MAKING CHANGE WORK FOR THE DANVILLE AREA

By B. R. Ashby, M. D.
May 12, 2005

“Where there is no vision, the people perish,” Proverbs 29:18

      This week the Board of Directors of the Danville Regional Health System announced an historic decision that will shape the future of the Danville area forever.

       In exercising its legal responsibility, the Board has made a difficult decision, one that will ensure the availability of the best healthcare services possible for the citizens of our community. Over the years, the Health System has grown in value and become one of the most significant assets of the Danville area. Unfortunately, our community has not kept pace with the growth of the Medical Center. We struggle with the realities of ongoing job loss, plant closings and the decline of tobacco.

       As a life-long resident of Danville, I can attest that we are a proud people. We are proud of our history and proud of our home-grown businesses. But, as Max DePree writes in The Art of Leadership, our “first responsibility is to define reality.” And the reality is that it takes more than hard work and pride to survive, and thrive, in today’s global economy.

       We have a vision, and we must have the resources to make that vision a reality.

       Based on current trends, our community faces tough challenges. What is our
future? What is in store for our community? What is happening to our young people after they complete college? Do they return to Danville, or do they feel the need to seek a more promising career elsewhere?

       The members of the Board are long time residents of the Danville area who
expect to live here the rest of their lives. We are here by choice, and see and feel what is happening to our community. We know the pain and anguish when opportunities are lost. As Board members, we are guided by one principle – determining the right thing to do for our community.

       In agreeing to sell the Medical Center and related assets, the Board will accomplish two major goals:
       · Secure the future of healthcare for citizens in the Danville area, and
       · Create a foundation, funded by secured financial resources that will benefit this
community into the future.

       Across America, independent hospitals in rural areas are at risk. The
pressures on them are heavy. At least three hospitals in Virginia have declared
bankruptcy in recent years. At least four other community hospitals have been sold, and used the proceeds to establish multi-million dollar foundations to enhance the health, education and welfare in their communities.

       While Danville Regional is in a slightly different position from those hospitals, in
that the organization is performing at a high level, we face the same challenges. One
ongoing issue for the Medical Center is Medicare and Medicaid. More than 70 percent of our patients depend on these government programs, which could be reduced at any time. Finding the funds to reinvest in our facility and technology is another major issue.

       In early 2004 we engaged legal counsel experienced in health care matters. After
conducting an orderly and systematic analysis for more than a year and a half, the Board of the Health System came to a unanimous conclusion: Sell the hospital and use the proceeds to benefit the Danville area. You may well ask why sell now, if Danville Regional is performing so well? The Board feels that now is the best time while the value is high. In a position of strength, the Health System has more options and brings a higher price, which means greater resources for the community.

       The Board considered a number of outstanding healthcare organizations, both notfor-profit and for-profit, as its partner. We asked the tough questions about how they
would operate Danville Regional. We studied and even visited hospitals operated by
these organizations and talked with leaders in those communities. At the end of our
careful and thoughtful analysis, we concluded that LifePoint Hospitals, Inc. is the organization that best fits the Danville model of “providing healthcare excellence close to home.” LifePoint has agreed to maintain the existing levels of charity care, offer jobs to all existing employees and retain the existing services. The name, Danville Regional
Medical Center, will remain.

       Unfortunately, we were at a serious disadvantage by not being able to communicate during this negotiating process. Confidentiality agreements are required when publicly traded companies are involved.

       We are confident that LifePoint will continue the tradition of healthcare
excellence we have provided. In fact, we expect that LifePoint will improve and expand
our existing services. LifePoint also will be a strong corporate citizen. Healthcare is in
good hands for the Danville area.

       As we look at our community, we are overwhelmed. Everywhere we turn, there
are unmet needs. The health, education and welfare of the people of the Danville area are our priority, and it takes financial resources to address those concerns.

       Investing the approximately $200 million from the sale of the hospital into a
community foundation is the best way to serve these needs. The funds from the sale
itself will not be spent; instead, the investment of those funds will be distributed to
organizations which benefit the Danville area. Similar foundations distribute
approximately 5 percent of their returns annually.

       The Medical Center has enjoyed the loyalty and support of our community for
more than 120 years. Because of that support, we seized the opportunity to secure quality healthcare and return major support to the community in the amount of millions of dollars a year.

       The Danville area can become a model for communities that had the courage to
recognize an opportunity, and take the necessary steps to reshape the future. By
becoming masters of our own destiny, we can make our vision a reality.

       This is an extraordinary opportunity to make an extraordinary difference at an
extraordinary time in the history of our community.

A Danville native,

B. R. Ashby, M. D.
Chairman of the Board of Directors and CEO
Danville Regional Health System.