1. No updated financial reports so no way to tell if Management missed budget again in August. These will be available for next week's Financial Committee meeting. I am sure that they will be carefully prepared because, even though the original date was for today (that was before the scheduling of the Special Board Meeting), Management, this morning, did not want to recklessly offer an opinion about August results. Management (Stebbins) is very careful about controlling the flow of information.
2. The major initiative outside of the current budget is the expanded long term care services. The anticipated date of public disclosure is October 10, 2011. (Actually disclosure will occur when meeting materials are posted.)
3. Alex Briscoe and Debi Stebbins, I am guessing, are exchanging information (whether face-to-face, via email, or phone I am not privy to) regarding the use of funds from the County's uncompensated care moneys. Even with the backing of Wilma Chan, I am a little bit surprised that this is such an easy deal given the needs of St. Rose, and ACMC (and its ancillary operations). The magnitude is unclear. Stebbins will likely be updating progress on this front in future CEO reports at Board meetings.
4. The conversion of acute care beds to sub-acute I assume is ongoing, but we do not have firm dates yet as to if, or when, this might have an impact on the financials. My guess is that, at this point, there is little material impact that will be possible in 2011/12 given the actual logistics and licensing hurdles that need to be addressed.
5. Changes in the wound care center (which is an on-budget item) project will have a negative or neutral impact on meeting the budget. From what I understand, opening is delayed and costs are anticipated to be higher. This year's impact of the wound care program was small regardless.
6. Additional IGT funds may become available. I find this hard to believe and a diligent Google search does not reveal to me, the news that there might be an additional 700k available to Alameda for the current fiscal year. Of course, the news would be that IGT funds were doubled rather than a specific reference to the District. I just cannot find anything. Maybe someone can provide me with a link or I will ask Management at the next meeting we are at together for pointers to this information.
With all these irons in the fire along with the slim, in my opinion, chance that Management execute against the originally approved budget, the District could still meet it's 2011/2012 income goal. Hopefully, management has enough time and energy to stay on top of all of these projects. I am not encouraged in that hope by today's lack of financial results.
Wednesday, September 28, 2011
Saturday, September 24, 2011
Odds and Ends
1. There is a special meeting at 7:30 next Wednesday morning to discuss "long-term care expansion". It would be unprecedented, but I encourage anyone who cares to show up and speak at 7:30am either for or against this expansion before the Board goes into closed session.
2. Again, I am limited what I can say by certain dishonest people but I think I am safe in saying that the information given for next Wednesday's meeting does not meet the criteria I laid out previously.
3. The one year mark for my election to the Board is fast approaching (although I did not begin serving until a month afterwards). It was that last meeting before I took office that the former Board (which included a Board majority of the current Board - Deutsch, McCormick, and Battani) gave CEO Stebbins a >$500,000 gift of 18 months severance. That Board also approved spending about a million dollars on a seismic retrofit project that will likely never happen.
4. One thing that surprises people about the District is that the parcel tax is in perpetuity. Another thing is that Board members serve without compensation (even Dr. Deutsch who does a great deal of business in and with the Hospital but that is, theoretically, unrelated to his Board membership).
5. I can extend an offer to anyone the opportunity to comment anonymously, to the community, but not to me. If you want me to repost a comment without any identifying information then send it to my email and I will post it verbatim (or send you a reply explaining why not). [Sorry to be cryptic, but to avoid spam - "my last name" then a period "the @ sign spelled out" then a period "alamedahospital" then the at sign "gmail.com"]
6. I will be requesting of Management that the reports for August financials be available before next Wednesday's special meeting so that the adherence (or lack of adherence) to the 2011/12 budget can be evaluated as part of the process of assessing the credibility of the plans that will be presented in closed session.
UPDATED: 7. One last thing. I do not collect information about visitors to this blog. Mainly because I am cheap and the free tools available for that sort of thing are not that good, but also because I am not totally comfortable with the idea. My "hello management" comment in a post below was based on the idea that the "perception" that Stebbins was referencing would most likely have originated from this site and not on any examination of a list of IP addresses.
2. Again, I am limited what I can say by certain dishonest people but I think I am safe in saying that the information given for next Wednesday's meeting does not meet the criteria I laid out previously.
