Painful Truths At Coast Hospital

by Malcolm Macdonald, May 3, 2017

At an April 25th Finance Committee meeting, Mendocino Coast District Hospital (MCDH) Chief Financial Officer Wade Sturgeon and Chief Executive Officer Bob Edwards introduced a proposed budget for the 2017/2018 fiscal year that will be several hundred thousand dollars in the red, not much different than the monetary position the hospital is in at present. The proposed budget does include monies for an obstetrics (OB) department for the coming year.

Nevertheless, a standing room crowd in the relatively small Redwoods Room of the hospital's southwest wing showed up for the MCDH Board of Directors meeting on April 27th. A number of folks voiced their disapproval of any potential closure of the OB Department. Those speakers may have been reacting to news that came from an ill-noticed Special MCDH Board meeting on April 1, at which Board member Kevin Miller had asked that an up or down vote on OB be placed on the April 27 agenda. The topic was conspicuously absent from all written material at said late April meeting.

Chief Executive Officer (CEO) Edwards made a big to-do over the hospitals Laboratory Department earning a “Gold Seal” from the The Joint Commission that controls hospital accreditation. Edwards failed to point out to the public that a gold seal from The Joint Commission is earned merely for a passing mark it is not some examplary category akin to a grade of A on your mid-term exam. The MCDH lab merely met The Joint Commission requirements. There are two possible ratings which exceed expectations, but they did not achieve that status.

Edwards also praised the hospital's North Coast Family Health Center (NCFHC) for the number of patients seen in the prior month. What he failed to note is the statistic showing NCFHC showing slightly less patients over the course of the entire year than the year before. NCFHC is below budget for the year despite adding a pain clinic as well as an additional orthopedic surgeon.

In a similar vein Chief Financial Officer (CFO) Sturgeon told the Board of Directors, via a phone hookup, that the California Health Facilities Finance Authority (CHFFA) had just that day granted MCDH a $1.5 million loan. What he didn't say was that this loan is subject to the consent of Cal Mortgage Insurance which essentially already possesses a lien on the hospital's real estate and equipment as a result of MCDH's recent escape from bankruptcy proceedings. The collateral for this new loan in case of MCDH defaulting would mean that Cal Mortgage could intercept the property tax revenues paid by residents of the Mendocino Coast Hospital Distict. To put it more directly, if MCDH closed down, the taxpaying residents of the hospital district would be the ones ponying up until the sum(s) owed Cal Mortgage were completely paid off.

Here's a little surprise from the CHFFA documents associated with MCDH's attempts to secure another $2,000,000 in loans (which would be a first time exception if CHFFA grants the extra loan, $1.5 million being the previous max out total). Quoting from the “Uses of Loan Proceeds” section of the CHFFA document: “Loan proceeds will be used to finance the renovation of three separate projects mandated by Office of Statewide Health Planning and Development to meet facility compliance, the renovation of MCDH’s parking area to increase safety, and the purchase of equipment to upgrade MCDH’s current electronic health record system.”

At no time have CEO Edwards or CFO Sturgeon publicly mentioned the parking lot renovation, not in at the Finance Committee, not at a Board meeting. The approximate cost of the parking lot repairs: $500,000.

According to CHFFA documents MCDH's current total debt amounts to $16,636,705. Readers may want to circle back to the opening paragraph to re-absorb the fact that after losing hundreds of thousands of dollars this fiscal year, MCDH's CFO and CEO are offering up another year of hundreds of thousands in losses.

In addition to the ongoing monetary problems and the OB controversy the closed session of the April 27th MCDH Board meeting included items about a claim filed against the hospital by its most recent Human Resources (HR) Chief, Ellen Hardin, and a performance review of CFO Sturgeon. These matters are closely intertwined in that it is presumed that Ms. Hardin's claim stems from alleged workplace harassment complaints against Mr. Sturgeon.

