OFF THE RECORD: Hospital Footnotes

by Mark Scaramella, February 1, 2006

A FEW FOOTNOTES to Mr. Sanicki's report on the independent audit presented to the Coast District Hospital Board last week. Four people commissioned the audit — Tom Birdsell, Mike Dell'Ara, Richard Miller and Vince Taylor, aka the Hospital Resource Council. (Others are involved as well.) Birdsell and Dell'Ara are former Bay Area high-tech execs who have the expertise and the money to back up their criticisms. Dr. Miller is a wealthy psychiatrist in Fort Bragg. And Vince Taylor is the guy who brought suit against the state for its substandard Jackson Demonstration State Forest management plan — and won — and against Caltrans to get them to install a much better railing design on the new Noyo Bridge — and won. Taylor beat CDF and Caltrans in court — no small accomplishments. Now Taylor is on the Hospital management's case, and he's backed up by some serious expertise and money.

ONE OF THE most egregious findings of the independent hospital audit was that the hospital does what the auditors generously describe as "centralized budgeting" — meaning that the CEO's office prepares the departmental budgets and simply tells the departments what their budget is, turning the budgeting process on its head. In the corporate world, this kind of thing is either gross incompetence, management malpractice or an intentional attempt to cover something up. Either way, it's grounds for immediate dismissal of top management and financial staff.

ANOTHER AUDIT FINDING: "According to the CEO and the Board Chair, Fort Bragg is well known for its 'adversarial activists' who oppose most every proposition just for the sake of opposition." If only this were true. Apparently Ballard and each board member interviewed separately said essentially the same thing. It's not likely that we'll get the names of these "adversarial activists" before this "well known" situation is addressed.

THE AUDITORS ALSO WROTE: "It was noted that the hospital's mission statement and strategic direction probably is not as familiar to or as understood by key stakeholders as it needs to be. It was opined by the board chair that if the community better understood both the role of and externally-imposed limitations to the hospital's operations, perhaps the prevailing attitude that the hospital is or should be the panacea for all of community's health issues would be mitigated somewhat."
Stilted perhaps, but we've heard this before, right about the time Ballard & Co. offered to hold classes in hospital finances. Trouble is, as the auditors confirm, Ballard & Co. don't even qualify to teach elementary school math, much less hospital finances.

THE AUDITORS also observed that "The positive, polished and unified demeanor on each [Board] member's part notwithstanding, the impression gained was one of complete and, therefore, possibly counterproductive homogeneity among board members. Specifically, there was little indication of the presence of at least one member of the board who had in the past and/or was prepared in the future to unilaterally challenge data and proposals when appropriate or necessary to ensure that the issue being presented had been adequately studied through a comprehensive due diligence process and that the proposal being made had been afforded a similar in depth consideration."
Translation: Ballard spouts his "polished" bullshit and the bobblehead board nods.

THE HOSPITAL'S BILLING SYSTEM, the subject of a previous critical report in this newspaper (based on a hospital employee's first hand experience with the billing process/software) has also been exposed, again, as unworkable. Apparently, Hospital Financial Director Jacob Lewis has only recently discovered that bills which the hospital's expensive new accounting/billing system ("Meditech") says are "billed," are being rejected at a high rate by the "scrub" software at Medicare, MediCal and insurance companies, which reject a large number of the bills for a variety of reasons. The rejected bills are then left in limbo, with the Hospital thinking that they've been billed, but with many bill recipients having not received or accepted them. So of course, the bills are not paid. Bills which are not accepted as bills are not bills. Nobody knows how many bills are in this category. They only know that there are a lot of unpaid bills, some of which are turned over to collection agencies, only to discover that some of the people notified by the collection agency never knew there was a bill in the first place! By way of comparison, the bill reject rate at the neighboring Coast Clinic is way down in the single digits.

AMONG THE AMUSING aspects of the audit report according to "various interviewees" whom the auditors spoke to, Fort Bragg is made up of "three distinct groups, or 'target audiences' — (1) descendants of the original blue-collar settlers of loggers and fishermen; (2) 'hippie generation holdovers'; and (3) affluent 'baby boomers' who have retired early and moved to the area for a particular lifestyle." The consultants didn't dispute management's simplistic demographic breakdown (which management implies are all unqualified to comment on the hospital's operations) but simply recommended that the hospital needed to tailor its sales pitch better for each group. It's true that the hospital is suffering from bad PR. (Unfortunately, Fort Bragg Advocate reporter Connie Korbel's "reporting" (i.e., printing Ballard's press releases) was outside the scope of the independent audit.) But the bad PR problem is the result of bad management practices which don't meet the smell test when they're presented to the public. As long as the hospital is badly managed, the PR will also be bad, no matter how hard Ballard tries to "explain" or "rebut."

"EFFORTS by the board and management to 'keep the public informed and involved' are viewed by the community as not much more than 'going through the motions' by the board," said the independent audit team. "There seems to be a pervasive feeling in the community that it's not worth the effort because public discussion and input in public meetings rarely make any difference in the decision or produce any substantive changes. The perception is that the decision has already been made, but the public will be given its '15 minutes of say' before the decision is announced."

CONTINUING: "While a few [interviewees] described [CEO Ballard] as 'smooth' — possibly too smooth for this community, as he sometimes comes across as insincere and too detached for an already suspicious populous — others offered an opposing point of view, giving him high marks in 'one-on-one situations,' but then seeing him as weak and indecisive in group settings. Whether the first or the second view, it seems clear the there is both an image and a credibility issue as related to the CEO, one which has allegedly impacted his efforts at improving relationships with the staff and the community and must be more effectively addressed."

"THERE WAS little evidence that the financial staff is reviewing financial statements with the intent of identifying the factors contributing most to the unwanted numbers." (Automatic grounds for firing management.)

THE AUDITORS recommend that the hospital deal more effectively with the hospital's employee union, but there's no indication that anyone (including the auditors) has spoken to the union or its representatives to find out what their questions or recommendations actually are.

THE AUDITORS also seem mystified by the hospital management's seeming ignorance of the obvious patient drain from the Hospital. Not to mention the "exodus" of senior staff which has seen a number of important, long-time middle managers quit in frustration in recent months.

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