3. The one year mark for my election to the Board is fast approaching (although I did not begin serving until a month afterwards). It was that last meeting before I took office that the former Board (which included a Board majority of the current Board - Deutsch, McCormick, and Battani) gave CEO Stebbins a >$500,000 gift of 18 months severance. That Board also approved spending about a million dollars on a seismic retrofit project that will likely never happen.
4. One thing that surprises people about the District is that the parcel tax is in perpetuity. Another thing is that Board members serve without compensation (even Dr. Deutsch who does a great deal of business in and with the Hospital but that is, theoretically, unrelated to his Board membership).
5. I can extend an offer to anyone the opportunity to comment anonymously, to the community, but not to me. If you want me to repost a comment without any identifying information then send it to my email and I will post it verbatim (or send you a reply explaining why not). [Sorry to be cryptic, but to avoid spam - "my last name" then a period "the @ sign spelled out" then a period "alamedahospital" then the at sign "gmail.com"]
6. I will be requesting of Management that the reports for August financials be available before next Wednesday's special meeting so that the adherence (or lack of adherence) to the 2011/12 budget can be evaluated as part of the process of assessing the credibility of the plans that will be presented in closed session.
UPDATED: 7. One last thing. I do not collect information about visitors to this blog. Mainly because I am cheap and the free tools available for that sort of thing are not that good, but also because I am not totally comfortable with the idea. My "hello management" comment in a post below was based on the idea that the "perception" that Stebbins was referencing would most likely have originated from this site and not on any examination of a list of IP addresses.
Thursday, September 22, 2011
Notes for Board Meeting 9/12
[Sorry, I'm not going to respond to Lauren Do; I assume she knows the definition of statistical significance, but chose to ignore it. I want to get these meeting notes out there and I will leave Lauren to her "fair and balanced" approach to Alameda news. Obviously, she is a talented and prolific writer who has created a vibrant online community, but her self-appointed role as enforcer for a political clique she denies even exists is tiresome.]
1. Not much to say about closed session. The process of CEO performance evaluation has begun.
2. Consent agenda was approved with the items below being pulled for individual discussion.
a. The regular meeting notes were amended by me slightly. In the previous month's discussion on the use of electronic devices (still wondering how that resolution got on the agenda and whether Mr. Driscoll drafted it for free), Director Battani had made an assertion that materials that I wanted to read into the record were unavailable to the Board. This was reflected in the meeting notes. I just wanted to have the record corrected to point out that I had not distributed that material but that it had been part of the materials delivered to each Board member. Director Battani should have known since she puts the Board agenda together as President (more on that below). Too many words to explain a trivial correction.
b. ALPHA Fund Resolution is a self-insurance pool for workman's compensation. This was the lowest price way to obtain workman's comp insurance although it requires membership in the Association of California Health Care District at a cost of $28,000. This amount was not included in the analysis that management included with the packet. It still was the lowest cost alternative and it means I will continue to get junk mail from the ACHD as one of the perks of being a District Trusteee.
c. July, 2011 unaudited financial statements. I tried to find out whether there was any additional measures management hoped to take to avoid continuing losses. The short answer was "no". The longer answer was that there might be some additional places staffing could tighten up. Also, there is the unending hope for additional revenues.
d. Approval of physician recruitment. I abstained and thinking about it further wish I would have voted no. This is a grant of up to 125,000 dollars to Alameda Family Physicians to pay for a new doctor in their office. It is unclear to me how giving a large amount of money to fairly wealthy people to improve access for people who already have insurance is a good idea. There is an access problem in Alameda, but it is not that dire for the insured. An urgent care center would be much more beneficial than this use of funds, but Stebbins has denied that possibility because she fears it would cannibalize ERcustomers patients. In other words she would rather route urgent care complaints through the ER where they are more remunerative to the Hospital even though that is more inefficient (and likely less profitable in the long run).
