Supplementary Coast Hospital Board Meeting Notes

by Mark Scaramella, February 15, 2006

At the Hospital Board Meeting on February 9th when the Hospital Resource Council recommendations were discussed (see savethehospital.org), Hospital Board Chair Charlene McAllister noted in passing during the discussion of the $250 San Francisco-based affiliation consultant that the CEO can authorize up to $25k without board approval. What a coincidence that the expensive, non-competitively-bid affiliation consultant's "phases" are broken down into $25,000 increments.

The items discussed during the February 9th board meeting discussed by Mr. Taylor were general management topics which were easy for Ballard to dismiss as either already done, already being done, or disputed. One had to go to the Board handouts to discover Ballard's "responses" to some of the more specific HRC recommendations, most of which were to dismiss the findings and recommendations of HRC or HRC's independent auditor by declaring them to be "incorrect."

At one point Ballard pompously declared, "HRC is implying that these [Delta One, the hospital paid auditors hand-picked by Ballard] professionals are not doing their job when it comes to MCDH, and yet HRC has neither accurately named any specific shortcomings with these other findings, nor made any suggestions that would directly and significantly impact the hospital's finances."

Nothing could be further from the truth. HRC listed many shortcomings and made several financially significant recommendations.

As for things that would "directly and significantly impact the hospital's finances, here's what Ballard handed out as a "Partial List of Accomplishments, June 2005-January 2006."

"Community Involvement - we asked for it, and got lots of it! Hospital program changes: Restructuring, Physician Recruitment, Increased Revenues, 20% expense reduction, Reduction in Health and Workers' Compensation expenses. Taken together we reduced our project budget losses from operations for FY2006 by about $1,000,000. (This leaves us -$138,000 from break even for the year.) Additional savings are expected this year from physician recruitment and continued aspects of the 20% expense reduction program.

"Affiliation study. Critical Access Hospital Status. Rural Health Clinic Licensure status. Clinical Information System implementation. Public and Employee Forums and Focus Groups. Website Update. Patient Services Building. Medical Office Building. Five day a week MRI. Community Based Public Relations Plan."

This kind of vague, meaningless, medical-buzzword blather permeates the Hospital's response to the audit performed by the Rural Health Management Corporation hired by the HRC. Even the hospital's own hand-picked consultant — Delta One Partners — opened its remarks by saying, "Excluding financial considerations, Mendocino Coast District Hospital is a well-run organization."

Particularly annoying was a short presentation at the Board meeting by the Hospital's Personnel Manager, Scott Kidd, who talked in familiar we're-all-in-this-together Nice-Person-ese, claiming that it's some kind of accomplishment for management to listen to the employees and everyone's working as a team "to make the best hospital possible," blah, blah, etc.

Obviously, these rigged employee sessions produce nothing of value because no one with a critical remark is going to tell management what they really think. Management has already made it clear that employee critics run the risk of being declared "disruptive" and will be dealt with harshly — unless they limit their criticisms to what management considers to be "honest criticism."

Ballard's response to the critical issue of the hospital's medical staff not reciprocating by bringing patients into the hospital in accordance with their hiring agreement — after the Hospital pays big bucks to get them on staff — was a typical denial: "We review the contracts annually. Admissions are not the only measure of contribution; for example a physician who performs mostly outpatient surgery on the hospital campus is able to benefit the hospital's bottom line even without inpatient admissions." (How?)

The Rural Health Management Company (RHMC) auditors also noted that some doctors don't accept some insurance plans. Ballard's response: "They all are required to do so [but they're not], and getting provider numbers has taken longer than anticipated." I.e., they're working on it — at the same sludgelike pace that produced a multi-million dollar overrun of the Hospital's expansion project.

Regarding the out-migration of patients, Ballard responds, "We have set up an ad hoc committee to look at it."

Regarding more active involvement of the hospital's employee union, Ballard responds simply, "The current union contract is effective through June 2007." Which means absolutely nothing.

Regarding RHMC's observation that the Hospital does budgeting by management decree, Ballard says not true, the departments do their budgets and turn them in to management. But Ballard's own description of the budgeting process says that Departmental budgets are unilaterally cut by the CEO and CFO.

Ballard also simply denies that hospital district board reflects "excessive homogeneity," saying that the Board regularly disagrees with management. But no examples are given. In fact, in the same board meeting last week, all the votes for the matters that came up were the typical 5-0 votes, including the one to move forward with a seven-phase ($25k/phase) affiliation study conducted by a $250/hour consultant. (The board is going to approve each phase separately, but it would be impossible for them to stop in mid-stream.) They also voted 5-0 to approve a four-week contract with an expensive computer consulting outfit to help them iron out the well-known hospital's accounting and billing problems — problems they've known about for over a year and still haven't solved.

Options for affiliation with a commercial hospital chain, as we have said before, don't all require a vote of the public — only outright sale. The Hospital told the Hospital Resource Council that they're already considering affiliation (by hiring the $250/hour consultant). The trouble is that the Hospital's finances are still in such bad shape that it will be hard for any "bidders" to make firm affiliation offers because their own finance people will have trouble figuring out how much liability they may be taking on by affiliating.

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COAST HOSPITAL has set up an ad hoc committee which is supposed to be evaluating options for affiliation. But the affiliation process appears to be wired by CEO Bryan Ballard. Ballard chose an expensive affiliation consultant named Barbara Reiss to study the options for $250 per hour without competitive bidding and without his own board's approval. By breaking the $250/hour affiliation study process down to $25k "phases" Ballard avoided board approval of the project and the choice of consultant. By awarding the initial study contract at the $25k level Ballard could pick someone who he knows will be malleable and can tailor the options to suit Ballard. It's probably safe to say that Ballard will not suffer personally in the move. Consultant Barbara Reiss and Ballard himself are, of course, on the "ad hoc affiliation committee." The committee is going through each $25,000 phase led by the nose through interviews with representatives from potential institutions. Ballard by spending hard-to-come-by hospital dollars in $25k increments, Ballard plans to drag the entire process out to what he says will take a minimum of 18 months — which may make the whole idea of affiliation irrelevant since the hospital's financial problems are much more short term that 18 months.

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