Parcel Taxes & Legal Counsel
by Malcolm Macdonald, March 30, 2016
Bob Edwards, the Chief Executive Officer (CEO) of the Mendocino Coast District Hospital (MCDH) does not want the public to know what is discussed at standing committees of MCDH's Board of Directors. At a March 22nd Planning Committee meeting Edwards claimed “trade secrets” after a letter, presumably authored by an attorney, was discussed at some length by Edwards, MCDH Board members Kitty Bruning, Dr. Peter Glusker, and several civilian members of the Planning Committee.
The letter appears to be a communication from a lawyer who is potentially seeking out MCDH as a client. The contents of the letter seem to indicate that the attorney would be willing, for a fee, to guide MCDH through a process that could potentially change its status from a “District” hospital to a “Hospital Fee Reimbursement” institution, possibly governed by a non-profit board instead of a publicly elected board of directors.
The words public and civilian are relatively crucial here. At that March 22nd MCDH Planning Committee meeting the audience was comprised of two or three MCDH staffers and one member of the press. Once the aforesaid letter was thoroughly discussed, the lone member of the press requested it be made public, meaning added to the meeting packet on-line and/or handed over in person. This is when CEO Edwards called out, “Trade secrets,” and Planning Committee Chair Bruning nodded, rather feebly.
That evening Edwards sent the AVA the following: “I spoke with Legal Counsel, regarding making you a copy of the document [name of civilian MCDH Planning Committee member here] had in her possession during the Planning committee meeting.
“The document… is an Attorney-Client privilege document, and because it is such, I cannot release it to you as it has trade secret information.”
Edwards did offer his apologies for not releasing the document; however, sorry doesn't really cut it for the chief executive of a public hospital who won't let that very same public know the full extent of documents that could prove crucial to the future plans of said hospital.
Members of the public need only take a look at the MCDH February Board meeting minutes to grasp where things may be headed. Quoting those minutes, “Mr. Edwards reported on Hospital Fee Reimbursement for District Critical Access Hospitals and those Critical Access Hospitals governed by Non Profit Boards…
“Recent discovery by MCDH surfaced around finding disparities between Hospital Fee reimbursement (NOTE: Provider Tax Assessment with Medi-Cal and IGT funds) for District Critical Access Hospitals and those Critical Access Hospitals governed by Non Profit Boards.
“FACT: MCDH had a net receivable of about one million dollars last fiscal year, plus had to submit over one million of its own dollars to receive its IGT (inter government transfer monies).
“FACT: Some Non Profit Boards of Critical Access Hospitals have been receiving four to six million dollars via the Provider Tax, and are exempt from sending in their own monies for a match (IGT monies).
“Recent conversations have been held that focused on MCDH exploring an alignment with another Hospital or Hospital System that could enhance the financial performance of MCDH. Within the last month, the Administration has discovered that two District Hospitals are in the process of exploring how its District Critical Access Hospital could convert to a Non Profit Hospital Board so it could receive the higher amount of Provider Tax reimbursement. Changing to a Non Profit Hospital
Board would be addressing how changing the oversight of MCDH would improve financial viability, plus it would be able to retain local control.
“FACT: An annual three million dollar improvement could be made to MCDH if we became a Non Profit Critical Access Hospital.
“FACT: To change the oversight of MCDH to a Non Profit Hospital, would take a vote of the people.
“FACT: It is possible to have the District Board remain in place, thus having the ability to receive Parcel Tax Revenues.
“MCDH would propose that if MCDH would be managed by a Non Profit Board, after a vote of the people, that the difference in monies, for rounding purposes of three million dollars per year, would be used to design, fund, and construct a replacement facility. We believe that one-hundred-twenty million dollars (or more) could be set aside for these purposes.”
Readers may want to keep in mind that some of the things CEO Edwards calls a “FACT” could well be called subjective allegations by others. In a document passed out in support of a $150 - $250 per parcel tax (!) Edwards claims “a strong partnership with our Labor Union, resulting in zero wage increases for this year.”
If you want to know if someone is reliable, sometimes it is important to check out history, especially when that history is less than a year old. Here's what was reported in the AVA about last summer's contract negotiations between hospital administration and MCDH's employee union:
“The union ratified the contract proposal, with approximately 85% of its voting members in favor. The contract thus agreed upon is a one year extension of the existing contract. The idea to continue under the old contract for one more year came from the union. The bigger story lies in what the hospital administration had previously offered the employees union. According to a source familiar with the situation, initially MCDH offered a proposed contract that would have 'trashed' the health insurance benefits of the employees, greatly increasing what employees would have to pay out of pocket for less coverage in order to maintain any health benefits whatsoever.
“The union flatly refused that offer. Next, MCDH apparently attempted a divide and conquer strategy by offering the hospital's nurses, lab technicians, and X-ray techs a 10% raise. The flip side of that offer: every MCDH employee below the nurse and tech salary level would end up paying for their own insurance. The best guess is that the contract proposals to the employees union came directly from Mr. Edwards, considering that at least one member of MCDH's Board of Directors was not fully aware of the negotiation tactics.”
This is what Edwards describes as “a strong relationship with our Labor Union.” I have no idea why he chose to capitalize “Labor Union.”
At the February MCDH Board meeting Dr. Glusker said he and Dr. [William] Rohr had received an email from a company that purports to do the same thing as the attorney Edwards wanted to bring on board. According to Dr. Glusker, Dr. Rohr would like to make a presentation to the Board regarding the company (possibly Med First Partners) with whom he has spoken. Dr. Rohr, Dr. Glusker and another Planning Committee member have seemingly been pursuing this notion for some time.