3. The Board meeting for 10/3 was cancelled. It is likely to be rescheduled for 10/10. This Board meeting is intended to be the presentation of an expansion of SNF since the date listed for disclosure is 10/1. I hope that Director Battani and Management give people sufficient time to evaluate the information that will be presented in support of the proposal. Three days (or even five days) over a weekend is not going to cut it especially for the people, like me, who will assume, based on previous representations on other projects, that the numbers are less than completely trustworthy.
4. District referrals policy was approved with one change which was denial of placement on the agenda would need to be at least four days in advance of the meeting so that the "2 person rule" could be invoked if necessary. That is the rule that allows any 2 Board members to place an item on the agenda even if the Board President disapproves. The discussion was confusing to me since it is the Board President and Management who, in my opinion, have been most likely to spring surprises on fellow Board members (such as the Physician Recruitment Agreement, this self-same resolution itself, or more annoyingly the electronic device resolution Battani unilaterally placed on the agenda last month). Also, Battani claims that she has never denied a request which I believer is literally true, but she has certainly deflected and discouraged me from making requests. Since I believe since my election, I am the only one who has made any type of request, I have to assume that this resolution only impacts me.
5. Do not recall if there was any President's Report.
6. CEO Report.
a. Stroke survey is this Friday, September 23. Routing of stroke victims already resumed to Alameda Hospital.
b. Possibility of receiving funding from Alameda County Uncompensated Care Program. Director Chen asked what changed between now and previous times when the County has told the Hospital to pound sand when seeking these funds. The answer for me, is that now big Hospital booster, Wilma Chan is on the Board of Supervisors. My guess, although I haven't confirmed it, is that Chan sits on the Health Subcommittee that will approve any request from Alameda Hospital. (She also sat on the State Subcommittee that approved the IGT funds in 2009/2010 - the surprise funds or "bluebird" that made the District cash flow positive that year.) Not really a mystery why things changed; somebody please correct me if I am wrong.
c. IGT Update. Stebbins claims that the pot will be bigger this year representing an opportunity for 700k more than budgeted from IGT funds. Sounds like "happy talk" to me. I'll believe it when I see it.
d. Every month Stebbins will be highlighting a quality metric. Hardly expect any actual discussion about these. See previous posts regarding this type of information where the Board and Management choose to be willfully ignorant or just go on over to Lauren Do's blog for distorted analysis (or what passes for analysis).
e. August volumes were up. Case mix index was down. Stebbins emphasized one and glossed over the other. Dishonest or not? You decide. My prediction is that the District failed to meet budget in August unless the additional (unbudgeted?) parcel tax revenues (I think I heard about 200k) are booked as revenue for this month rather than last year.
f. Alameda Hospital is offering tickets to the gala on October 1 for $175 per person. I cannot afford that; have better places to make my charitable contributions, and would hardly be welcome.
7. The Marina Village Wound Care Program is going to take longer than previously projected to get started and cost more than originally estimated. This is the kind of thing that makes me doubt Management. That kind of shading/spin/mirepresentation/consistent misforecasting usually flows straight from the top - in other words, Stebbins.
8. Audit will be complete in October, I believe. The results will not vary much it is assumed from the unaudited results with the possible exception of the 200k additional in parcel taxes. I'm not entirely clear on that point.
1. Not much to say about closed session. The process of CEO performance evaluation has begun.
2. Consent agenda was approved with the items below being pulled for individual discussion.
a. The regular meeting notes were amended by me slightly. In the previous month's discussion on the use of electronic devices (still wondering how that resolution got on the agenda and whether Mr. Driscoll drafted it for free), Director Battani had made an assertion that materials that I wanted to read into the record were unavailable to the Board. This was reflected in the meeting notes. I just wanted to have the record corrected to point out that I had not distributed that material but that it had been part of the materials delivered to each Board member. Director Battani should have known since she puts the Board agenda together as President (more on that below). Too many words to explain a trivial correction.
b. ALPHA Fund Resolution is a self-insurance pool for workman's compensation. This was the lowest price way to obtain workman's comp insurance although it requires membership in the Association of California Health Care District at a cost of $28,000. This amount was not included in the analysis that management included with the packet. It still was the lowest cost alternative and it means I will continue to get junk mail from the ACHD as one of the perks of being a District Trusteee.
