Scalpel’s Out: Coast Hospital Foundation Finances Dip

The Mendocino Coast Healthcare Foundation says they are “Facing Financial Challenges.”

Here’s their press release:

The Mendocino Coast Healthcare Foundation (MCHFoundation) has a history of over 40 years serving the Mendocino Coast community by raising funds to meet local healthcare needs. Most recently, that has involved offering scholarships to young people who are pursuing careers in nursing and other health professions. During our long history, we have worked hard to be transparent with the community we serve.

MCHFoundation came out of the pandemic in relatively good shape financially, which was a win since many of our fundraisers had to be canceled or held virtually. In 2023, we were excited to return to inperson events and held a four-day Winesong fundraiser to celebrate. 

Unfortunately, we experienced significant, unexpected cost overruns along with lower-than-predicted pledges. We also have experienced delays in being reimbursed for a large grant, and this significant funding has yet to be received. These factors, along with other unexpected expenses associated with the needed renovation of our office building has put our organization in a cash flow deficit. As a result, the MCHF Board of Directors has decided to reduce our staff. This saddens us greatly, as our staff have done a wonderful job and we are taking this opportunity to publicly thank each of them for their service.

We remain commited to this community and to fundraising to fill local healthcare needs. We plan to maintain and continue the scholarship program which has been very successful and has awarded dozens of scholarships to local students since it began four years ago. We remain commi[ed to honoring the scholarships awarded to date. We also plan to continue to hold many of our regular fundraisers. We will continue to keep you, our community and our donors, informed as to our progress. We intend to learn from this situation and grow from the experience. We are working hard to maintain your continued trust and support.

Terry Ramos, President, terry@mchfoundation.org

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The Mendocino Coast Healthcare Foundation (MCHF) has issued a press release. For our purposes we can dispense with most of the sugarcoated 40-year history fluff to the middle of the second paragraph, which states, “Unfortunately, we experienced significant, unexpected cost overruns along with lower-than-predicted pledges. We also have experienced delays in being reimbursed for a large grant, and this significant funding has yet to be received. These factors, along with other unexpected expenses associated with the needed renovation of our office building has put our organization in a cash flow deficit. As a result, the MCHF Board of Directors has decided to reduce our staff.”

A clearer perspective might be obtained from the social media post of one of MCHF's staffers. “Mendocino Coast Healthcare Foundation laid off all employees yesterday without notice, couldn't even fulfill the current payroll period, and left us with nothing except pay to yesterday. Even that was a snafu to get the checks done and I still don't have mine. If you donate money to them you should think twice. It's disgraceful and the board should be ashamed that they didn't do their due diligence in overseeing the Executive Director and her shams.”

In reaction to the post, another MCHF staff member stated, “I don't have mine either. This whole fiasco is such a SHAME.”

A few hours later, in reaction to reading the press release, the original social media poster wrote, “Smoke and mirrors! Excuses for what was REALLY bad leadership for years and lack of oversight from the Board, overspending and paying very expensive contractors and consultants. Let's be clear, 'reduce our staff' was really laying off everyone mid-pay period with no notice and only paid to that day. Couldn't even finish out the week's pay and no severance. Do not support this – it's misleading.”

It is slightly unclear if the last part is referring to the press release, the Foundation itself, or both.

Speculation as to whether the layoffs included MCHF's executive director was answered in a text from said executive director, “I'm finishing a transition plan then I'm out.”

The press release from MCHF referenced “delays in being reimbursed for a large grant.” In a text follow up, the executive director, stated “…our USDA grant award didn't come through. A big hit as its work we already paid for in staffing and supplies etc.”

Late in the afternoon of January 30 I questioned the new MCHF board president (as of January 1) about the amount of money that was late in coming from USDA. The answer: $199,000.

Just less than $200,000 is a nice chunk of change for most citizens; however, for a fundraising organization that has been seen as something like a potential savior for anything from procuring new ambulances to helping in some sort of rebuild at the hospital itself, it may seem alarming that the lack of $200,000 more or less shut this organization down.

