An Albion area resident has paid a $2,900 deposit to the Mendocino County Clerk's Office to start a recount on Measure C, the $144 per parcel tax that would fund Mendocino Coast District Hospital (MCDH). County Clerk Susan Ranochak has estimated that the 6,879 ballots cast would be individually recounted at an approximate additional cost of $870 per six hour day. The individual paying for the tally can ask for the recount to be stopped at any point. Ms. Ranochak hopes that the count will be concluded by July 5th. For full disclosure: the person paying for the recount is a relative of this writer, though, up to and including the present, there has been absolutely no communication between us regarding this issue.
If MCDH receives voter approval for the parcel tax measure this would bring in somewhere between $1.5 million to $1.7 million per year. Unfortunately, the financial hole at MCDH is a bit deeper, to the tune of nearly $3.5 million in arrears for this fiscal year.
That parcel tax money would equal the salaries and wages paid to hospital staff for this past month. It has been written here before, but the statistical fact bears repetition. The parcel tax dollars equal just one month's salary and wages at MCDH. That doesn't include one month's worth of employee benefits: another three-quarters of a million dollars or physician's fees (approx. $562,000 for the most recent month). When you add it up, the entire parcel tax money would pay barely more than half of MCDH's salaries, benefits, and physician fees for just one month. That doesn't include registry costs (over $600,000 in May, 2018), supplies (about $770,000 in May), and $128,000 in other professional fees (usually meaning legal costs).
You might well ask, what's the escape plan? New Chief Financial Officer (CFO) Mike Ellis presented a potential narrative for improvements at the hospital's finance committee meeting on June 26th. According to Ellis, improvements in the revenue cycle are under way. That means some of the billable money that's been falling between the cracks is now being captured. However, MCDH must slow or halt negative spending trends in registry (over a million dollars more this year than last), professional fees for physicians (by the end of June, 2018, this amount will be well over a million dollars more than the previous fiscal year), and net losses in multiple millions from the hospital's clinic (North Coast Family Health Center [NCFHC]).
When Ellis went through the basic numbers for NCFHC, Chief Executive Officer (CEO) Bob Edwards didn't bat an eye, a complete turnaround from a couple years back when Drs. Glusker and Rohr, the MCDH Board representatives on the finance committee, tried to dig down into the finances of individual departments within the hospital. At that time, Edwards nearly burst his buttons to halt such a monetary inspection.
What is usually a negligible factor in a hospital's finances is the amount of bad debt it incurs. At the end of the last fiscal year (June 30, 2017) that total at MCDH was a little over $220,000. This year's bad debt will total out at $1,660,000. That's a number that Mr. Ellis projects as correctable in the coming year. It is a number of interest in another way. In March, when interim CFO John Parigi gave his parting financial report, CEO Edwards essentially scoffed at the idea that the bad debt column would continue to grow. Mr. Ellis's year end estimates bear out Parigi's prediction to the tune of $400,000 more dollars in bad debt. That $1.66 million in bad debt is almost an exact match for the parcel tax money.
Another area that may help bring in more cash is a proposal to take billing matters away from EmCare, the emergency room provider, and return it to the hospital's billers. The inability of EmCare to code, charge, or bill fully and accurately became clear within the MCDH Finance Dept. and clear to CEO Edwards within a month or two of EmCare taking over the Emergency Department in August, 2016. However, Mr. Edwards has seemingly been unable to come to grips with that fact enough to act upon it until June of 2018.
CFO Ellis is hoping that the following can be achieved in the coming fiscal year in order to offset the $3.5 million hole the hospital is stuck in: a $1.2 million improvement in the aforementioned revenue cycle, a $400,000 uptick in net patient volumes, cutting registry costs by a million bucks, and a $360,000 drop in employee benefits. The latter number would have to be negotiated with the hospital employees' union, which leads to a decades-old Catch-22. The hospital's salaries have been substantially lower than what employees could earn elsewhere, but they have been offset somewhat by a worker friendly set of benefits (perhaps 20% higher than the state average). Therefore, when MCDH management goes to the union looking for a reduction in the benefit package the union is going to counter by saying we already did that last time, any further benefit reductions are going to have to be countered by salary increases. Time will tell on that issue as they will on drastically reducing registry costs. To do that requires more permanent local employees. Of course, it is hard to draw permanent employees if you are going to ask them to accept a cut in benefits and still labor at wages that are substantially lower than are available elsewhere.
Ellis's proposed budget for next year includes a similar amount for maintenance as the current year. There's about $10 million in state mandated repair projects on the horizon. The less than one million dollars budgeted apparently means MCDH is going to muddle along under the precept that something doesn't have to be fixed until it is dead and buried. Perhaps the maintenance budget number is a harbinger of reality-yet-to-come. In its current state MCDH can't afford to fix more than a million dollars worth of equipment and infrastructure, let alone $10 million worth.
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