c. July, 2011 unaudited financial statements. I tried to find out whether there was any additional measures management hoped to take to avoid continuing losses. The short answer was "no". The longer answer was that there might be some additional places staffing could tighten up. Also, there is the unending hope for additional revenues.
d. Approval of physician recruitment. I abstained and thinking about it further wish I would have voted no. This is a grant of up to 125,000 dollars to Alameda Family Physicians to pay for a new doctor in their office. It is unclear to me how giving a large amount of money to fairly wealthy people to improve access for people who already have insurance is a good idea. There is an access problem in Alameda, but it is not that dire for the insured. An urgent care center would be much more beneficial than this use of funds, but Stebbins has denied that possibility because she fears it would cannibalize ER
3. The Board meeting for 10/3 was cancelled. It is likely to be rescheduled for 10/10. This Board meeting is intended to be the presentation of an expansion of SNF since the date listed for disclosure is 10/1. I hope that Director Battani and Management give people sufficient time to evaluate the information that will be presented in support of the proposal. Three days (or even five days) over a weekend is not going to cut it especially for the people, like me, who will assume, based on previous representations on other projects, that the numbers are less than completely trustworthy.
4. District referrals policy was approved with one change which was denial of placement on the agenda would need to be at least four days in advance of the meeting so that the "2 person rule" could be invoked if necessary. That is the rule that allows any 2 Board members to place an item on the agenda even if the Board President disapproves. The discussion was confusing to me since it is the Board President and Management who, in my opinion, have been most likely to spring surprises on fellow Board members (such as the Physician Recruitment Agreement, this self-same resolution itself, or more annoyingly the electronic device resolution Battani unilaterally placed on the agenda last month). Also, Battani claims that she has never denied a request which I believer is literally true, but she has certainly deflected and discouraged me from making requests. Since I believe since my election, I am the only one who has made any type of request, I have to assume that this resolution only impacts me.
5. Do not recall if there was any President's Report.
6. CEO Report.
a. Stroke survey is this Friday, September 23. Routing of stroke victims already resumed to Alameda Hospital.
b. Possibility of receiving funding from Alameda County Uncompensated Care Program. Director Chen asked what changed between now and previous times when the County has told the Hospital to pound sand when seeking these funds. The answer for me, is that now big Hospital booster, Wilma Chan is on the Board of Supervisors. My guess, although I haven't confirmed it, is that Chan sits on the Health Subcommittee that will approve any request from Alameda Hospital. (She also sat on the State Subcommittee that approved the IGT funds in 2009/2010 - the surprise funds or "bluebird" that made the District cash flow positive that year.) Not really a mystery why things changed; somebody please correct me if I am wrong.
c. IGT Update. Stebbins claims that the pot will be bigger this year representing an opportunity for 700k more than budgeted from IGT funds. Sounds like "happy talk" to me. I'll believe it when I see it.
d. Every month Stebbins will be highlighting a quality metric. Hardly expect any actual discussion about these. See previous posts regarding this type of information where the Board and Management choose to be willfully ignorant or just go on over to Lauren Do's blog for distorted analysis (or what passes for analysis).
e. August volumes were up. Case mix index was down. Stebbins emphasized one and glossed over the other. Dishonest or not? You decide. My prediction is that the District failed to meet budget in August unless the additional (unbudgeted?) parcel tax revenues (I think I heard about 200k) are booked as revenue for this month rather than last year.
f. Alameda Hospital is offering tickets to the gala on October 1 for $175 per person. I cannot afford that; have better places to make my charitable contributions, and would hardly be welcome.
7. The Marina Village Wound Care Program is going to take longer than previously projected to get started and cost more than originally estimated. This is the kind of thing that makes me doubt Management. That kind of shading/spin/mirepresentation/consistent misforecasting usually flows straight from the top - in other words, Stebbins.
8. Audit will be complete in October, I believe. The results will not vary much it is assumed from the unaudited results with the possible exception of the 200k additional in parcel taxes. I'm not entirely clear on that point.
Sunday, September 18, 2011
Whatever you call it, is it really the whole truth?
