Coast Hospital CEO Fires The Messenger

On Monday, March 19th, Mendocino Coast District Hospital Chief Executive Officer (CEO) Bob Edwards gave interim Chief Financial Officer (CFO) John Parigi two week's notice. Parigi had only been on the job since December.

At this point in the debacle that is MCDH leadership no one should be surprised to find out that the power to remove a CFO at that institution rests not with the CEO, but the Board of Directors. Part of the bylaws of the MCDH Board reads as follows, “The Board of Directors reserves the sole right to terminate the CFO's employment contract.”

No one should be further taken aback to discover that the hospital's current Board of Directors stood idly by and let CEO Edwards do his thing. The one exception on the MCDH Board was Dr. Peter Glusker. Of course, when the subject of just who was in control of letting the CFO go came up at the March 29th Board meeting, the other Board members sat silent as gagged mice in a crumbling church facade.

Chief among them is Board President Steve Lund, a former school district superintendent, who is apparently afflicted by some sort of administrative co-dependency with Edwards. After all, they are co-defendants in a federal lawsuit that also includes the hospital itself.

Absent from that March 29th meeting was Dr. Lucas Campos. Dr. Campos was also absent from his board member duty as chair of the hospital's Finance Committee meeting on March 27th. He has missed many meetings in the last four months. Often his attendance has literally been phoned in. He is no longer seeing patients at the hospital or its affiliated clinic, North Coast Family Health Center (NCFHC). Until this year Dr. Campos was affiliated with Summit Pain Alliance, but recently his photo and any mention of him has vanished from that company's website. He now appears to have acquired a Nob Hill, San Francisco, address as well as the Fort Bragg address used to establish his residency for purposes of participating on the MCDH Board. A visit to that Fort Bragg residence on March 29th found no one at home and several UPS/FedEx type packages stacked on the doorstep.

Why is this important? If, as all indications point, Campos is no longer going to be part of Coast Hospital and the coastal community, he needs to be replaced. If Campos resigns before July, his spot on the Board of Directors can be placed on the ballot and voted upon by the Mendocino Healthcare District electorate in November. If he delays, and there are those who see his mysterious whereabouts as a deliberate delaying ploy, until after July 1st, then the Board can appoint his successor, thus depriving the voters of the choice. Keep in mind that three of the current MCDH Board seats are up to the voters' discretion in November. The Board, as it is currently made up, is packed with apologists for CEO Edwards.

The firing of Mr. Parigi, by CEO Edwards, appears to be no more than a means by which Edwards hopes to deflect attention from the fact that Parigi uncovered millions and millions of dollars worth of legitimate charges to patients that have, until Mr. Parigi's brief tenure, not been billed for, nor payments collected. In just three months Parigi's small team found over $3 million from previously languishing accounts. The fault for this lies not on any specific employees in the billing and finance departments, but on the fact that the hospital has been operating for years on a three-way jury-rigged electronic system. Thus, coding for a specific patient's charges and the subsequent billing had to go through multiple, yet different, types of computer systems. Therefore, the chances for misplacing or losing charges or the entire bill were exponentially exaggerated at all times.

It's not that Mr. Parigi was the first person to ever figure this out. Remember this from the AVA, over a year ago, on March 1, 2017? “It has come to this writer's attention that by sometime in November both [former] CFO [Wade] Sturgeon and (CEO) Bob Edwards were aware that it would take extra manpower to sift through the backlog of EmCare [Emergency Room providers] billing mess-ups, yet these sorts of positions were not created until January.” My knowledge stemmed from viewing an email sent from within the hospital's finance department to Edwards and then CFO Sturgeon. Expand the ER billing problems throughout the hospital and its clinic, throw in three electronic record systems that don't fully understand each other, and you get a boat load of cash never hauled in.

For at least a year and a half, and most likely much longer, Edwards has ignored potential, permanent fixes in favor of getting rid of hospital employees who dared question him or those who tried to expose what has been going on with the hospital's finances. Mr. Parigi is simply the latest and one of the most egregious examples.

At the March 29th Board meeting, during his CEO report, Edwards rattled off a series of potential correctives to the money-losing situation at MCDH. For those who attended a presentation by Mr. Parigi two days prior, it was obvious that Edwards' spiel on the 29th was derived (that's a polite way of saying “stolen”) from Mr. Parigi's data of March 27th.

At the Board meeting Edwards was called out, by yours truly, for taking Mr. Parigi's information and presenting it as his own. Edwards’ only response was to claim that Mr. Parigi's methods of calculation were not all that original. A member of the audience, Mara Thomas, then asked if that were true, then why hadn't Edwards implemented methods similar to Mr. Parigi's suggestions quite some time ago, thus saving the hospital even more millions.

Edwards was caught up in his own misleading lies on March 29. Two days earlier, Mr. Parigi laid out a straightforward, easy to understand set of data. That came late on an afternoon when only Dr. Glusker and two civilian members of the MCDH Finance Committee showed up at the facility's Redwoods Room for their monthly meeting. Without a quorum, acting committee chair Glusker could not hold an official meeting. However, Mr. Parigi's written financial narrative, along with the numbers and charts to back it up, had already been passed out to audience members as well as the three committee members.

When Dr. Glusker offered Mr. Parigi the chance to verbally annotate his financial narrative, CEO Edwards excused himself.

According to Mr. Parigi, the greatest needs for MCDH right now: Putting in place a coordinated EHR (electronic health records) system. That and at least five more staffers in the business office would help stop those coding and billing errors. Parigi estimated that implementing a new EHR system would pay for itself within a year, simply by tracking down the monies that MCDH is currently missing/losing from its own legitimate bills.

Mr. Parigi's most damning comment came at a different point in his March 27th presentation. “The hospital is lacking intellectual capital at its highest level.” A more direct hit on Edwards couldn't have been delivered by a body slam on the fifty yard line.

At the MCDH Board meeting on March 29, when asked by a community member about the longer term prognosis for the hospital, Parigi answered, “You're failing.”

Pressed about a possible turnaround, Parigi said, “Very difficult, if not impossible.”

Which leads us to the parcel tax measure on the June ballot, which would cost taxpayers $144 per year per parcel (with some exceptions for contiguously owned parcels). At this point it is unreasonable to ask the electorate of the Mendocino Healthcare District to give money to an institution that doesn't have its financial books in order, especially in light of this recent development in which the hospital's CEO fires the CFO who has actually found enough missed billing to equal two years worth of parcel tax money. Let's make that very clear: this hospital is asking for additional tax money from its citizenry when its CEO fires the man who was capable of bringing in twice that amount in a matter of months.

On top of the CEO's misdeeds, we have a majority on the hospital's Board of Directors who have abrogated their right to hire and fire CFOs to an untruthful, bullying, alleged workplace harasser of a CEO.

A prerequisite for any favorable consideration of a parcel tax can only occur after MCDH implements a new EHR system, hires enough additional staff to demonstrate that the hospital can capture a significantly higher percentage of its legitimate charges, AND replaces the current CEO with someone who will guarantee those initial steps to financial stability.

That's going to take a little bit of time. Perhaps the hospital can right its floundering vessel in time to attempt another parcel tax vote in November or early 2019, but as of this spring, with a majority of its Board of Directors living in some sort of ridiculous denial and a thoroughly unethical CEO, anyone voting for this parcel tax in June is making a foolish mistake.

One last note, at some point between March 19th and the Board of Directors meeting on March 29th, according to sources close to the situation, CEO Edwards was given a chance to reconsider and rescind his firing of Mr. Parigi. Edwards declined to do so.