OAKLAND -- A civil grand jury
blasted Alameda County's financially struggling public health system for
plunging deeper in debt and not warning its trustees or county supervisors of
the magnitude of the problem, made worse by taking over San Leandro Hospital.
Alameda Health System owed
Alameda County almost $200 million when the grand jury wrote its report. The
health system runs five hospitals, including its flagship Highland in Oakland,
and several clinics.
"The lack of leadership
and scrutiny on the part of the AHS board of trustees and the lack of oversight
by the county board of supervisors contributed to the financial problems at
AHS," the Alameda County civil grand jury wrote in its report released
this week.
Alameda County Supervisor Wilma
Chan, who chairs the board of supervisor's health committee, called the grand
jury's report "incomplete."
Alameda Health System
administrators are reviewing the report, a spokeswoman said. The health system
has its own autonomous authority but relies heavily on county funding.
"AHS has been working
collaboratively with Alameda County's board of supervisors since August of 2014
on a plan to restructure AHS debt to the county," said Jerri Applegate
Randrup, Alameda Health System representative. "AHS continues to work with
Alameda County toward a sustainable solution for the system's financial
needs."
Alameda Health System's debt to
the county ballooned from $118 million in 2010 mainly because of problems with
a new $77 million computerized records system. Acquiring financially troubled
Alameda and San Leandro hospitals added to the money woes, the grand jury
concluded, singling out the latter.
"It is clear that the San
Leandro Hospital acquisition contributed significantly to the financial
crisis," the report said.
Chan brokered the deal that
resulted in Alameda Health System taking over San Leandro Hospital from Sutter
Health in 2013.
"I don't think the
acquisitions were the main problem" causing the health system's money
woes, Chan said Tuesday. "The poor implementation of its computer system
was a major, major factor. They weren't able to bill for over a year."
Because of the billing
problems, the health care provider had to write off more than $10 million.
The head of Alameda County's
Health Care Services Agency agreed many of the problems were because of the
billing system and poor operations decisions.
"AHS's problems were not
caused by the acquisition of San Leandro Hospital," Alex Briscoe said.
Chan blamed Alameda Health
System's former CEO for many of the problems. Wright Lassiter III was the
health care system's top executive until 2014.
Lassiter did not appoint a
chief operating officer to oversee the computer system installation, and a high
turnover of top administrators also hampered the health system's operations,
Chan said.
"The previous CEO started
looking for a new job in 2012; he was rarely available to his board or our
board. It was very frustrating," the supervisor said.
In September 2013, the health
provider's management notified its finance committee it was not able to pay
vendors.
"There was an active
effort by Alameda Health System to manage this bad financial news.
Unfortunately, this effort appears successful until August 2014," the
report said. That's when hospital executives approached Alameda County about
restructuring its debt.
The grand jury report did not
consider the effects of the Affordable Care Act, which has meant less money
coming into the county's public hospitals, Chan said.
"I don't want to diminish
the grand jury's valid criticisms, but under health care reform, the hospital
has lost about $90 million in the last two years from the state and federal
government," she said.
Under the Affordable Care Act,
it was assumed everyone would have health insurance and the subsidies would no
longer be needed, she said. But Alameda County has about 40,000 residents,
mostly undocumented immigrants, who do not qualify for insurance under the
federal plan.
Alameda Health System's
acquiring San Leandro Hospital kept an emergency room open, and it also
provides space for an acute rehabilitation program, Chan said. The public
health system has to move its rehab center from San Leandro's Fairmont
Hospital, which does not meet seismic safety standards.
Many of the grand jury's
recommendations are already in place, the supervisor said. The health care
provider regularly updates the county on its finances, and cash requests and
cash flow projections are reviewed by the county.
"Things are starting to
improve," Chan said. "There is a strong administrative team in place.
The new chief operating officer started last August; that's made a big
difference. And we have a chief financial officer who has been there a
year," she said. "They have made big improvements in paying their
vendors."
A new CEO, Delvecchio Finley,
takes over in August.
Alameda
Health System also has been paying down its debt. It now owes $142 million,
county Auditor Steve Manning said Tuesday.
July 1, 2015
Contra
Costa Times
By Rebecca
Parr
No comments:
Post a Comment