Back in January, there was a discussion of stroke certification at Alameda Hospital. CEO Stebbins was happy that the risk adjusted mortality rate for the Hospital for 2009 was not identified by the State as being statistically worse than the state average. I was disgusted with the whole discussion and the comfort level the people in the room had with outright ignorance, especially the medical people. For the record, Stebbins contended that these numbers showed Alameda Hospital doing a good job even though the statewide average for mortality was 10.4% and Alameda Hospital's was 12.6.
I made a statement about the statistics and was roundly ignored or even outright criticized for trying to apply analysis to these numbers. Now that Alameda Hospital is authorized by the County EMS to receive stroke victims again, I want to revisit those numbers. Here is a simple chart of the 2009 (most recent) numbers for the hospitals that County EMS will allow stroke victims to be brought to if within 4 hours of onset of symptoms:
7 of thes hospitals are in Alameda County and 3 are outside but listed in the County EMS manual. If something doesn't pop right out at you when looking at those numbers then I have to conclude that you are innumerate. Only one hosptial in that list has a double digit risk adjusted mortality. Only one hospital has a rate that is below the statewide average ["below" means inferior in this sentence] . But we, in Alameda, really do not care specifically about the statewide average, we care (or should unless you are trying to spin the numbers) about the alternatives where we may actually receive treatment. The average for these 9 hospitals (excluding Alameda Hopital) is 8.1%.
Now I can take this one step further and will, but didn't earlier because I did not think it would convince anyone and because I am not a statistical expert ("a little knowledge is a dangerous thing") even though I am fairly confident that I know more statistics than the rest of the Board and Management ("in the land of the blind, the one-eyed man is king"). I used an online calculator like this one. Given my hypothesis that Alameda Hospital is worse than average, I was comfortable using a one-sided test in which the difference is statistically significant p=0.04 (less than 5% chance that the difference is due to random variaton). A more conservative approach where the hypothesis is simply that the two proportions are not equal uses a two sided test where the difference, in this case, is not statistically significant p=0.14 (less than a total of 5% chance that the difference is due to random variation but split between both sides of the distribution - 2.5% chance on each side). Of course if you are a Bayesian and your prior is that Alameda Hospital is likely inferior in outcomes , then you don't even have to resort to a test since the number for Alameda is the worst of the lot.
So you can decide whether I was doing a little spin of my own. I think whatever you decide about my statements, you can readily conclude that Stebbins's contention that these numbers showed that these quality metrics are no cause for concern is a significant overstatement.
I made a statement about the statistics and was roundly ignored or even outright criticized for trying to apply analysis to these numbers. Now that Alameda Hospital is authorized by the County EMS to receive stroke victims again, I want to revisit those numbers. Here is a simple chart of the 2009 (most recent) numbers for the hospitals that County EMS will allow stroke victims to be brought to if within 4 hours of onset of symptoms:
| Hospital | % Mortality |
| Alameda Hospital | 12.6 |
| Alta Bates Summit Medical Center – Alta Bates Campus | 8.2 |
| Alta Bates Summit Medical Center – Summit Campus – Hawthorne | 7.8 |
| Eden Medical Center | 9.5 |
| Kaiser Foundation Hospital – Hayward | 7.3 |
| Kaiser Foundation Hospital – Oakland Campus | 7.1 |
| Washington Hospital – Fremont | 7.5 |
| Stanford | 7.7 |
| San Jose Regional Med. Ctr | 8.3 |
| John Muir | 9.2 |
7 of thes hospitals are in Alameda County and 3 are outside but listed in the County EMS manual. If something doesn't pop right out at you when looking at those numbers then I have to conclude that you are innumerate. Only one hosptial in that list has a double digit risk adjusted mortality. Only one hospital has a rate that is below the statewide average ["below" means inferior in this sentence] . But we, in Alameda, really do not care specifically about the statewide average, we care (or should unless you are trying to spin the numbers) about the alternatives where we may actually receive treatment. The average for these 9 hospitals (excluding Alameda Hopital) is 8.1%.