These financial woes for the Coast Healthcare Foundation come at a time when the Mendocino Coast Health Care District (MCHCD) is at a financial crossroads itself. Let's back up and remind ourselves that the healthcare district is what the taxpaying citizens of the coast support with our tax dollars. Our healthcare district owns the land the hospital rests upon, but, since July 2020, the hospital itself is run by Adventist Health. Day to day healthcare decisions are made by Adventist Health employees. 

The healthcare district (MCHCD) faces some crucial decisions. The state legislature, in their wisdom, after the 1992 earthquake in southern California, created safety regulations that will make it mandatory for hospitals to meet certain seismic standards by the year 2030 or face potential closure. Almost all of the more than fifty year old coast hospital fails to meet those 2030 seismic standards. Hence, the current troika that rules the five member Mendocino Coast Health Care District (MCHCD) Board of Directors has been hell bent for leather in a race to put forward a bond to raise $20 million to retrofit the coast hospital to meet those seismic standards.

Ready for a twist in the story? In November I asked an Adventist Health official familiar with their statewide plans what AH was going to do with their hospitals that do not meet the 2030 seismic standards (They possess some that already do meet the standards.)? The response was that AH will not be retrofitting those hospitals. It would cost Adventist Health somewhere between $700 million to a billion dollars to do so. The official pointed out that other hospitals and hospital systems, like Sutter or Dignity Health, would be faced with similar or even larger costs. A study that is now four to five years old estimated the total cost of seismically retrofitting all of California hospitals at anywhere between tens of billions of dollars up to $150 billion dollars.

The strategy, instead, is for the hospital systems to lobby the state legislature to push back the 2030 regulations, change or eliminate them for single story (generally safer in an earthquake) or rural hospitals, or more or less eliminate the regulations. The coast hospital is both a rural and single story hospital.

The news that Adventist Health did not plan to retrofit the hospitals it owns was pretty much shocking news to the trio that rules the MCHCD Board. They were gung ho for a $20 million bond issue to be on the ballot in November 2024. They paid several thousands for a research company, EMC, to conduct a survey of potential voters, about the possibility of passing a bond issue to raise the twenty million.

Meanwhile, the Mendocino Coast Health Care District, which is responsible for the potential seismic retrofit (not Adventist Health who leases the use of the hospital) currently has about $10 million total in its bank accounts. The district also has approximately $3.8 million in long term debt to repay, around $2.875 million of that is a consequence of refinancing 2016 bonds.

One idea floating around is to go the route of ignoring the seismic retrofit, like the other hospitals, and, instead, float a bond for at least twice the $20 million in order to construct a new operating theater (OR) and an urgent care facility. The new operating room would please Adventist Health because it could accommodate multiple orthopedic surgeries in a given day. Orthopedics is a consistent major money maker for hospitals. An urgent care should be more pleasing to the public than the current AH “immediate care” which actually requires an appointment to be seen. Urgent care would also be far less expensive to the average patient than going to the Emergency Room (ER).

Quite the conundrum, a healthcare foundation that can't afford its own staff, a healthcare district that possesses only $10 million, a ruling troika on that district's board trying to rush to a November bond vote in an attempt to raise $20 million from taxpayers for a retrofit that may or may not be required in 2030, a district board uncertain of anything beyond that, only slightly vague wishes for a forty or fifty million dollar plan that might build a new OR and urgent care.

And, ready for your final twist of the scalpel? Adventist Health has given no indication that it will be chipping in at all for the retrofit, for new buildings, for anything of a substantial nature beyond the day to day costs of running the hospital.

Did you stay through the credits to make sure there were no more surprises? Remember the article on the question of the “ends justifying the means” in regard to the healthcare district spending months hammering out a job description for an executive director last year, only to have newcomer, board appointee, Paul Garza, seek out Regional Government Services (RGS) to provide more or less the same service as an executive director for the price of $111,000 for six and a half months when the executive director position would have cost the district's taxpayers $65,000 over the same time frame?

I know that was a long question! We're getting to the punch line though. The person who originally applied for the executive director post in late September 2023 then magically turned into the more costly “agency administrator” under RGS is Kathy Wylie. Want to guess who was overseeing Mendocino Coast Healthcare Foundation's (MCHF) finances in 2023 as their board treasurer? If you didn't answer Kathy Wylie I know someone who has some swamp land to sell you.