhioHealth has maintained that it has the legal authority to close Grady Memorial Hospital’s inpatient maternity unit.
“Our position remains unchanged,” OhioHealth said in a statement to Delaware Source on July 8.
“We continue to meet the spirit of the agreement and deliver a level of services that the community needs. The agreement states that certain services are to be maintained subject to adequate demand.”
Lewis argues those statements are inconsistent with the agreement he helped negotiate.
“The point of that agreement was that it was anticipated that the health care scene would change, evolve, grow, there would be new players, there would be a need for new resources, new facilities, and it was the concept that Grady would continue to grow,” Lewis said.
“It wouldn’t be static, it wouldn’t be stuck in 2005. It would do what’s necessary in the coming years after that to be competitive, and to be competitive would mean you would not withdraw core services; instead, you would strengthen them.”
He also noted he is speaking only on his own behalf.
“My opinions are my personal observations having been counsel to the hospital in 2005,” he said. “I do not represent any individual or entity involved in this matter.”
What does the affiliation agreement require?
Lewis’s analysis centers on several provisions of the 2005 affiliation agreement that he believes OhioHealth is misinterpreting.
The agreement states that OhioHealth will maintain and operate “an acute care hospital” within the city limits of Delaware.
It also states the hospital “shall maintain the complement of Core Hospital Services” outlined in the agreement. Those include dozens of clinical services that were being provided at Grady Memorial Hospital when the agreement was signed.
Services referenced include obstetrics, emergency services, surgery, oncology, cardiology, rehabilitation services and laboratory services.
The agreement states those services are to be maintained “in the same manner and subject to adequate demand” as they existed when the agreement was signed — language that has become central to the current debate.
Another provision requires OhioHealth to maintain Grady Memorial Hospital in a “market-competitive condition” until such time as it constructs a replacement acute care hospital within the city limits of Delaware.
The role of the Healthcare Foundation of Delaware County
OhioHealth has argued that because the Healthcare Foundation of Delaware County dissolved in 2021, “the agreement is no longer.”
Lewis said that statement “made my ears explode.”
He said the agreement is primarily a contract between Grady Memorial Hospital and OhioHealth, with the Healthcare Foundation serving as an additional signatory and the entity designated to enforce OhioHealth’s obligations.
“The Healthcare Foundation has nothing whatsoever to do with the enforceability of this agreement,” Lewis said. “Whether or not there’s a foundation is, in my mind, completely irrelevant and unserious and unimportant.”
Lewis also argues the agreement contains no provision stating OhioHealth’s obligations would end if the Healthcare Foundation ceased to exist.
“There is no provision in the definitive agreement stating that OhioHealth would be relieved of its otherwise mandatory obligations in the event the foundation ceased to exist,” Lewis said.
“Had the parties intended that to be the case, they would have certainly included that prominently in the agreement. They did not. In my opinion, the absence of such a provision proves that was never the intention of the parties.”
To illustrate his point, Lewis offered a hypothetical.
“Imagine it’s 2005 and one year later, all of those foundation members happen to pass away,” he said. “Would somebody seriously argue that OhioHealth no longer has to perform the obligations of this agreement because this group no longer exists? That’s silly.”
Lewis: The agreement was meant to be enforceable
Lewis said another indication of the parties’ intent is the remedies written into the agreement if OhioHealth failed to fulfill its commitments.
The agreement authorizes the Healthcare Foundation to seek injunctions, specific performance, damages and other equitable relief if OhioHealth breached its obligations.
“Those are very extraordinary remedies that were put in that affiliation agreement,” Lewis said. “Those kinds of provisions in contracts are not common unless the parties intend them to be performed and to be very serious.”
Lewis also disputes OhioHealth’s characterization that it is continuing to honor the “spirit of the agreement.”
In his written analysis, he argues the agreement “did not merely articulate broad goals or aspirational statements,” but instead established “a framework for accountability and enforcement.”
Lewis said the commitments ultimately were intended to benefit the Delaware community.
“When a large hospital takes ownership of a smaller hospital — and in exchange for that, the assets, the finances, everything — when they do that, they make commitments,” Lewis said. “And those commitments are intended to be binding. And the beneficiary of those commitments are the community.”
What happens next?
Lewis said he believes the question now belongs before the Ohio Attorney General’s Office.
In his written analysis, Lewis argues the dispute extends beyond the planned closure of Grady Memorial Hospital’s inpatient maternity unit.
Instead, he writes, it concerns “the public trust that accompanies commitments made when a community hospital entrusts its hospital to another charitable healthcare system.”
Lewis argues Ohio law places responsibility for protecting charitable assets and the public interest with the Ohio Attorney General, and that the office is the appropriate authority to determine whether OhioHealth continues to fulfill its obligations under the 2005 affiliation agreement.
He said he emailed his legal analysis to the Attorney General’s office and later followed up to confirm it had been received.
“I did send it off to the Ohio Attorney General’s office,” Lewis said. “I followed up with an inquiry to make sure they had seen it and I got a short note back from the Charitable Law Section chief saying he had received it.”
Delaware Source has asked the Attorney General’s Office to respond to Lewis’s legal analysis, clarify whether it believes the 2005 affiliation agreement remains enforceable, and explain whether it believes it has authority to enforce the agreement following the dissolution of the Healthcare Foundation of Delaware County.
The newsroom has also submitted a public records request seeking records related to the Attorney General’s review, the dissolution of the Healthcare Foundation and any legal analyses or communications regarding the affiliation agreement.
As of publication, the Attorney General’s Office had not responded to those requests. The office previously told Delaware Source it was continuing to review the Delaware City Council resolution and the relevant documents.