Now I can take this one step further and will, but didn't earlier because I did not think it would convince anyone and because I am not a statistical expert ("a little knowledge is a dangerous thing") even though I am fairly confident that I know more statistics than the rest of the Board and Management ("in the land of the blind, the one-eyed man is king"). I used an online calculator like this one. Given my hypothesis that Alameda Hospital is worse than average, I was comfortable using a one-sided test in which the difference is statistically significant p=0.04 (less than 5% chance that the difference is due to random variaton). A more conservative approach where the hypothesis is simply that the two proportions are not equal uses a two sided test where the difference, in this case, is not statistically significant p=0.14 (less than a total of 5% chance that the difference is due to random variation but split between both sides of the distribution - 2.5% chance on each side). Of course if you are a Bayesian and your prior is that Alameda Hospital is likely inferior in outcomes , then you don't even have to resort to a test since the number for Alameda is the worst of the lot.
So you can decide whether I was doing a little spin of my own. I think whatever you decide about my statements, you can readily conclude that Stebbins's contention that these numbers showed that these quality metrics are no cause for concern is a significant overstatement.
Thursday, September 15, 2011
Dishonesty
So the comment in this post did not refer to Deborah Stebbins or the new service being considered.
But let me give an example so any reader can independently evaluate why I do not believe the arguments for the new service will be honestly presented. The following is quite representative of the type of statements that Stebbins will make and which I consider less than truth, the whole truth and nothing but the truth. In the video for the September 12 meeting. Stebbins states (about 1:05):
Now this quote contains two ideas conflated. One is that the perception that the District has not hit budget is incorrect and that 2009/2010, was, in fact above the budget. (Why can I hear John Stewart in my head going, "Pow! Take that Mr. Gorelick, can't execute a budget? You're so wrong; 2009/2010 was awesome!")
Stebbins has been CEO of the District for almost four years. She should consider herself primarily responsible for the financial performance for 2007/8, 2008/9, 2009/10, and 2010/11. The June 30, 2007 audited financial statements show net assets for the hospital of 9.9 million dollars. The June 30, 2008 audited financial statements show net assets of 7.4 million dollars. In other words, In her first year as CEO, Stebbins underperformed the budget by 2.5 million dollars. The June 30, 2009 audited financial statement show net assets of 8.1 million dollars which overperformed the budget by a significant amount (some 600k). A mixed bag through those first two years, but nothing to suggest a fundamental problem.
In 2009/2010, the budget called for the hospital to have a net income of 360k and the June 30, 2010 audited financial statements show net assets of 10.1 million dollars. In other words, a net income of about 2.0 million dollars which greatly exceeded that years budgeted number. In fact, Stebbins at this point had added slightly to the net assets from the time she took over. (Keep in mind though that this feat -about a 200k increase, even without the closer look I want to take below, was only possible with over 17 million dollars of tax subsidy from the parcel tax. Perhaps not so great a performance?)
Let's take a closer look at 2009/10 (all numbers unaudited - in thousands):
Month YTD Budget YTD Actual YTD Cumulative
7/09 18 61 +43
8/09 34 103 +69
9/09 104 107 + 3
10/09 127 142 +15
11/09 cannot access - 404 error
12/09 74 (151) -224
1/10 133 ( 74) -207
2/10 205 ( 30) -235
3/10 233 ( 5) -228
4/10 319 (245) -564
5/10 340 (353) -692
6/10a 359 (335) -694
6/10b --- 2165 +1471
So look at the line labeled 6/10b. That line represents the IGT money received by the District which was NOT part of the budget for 2009/2010. Without that "bluebird" as Director Battani characterized it, there is no way that Stebbins could have "exceeded our budget bottom line" for 2009/2010.
Furthermore, as I have documented here, there is no way that Stebbins can contend that Management came close to meeting the 2010/2011 budget. The unaudited results suggest a miss of between 1.5 and 2 million dollars (depending on how you true up surprises). We also know that Stebbins (and the management team) cannot point to July, 2011's results as any indication that they can follow a budget. In just one month, 135k has already been lost which means a miss vs. budget in just one month of 238k.
Bottom line, the Hospital has lost money over Stebbins's tenure, not come close to generating enough cash flow to fund the seismic retrofit, and only survives due to "free" money either in the form of the parcel tax or IGT money. Readers, please evaluate this information and judge for yourself whether that "perception" she calls out is a misperception or reality.