After Glusker's statements, attempts to bring Edwards' plan to a motion were tabled. However, a glance at the March 31st MCDH Board agenda shows a presentation by Edwards' man, attorney Lloyd Bookman.
Which brings us back to the MCDH Planning Committee meeting of March 22nd. Presumably, the letter that Edwards slammed the door on was one from an alternative attorney to Mr. Bookman since the letter in question was apparently brought to the Planning Committee by the civilian committee member working with Drs. Glusker and Rohr. This might make readers wonder, is this is all part of an ongoing power play between Edwards and certain members of the MCDH Board (most obviously, Drs. Rohr and Glusker)?
Edwards putting the kibosh on public access to the letter should make any member of the public question why Edwards doesn't want the public to see or read possible alternative moneymakers for MCDH. Or, in a more sinister motive, did Edwards quash the alternative letter because its details show that his plan won't actually benefit MCDH all that much? Citizens within the Mendocino Coast Hospital District might want to consider attending not only the March 31st MCDH Board meeting, but, also, meetings of its Planning and Finance Committees. Members of the public might want to ask what happened to the planned mediation (recommended by the Board's attorney) between the Medical Executive Committee of MCDH, the Board of Directors, and hospital administration. The outside mediator offered up meeting dates of March 21, 22, and 23, but those days have come and gone without any mediation.
For some reason a line from the classic late '60s film Cool Hand Luke keeps popping into my head, “What we have here is failure to communicate.”
(Malcolm Macdonald's website is: MalcolmMacdonaldOutlawFord.com.)
LOUISE MARIANA, a long-time senior nurse at Coast Hospital, updates us on the status of the Hospital’s about-to-be proposed Parcel Tax.
Monday's meeting with CEO Bob Edwards was for employees only — to get us on board and all on the same page regarding the proposed parcel text for the Coast Hospital.
And there will be public meetings in the near future.
Nothing is fixed in stone yet. We will be doing phone surveys to see how much people are willing to pay for a parcel tax.
Right now the board thinks $150 for everybody is fair. But is it?
The poor elderly in an alley house and the rich who own 4000 square-foot mansions on the headlands — they pay the same?
Certainly a two- or three-tier system would be more equitable.
There are 12,000 parcels in the Coast Hospital District.
40% are owned by people who live out of the district, out of the county and out of the state!
Stay tuned -- more to come.
Attached Coast Hospital Flyer:
Potential Parcel Tax: Frequently Asked Questions
What has Coast Hospital already done to get its house in order?
People: We have added talent to our senior leadership team and recruited a diagnostic imaging director, an engineering director and an orthopedic doctor. Additionally we have a strong partnership with our labor union resulting in zero wage increases for this year.
Finance: we have cut costs, improving our budget. Also we have improved reimbursements from third-party payers for MediCal and we created a capital budget to plan for facility improvements. As a result of these successes (and many others) we have exceeded our "break even" budget goal.
Services: We grew the rural health clinic, added pain management services and our case managers are now calling discharged in-patients.
Processes: Never post Events on our quality scorecard? Leader Rounding/Nurse Rounding is now done on patients and all departments. Performance check ins are now regularly completed by leader employees. Our medical staff "quality scorecard" allows us to evaluate our performance with every patient and Joint Commission readiness resulted in no direct patient deficiencies.
Promotions: Now we regularly advertise for services, providers and publicize our accomplishments.
Has Coast Hospital asked to become affiliated with other health services? What were the results?
Yes — but no one was interested because of our debt, our unions, the age of the facility, our market share, and the average age of our physicians. However, without affiliation, the community retains local control.
What problems would a parcel tax solve?
Other departments currently subsidize many of the emergency room's operating losses. The parcel tax would fund critical emergency-room expenses also allowing departments currently supporting emergency services to use more of their own revenues to further improve their own services — as well as Coast Hospital to increase the overall focus on quality, aiming to establish the hospital as a "best in class" facility.
Would the parcel tax make the Hospital profitable?
While community support or critical services could be a very important part of our efforts to transition the hospital to a "best in class" facility, at this time the parcel tax alone would likely not be enough. Parcel tax revenues would be relatively small — estimated at 1% — and to be truly profitable we also need to control expenses and develop other new revenue streams. Coast Hospital also anticipates large expenditures for deferred repairs and building maintenance.
What is a parcel tax?
Parcel taxes are the most frequently used term for a range of possible "qualified special taxes" on local parcels which can be sought by healthcare districts and other public districts. Proceeds can be used for many purposes although they typically fund specific programs supported by the community. There is no legal limit on the tax rate that can be requested nor is there necessarily a limit on the term of the tax. However, a recent court ruling reaffirmed that the tax rate must be an equal on each parcel.
How much is the hospital considering asking for?
In addition to continuing to work on our own budget and continuing to improve profitability, the board is considering a $150-$250 per parcel tax — but your input will shape what request is made, if any.
Who can vote in the election?
All of the voters within the Coast Hospital District would be able to vote on a potential parcel tax but, before the board decides to call an election, we want to hear what everyone thinks so we will be reaching out to the community in a variety of ways. If support for the Hospital is strong the board will call an election. If not, the board won't.
ED NOTE: The Hospital’s argument that “We have added talent to our senior leadership team,” and hired a bunch of new, expensive specialists, is not exactly a great selling point for a $150-$250 per parcel tax. Nor is the claim that $150-$250 per parcel, which is a lot of money for many people on the coast, might only cover about 1% of the Hospital’s budget, too much of which goes to “our senior leadership team” and high-paid medicos. (PS. Why isn’t the Hospital Foundation, which takes in huge sums from the coast’s most well-off citizens each year specifically to cover high cost capital expenses, mentioned?)
Who writes this stuff?