At the end of a March 16 closed session performance review of the CFO, Board Chair Steve Lund stated that the Board would be conducting further interviews with MCDH staff before rendering any decision on the CFO's performance. Much of the performance review was predicated on investigation into harassment charges made against the CFO by Ms. Hardin. According to reliable sourcing a letter was sent to Ms. Hardin just two days after the March 16th closed session. The letter essentially asked her to sign off on an employment termination, with cause, because, according to the MCDH Board, her allegations were unfounded.

What anyone from the public has to wonder is if such a letter was sent to Ms. Hardin within a couple of days of the same Board promising to conduct further investigation into her allegations what sort of trust should the public place in the said Board if they tell the public one thing then follow up with a completely contradictory action.

At the public comment section of the April 27th meeting I posed further questions to the MCDH Board: Has the MCDH Board conducted any of the interviews it claimed it would at the end of the March 16 closed session? If so, when? (The almost certain answer is: No)

The April 1 MCDH Board meeting was not noticed to the public or press in a timely manner, at the beginning of that meeting the four MCDH Board members present (Dr. Peter Glusker did not attend) were apprised of the fact that said meeting was not properly noticed; however, the four MCDH Board of Directors went ahead with the meeting, violating the Brown Act. Are those four Board members ready to acknowledge their violation of the Brown Act under California Government Code 54956? (This is the same 4/5 of a board that censured Dr. Glusker for accidentally or purposely sending a “reply all” email that hinted at Ms. Hardin's allegations. Don't bet on them having the self awareness, let alone courage, to recognize their own Brown Act blunder.)

At the April 1 MCDH Board meeting Dr. Kevin Miller requested an up or down vote regarding closure of the obstetrics (OB) Department be placed on the agenda of the April 26 meeting of the MCDH Board of Directors. Why is that item absent from the April 27 agenda? (Most likely answer is that Board Chair Lund is capable of sniffing public sentiment in the wind. In other words, a vote now on closing the OB Dept. equals political suicide)

Is it true that at least one other employee, besides, Ms. Hardin, has filed workplace harassment charges against the CFO?

Is it true that harassment charges have been filed against MCDH's Chief Executive Officer (CEO) as well?

Is it true that an harassment charge has been filed against the MCDH Board Chair?

Is it true that an harassment charge has been filed against another MCDH Board member?

According to reasonable accounts, the answer to all those “Is it true” questions is yes. The allegations concerning the Board members relates to accusations of coercive behavior directed at employees below the administrative level.

What is the likelihood that this particular MCDH Board will answer any of these questions? It might not be when hell freezes over, but neither Eagles fans or taxpaying citizens of the coast hospital district should hold their breath. After that March 16th closed session this writer asked the same Board a series of questions. To the best of my knowledge the MCDH Board has not only failed to answer any of them, they have made no attempt to answer any of them.

Those earlier questions included: Is the MCDH Board of Directors aware that a significant number of hospital employees, from manager level on down, are on the side of the Human Resources Officer (Ms. Hardin) who filed a personnel claim? Many employees believe in her, and, though relatively silent in public, are hoping that they will not have to continue working with the current CFO.

Has the MCDH Board of Directors hired any outside investigative services concerning the CFO's performance or the personnel complaint that is ongoing? If so, at what cost to MCDH?

When the CFO was accused of workplace harassment, why was the alleged victim of the harassment placed on administrative leave instead of the accused CFO?

Does MCDH have a clear written policy regarding whether the accuser or accused in harassment cases is placed on leave? Is there a policy that allows for both to be placed on leave?

There are allegations that the CEO has in effect been an enabler of the CFO, essentially ignoring serious complaints directed at the CFO and participating in coercive actions, including behavior aimed at humiliating accusers. Has the Board fully investigated this aspect of the current administration at MCDH?