But let me give an example so any reader can independently evaluate why I do not believe the arguments for the new service will be honestly presented. The following is quite representative of the type of statements that Stebbins will make and which I consider less than truth, the whole truth and nothing but the truth. In the video for the September 12 meeting. Stebbins states (about 1:05):
"But I have to be honest that the majority of what will improve, even beyond what we have budgeted, and I think there is a perception [editor: Hello readers associated with District Management] that we have not hit budget in the past few years. In fact, prior to 2011, in 2009/2010 we exceeded our budgeted bottom line. We hope to do that again; that's always our target to exceed budget."
Now this quote contains two ideas conflated. One is that the perception that the District has not hit budget is incorrect and that 2009/2010, was, in fact above the budget. (Why can I hear John Stewart in my head going, "Pow! Take that Mr. Gorelick, can't execute a budget? You're so wrong; 2009/2010 was awesome!")
Stebbins has been CEO of the District for almost four years. She should consider herself primarily responsible for the financial performance for 2007/8, 2008/9, 2009/10, and 2010/11. The June 30, 2007 audited financial statements show net assets for the hospital of 9.9 million dollars. The June 30, 2008 audited financial statements show net assets of 7.4 million dollars. In other words, In her first year as CEO, Stebbins underperformed the budget by 2.5 million dollars. The June 30, 2009 audited financial statement show net assets of 8.1 million dollars which overperformed the budget by a significant amount (some 600k). A mixed bag through those first two years, but nothing to suggest a fundamental problem.
In 2009/2010, the budget called for the hospital to have a net income of 360k and the June 30, 2010 audited financial statements show net assets of 10.1 million dollars. In other words, a net income of about 2.0 million dollars which greatly exceeded that years budgeted number. In fact, Stebbins at this point had added slightly to the net assets from the time she took over. (Keep in mind though that this feat -about a 200k increase, even without the closer look I want to take below, was only possible with over 17 million dollars of tax subsidy from the parcel tax. Perhaps not so great a performance?)
Let's take a closer look at 2009/10 (all numbers unaudited - in thousands):
Month YTD Budget YTD Actual YTD Cumulative
7/09 18 61 +43
8/09 34 103 +69
9/09 104 107 + 3
10/09 127 142 +15
11/09 cannot access - 404 error
12/09 74 (151) -224
1/10 133 ( 74) -207
2/10 205 ( 30) -235
3/10 233 ( 5) -228
4/10 319 (245) -564
5/10 340 (353) -692
6/10a 359 (335) -694
6/10b --- 2165 +1471
So look at the line labeled 6/10b. That line represents the IGT money received by the District which was NOT part of the budget for 2009/2010. Without that "bluebird" as Director Battani characterized it, there is no way that Stebbins could have "exceeded our budget bottom line" for 2009/2010.
Furthermore, as I have documented here, there is no way that Stebbins can contend that Management came close to meeting the 2010/2011 budget. The unaudited results suggest a miss of between 1.5 and 2 million dollars (depending on how you true up surprises). We also know that Stebbins (and the management team) cannot point to July, 2011's results as any indication that they can follow a budget. In just one month, 135k has already been lost which means a miss vs. budget in just one month of 238k.
Bottom line, the Hospital has lost money over Stebbins's tenure, not come close to generating enough cash flow to fund the seismic retrofit, and only survives due to "free" money either in the form of the parcel tax or IGT money. Readers, please evaluate this information and judge for yourself whether that "perception" she calls out is a misperception or reality.
Sunday, September 11, 2011
Fiduciary Responsibility
I always assumed that being on the Board of the District meant I had a fiduciary duty to the citizens of the District (whether they voted for me or not). Maybe I am wrong and there is no such obligation. Certainly, some of my fellow Board members act as if there is no reason to exercise utmost care in spending money or evaluating new investments. I mean when Director Battani can chastise me publicly for caring whether the District will be in violation of loan covenants or get upset that I ask too many questions about the budget, then clearly, (just my opinion) fiduciary responsibility is not at the top of her priority list.
