MCDH Thursday September 29, 2016
New Bonds issued to tackle old problems, concerns expressed about new debt!
Financial issues continue to dominate the Mendocino Coast District Hospital (MCDH)/Mendocino Coast Healthcare District (MCHD) Board of Directors as it voted to increase the MCDH debt with a 4.15 million dollar uninsured revenue bond issue, which will not need voter approval nor include a process for public input.
While some capital expenses appear urgent, such as assuring surgery can be done safely in the operating room, and could severely impact MCDH’s ability to serve the public, it is unclear if the 2 million dollar upgrades on the Electronic Healthcare Records (EHR) is so urgent, other than the desire to include this expense in this revenue bond. The need for an automatic transfer switch, having safe surgical air flow, a sterile area in central services as well as an adequate record system for diagnostic imaging are indeed critical and have been deferred. While Medicare reimbursements will cover some of the EHR expenses, perhaps this project will include the Executive Support System module, which was revealed in July to show both the Board and staff have not had the software to extract the critical detailed financial information necessary to make sound fiscal decisions. The lack of this data was the source of frustration that appeared to be at the root of many board conflicts and the resignation of Dr. Rohr, although both Sean Hogan and Kitty Bruning also wanted it.
There is a sense of urgency on making the bond deal now to save attorney fees from the recent restructuring and the current low interest rates fueled by the fear that the interest rate may leap forward after the November elections and remarks from the Federal Reserve.
Malcolm MacDonald was the only citizen who gave public comment. He pointed out that few citizens, not connected to MCDH were in attendance and was angry about the lack of notice to the general public and that no system was in place to encourage it on such a critical financial resolution. He referenced a letter from Kaye Handley, a citizen member of the Finance Committee and a candidate for the 4 year MCDH/MCHD Board seat, who was angry that her concerns about this type of financing were not allowed to be expressed and listened to. Both Mr. MacDonald and Dr. Glusker want her letter to be reflected in the public record. If you watch the Mendocino TV MCDH Candidates Forum, you will see that building community engagement is critical to the successful survival of the hospital. It does not appear the current board is listening very closely to citizen concerns, which if it continues on a broad level could potentially be a fatal flaw when combined with the constant financial apprehensions.
Dr. Glusker expressed his continuing concerns that MCDH does not have the financial resources to repay this new debt and that the current budget is based on providing a level of services the hospital is not able to sustain. He is also worried about the fact that these bonds will be uninsured, although must be approved, by Cal Mortgage because of the cost and timeline to do so would stall the bond action. Various potential savings, as well as the threat of potential fines and reimbursement losses were thrown around which may improve the bottom line and repay this debt.
Other Board Members expressed reservations about jumping into new debt without a long term plan, most eloquently summarized by new member Steve Lund. Other members also expressed their reluctance although were concerned that this deferred maintenance could cost MCDH its’ license. The final vote was 4-1 to move forward with the projects, with Dr. Glusker casting the lone no vote.
A resolution was also passed which will result in a previous General Obligation Bond to be refinanced. This will result in a savings of $500,000 to taxpayers and will only proceed if it produces the expected outcomes. It passed on a 5-0 vote.
The financial situation and options at the hospital is very complex and does not have easy answers. It is incumbent on District Residents to understand and participate in funding decisions. It is incumbent on the Board and Staff to educate the public in lay terms and to create opportunities for honest participation.
Other enlightening elements of the meeting included:
- Bob Edwards’s contract has been extended for the next year by a vote of 4-1 and an incentive bonus system will be explored.
- MCDH has continued to annually license “25 beds in suspense” since the hospital received its Critical Access Hospital (CAH) status 10 years ago and only uses 25 of the original 50 beds. The Board Voted to give those 25 bed licenses up, which will be an annual cost reduction that was not available at the meeting. It will also save money as the new nurse call system is installed, because equipment must be purchased for all licensed beds.
- The Board voted to partner with Adventist Health to manage MCDH’s InPatient MediCal Managed Care Population. By re-assigning the 6,400 MCDH patients to Ukiah Valley Medical Center (UVMC), our hospital will be eligible for quality measure bonuses that potentially range from $550,000 to $650,000 per year. This means the two hospitals will need to coordinate care for these patients and may make some local services reimbursable now. It may require these patients to receive specialty services from UVMC, rather than from other out of district providers.
- MCDH is required to do a community health needs assessment soon, which will involve collaborating with other providers, community services organizations and the public. I think if this is done with a positive attitude and a sincere desire to communicate and collaborate honestly, it could help build a more trusting and respectful relationship with the community.
- Newly signed legislation allows for Critical Access Hospitals like MCDH to hire physicians as direct employees which will improve the hospital’s ability to recruit physicians. This will increase competition between MCDH and the other health providers. MCDH is currently interviewing physicians and has a new part time OB/GYN physician starting soon.
- The new Emergency Department (ED) has had glitches as it transitions to the new provider and several physicians have been asked not to return. Given my personal experience in August with one who was more interested in taking my chair and showing me his surgical scar than helping my critically ill friend, I think it is excellent that MCDH management can get rid of ineffective docs!
- The MCHD/MCDH Foundation had a very successful Winesong! event, which will help purchase equipment for the hospital.
- The MCDH 10th Annual Health Festival is October 15, with a walk at 10:30 AM and activities open from 11:00 AM-3:00 PM.
- The Finance Committee report indicates that while there is a small net profit for the first months of the new fiscal year, they less than the profit projected in the budget. Expenses, like revenue are also under budget, primarily because anticipated staff for North Coast Family Health Center (NCFHC) is not on board yet, so their visits are not meeting the budget goals.
- It does not appear that the motion made in July to bring the financial reporting software into this century has been acted or reported on, which means that decisions are still being made in the dark! Mendocino TV did use that meeting clip in its MCDH Candidates Forum which can be viewed on www.mendocinotv.com.
- Updates on staffing changes and facility updates in progress are available in the Board Packet available to the public upon request. Anyone can call the CEO’s office and request to have all this information emailed to you monthly.
This report is brought to you as a segment of Mendocino TV’s new show, Building Healthy Communities hosted by Marianne McGee, MA. We will explore a broad variety of topics and guests pertinent to building healthy communities, both on the Mendocino Coast and the world we live in today. Join us via our website or Facebook to keep up on the latest segments.