It has been reported that the CEO obtained the results of a BETA study regarding OB (obstetrics) risk assessment (in the case of MCDH closing the OB Dept.) as early as Feb. 21, 2017, yet failed to release those results to the OB Ad Hoc Committee Chair or any of its members for use at its final meeting. Has the MCDH Board investigated this matter? The wording of this question has been slightly altered (since March) to recognize that some aspects of a BETA report can or should remain confidential material. However, given the ongoing public controversy over a potential closure of the OB Department wouldn't it be prudent for the CEO to release Beta's basic findings regarding OB risk assessment?

It has been reported that the Hospital Foundation donated a significant amount of money in late 2015 for the purchase of infant warmers. The money, under the charge of the CFO, seems to be unaccounted for. Has the MCDH Board completely investigated this matter?

Have Compliance Officers been allowed to speak to the MCDH Board, in closed session, without the CEO or CFO present? Has the Chief Human Resources Officer been allowed to speak to the full board without the CEO or CFO present?

Was the chain of command altered when the current CEO took an extended sick leave? Prior to that time it seemed that the Patient Care Services Manager would have been in charge in such a situation; however, when the CEO did go out on sick leave the CFO was suddenly in charge. Was this chain of command altered by the CEO alone, by the Board of Directors, or by the board at the behest of the CEO? Is there a clear policy in place to cover such situations?

Is it true that fourth quarter (Oct. - Dec.) 2016 professional fees, from Medicare, were not paid to two North Coast Family Health Center (NCFHC) physicians in anything resembling a timely fashion? Reports indicate this was an ongoing problem as of mid-March, 2017. A problem not reported by the CFO to the Board or the Finance Committee of MCDH.

Is it true that last autumn NextGen [a provider of electronic health record sytems] refused to release the updated ICD-10 codes to this hospital, alleging that MCDH had not sent out its invoice to NextGen? At the Jan. 4, 2017 Finance Committee, the CFO stated that issues associated with the clinic's (NCFHC) billing had been fixed or would be fixed by the end of January. Yet the issue of professional fees cited above still existed as of mid-March, 2017.

Is it true that approximately 50 days worth of Rural Health Clinic (RHC) claims from NCFHC, dating from mid-November into Jan., 2017, had not been billed for as of mid-March, 2017?

Is it true that last summer the CFO informed third party payers with contractual agreements that MCDH prices would rise by an average of 5% on August 1, 2016, when he should have known that such increases would not be implemented? It is alleged that as a result of the CFO's letter to this effect Blue Shield reduced payments by 5% in response, as they are contractually allowed to do. Is this allegation true?

There are dozens and dozens of hard working, dedicated people working at MCDH everyday. It is the largest single employer in the city of Fort Bragg, with twice as many folks as the City itself employs. While some aspects of the score of questions mentioned above should remain confidential the overall lack of transparency, defensiveness, and manipulation of the truth by its CEO, CFO, and a majority of its Board of Directors is doing just as much to destroy this hospital as the ongoing budget deficits and long term debt in the millions. The employees and the district's taxpayers deserve far better.

2 Responses to Painful Truths At Coast Hospital

  1. mr. wendal Reply

    May 6, 2017 at 10:47 pm

    The news about the hospital becomes more and more disturbing yet it doesn’t seem to be much discussed throughout the district.

    When word circulates more widely about the state of affairs at MCDH there certainly won’t be any support for their ridiculous parcel tax idea. A major shake-up is all that will improve things. I wonder if or when that will happen. Throwing more of the our hard-earned money at it won’t do the trick. It’s frightening to think that the current people in charge may have a hand in planning the mandated retrofit or new building that has to happen in the not-too-distant future.

    Thanks to Mr. Macdonald and mendocinotv (their commentaries on this subject are a must-read and you can watch the meetings on their website) for bringing this all to light and to the people who attend the meetings for bringing good commonsense ideas to the board and committees. If the board members would listen to and learn from the employees who are in the trenches and the people giving input at the meetings we could have a thriving hospital with a healthy future in sight.

  2. joe wagner Reply

    May 7, 2017 at 6:30 pm

    hey but winesong yo!!!!!

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