Nonetheless, I boil down my approach to evaluating investments to 3 questions:
1. Do I trust that execution will be successful? This encompasses an evaluation of the credibility and competence of the team charged with overseeing the investment project. I look at track record (has this management team met budgets in the past? have other projects been completed in a timely manner? have commitments made in the past been met?). The Board majority apparently answers these questions affirmatively for the current management team although I look at the near constant losses, the missed dates on the wound care project, the loss of the Kaiser contract, and the seismic retrofit debacle (I could actually go on, but I think this is sufficient) and cannot fathom my fellow Board members' thinking.
2. Is the analysis thorough and accurate? Bland reassurances with spreadsheets that have no backup and are not provided on a timely basis are hardly confidence building. The amount of analysis should be proportional to the size of investment. Any numbers should have justification and backup that can be readily referenced in real time. Putting the package together for evaluation should be considered a project and if deadlines are missed or the information presented has obvious flaws then that should be a huge flag. Of course, if the team presenting the information has shown themselves to be willing to lie, fib, or shade the truth (just different degrees of dishonesty) in the past when doing analysis then there is little reason to proceed. A very smart blogger, d-squared, had this to say in another context:
3. Have the costs, benefits, and risks been presented? It's fine to talk about the wonderful things that a project will yield. The analysis may show that the investment has a great return, but unless you factor in risks, then the job is less than half done. After all, a lottery ticket pays off millions for just a dollar investment, but the probability of winning is very small. Every project has risks and the individual elements within a project has risks too. An analysis might have zero spread in the anticipated revenues, but huge variations in the anticipated expenses for example. If the analysis is presented without a discussion of risk and, preferably, a sensitivity analysis of the relevant elements then it is incomplete.
People who would never make a personal investment or act in their job while ignoring these principles are quite happy to throw them out the window when it comes to the Hospital.
Nonetheless, I boil down my approach to evaluating investments to 3 questions:
1. Do I trust that execution will be successful? This encompasses an evaluation of the credibility and competence of the team charged with overseeing the investment project. I look at track record (has this management team met budgets in the past? have other projects been completed in a timely manner? have commitments made in the past been met?). The Board majority apparently answers these questions affirmatively for the current management team although I look at the near constant losses, the missed dates on the wound care project, the loss of the Kaiser contract, and the seismic retrofit debacle (I could actually go on, but I think this is sufficient) and cannot fathom my fellow Board members' thinking.
2. Is the analysis thorough and accurate? Bland reassurances with spreadsheets that have no backup and are not provided on a timely basis are hardly confidence building. The amount of analysis should be proportional to the size of investment. Any numbers should have justification and backup that can be readily referenced in real time. Putting the package together for evaluation should be considered a project and if deadlines are missed or the information presented has obvious flaws then that should be a huge flag. Of course, if the team presenting the information has shown themselves to be willing to lie, fib, or shade the truth (just different degrees of dishonesty) in the past when doing analysis then there is little reason to proceed. A very smart blogger, d-squared, had this to say in another context:
Fibbers' forecasts are worthless. Case after miserable case after bloody case we went through, I tell you, all of which had this moral. Not only that people who want a project will tend to make innaccurate projections about the possible outcomes of that project, but about the futility of attempts to "shade" downward a fundamentally dishonest set of predictions. If you have doubts about the integrity of a forecaster, you can't use their forecasts at all. Not even as a "starting point".(Actually the original context was investment. He translated this lesson to politics. Since District Board membership has both a political and fiduciary element, it applies doubly.)
3. Have the costs, benefits, and risks been presented? It's fine to talk about the wonderful things that a project will yield. The analysis may show that the investment has a great return, but unless you factor in risks, then the job is less than half done. After all, a lottery ticket pays off millions for just a dollar investment, but the probability of winning is very small. Every project has risks and the individual elements within a project has risks too. An analysis might have zero spread in the anticipated revenues, but huge variations in the anticipated expenses for example. If the analysis is presented without a discussion of risk and, preferably, a sensitivity analysis of the relevant elements then it is incomplete.
People who would never make a personal investment or act in their job while ignoring these principles are quite happy to throw them out the window when it comes to the Hospital.
Saturday, September 10, 2011
Stupid, Stupid, Stupid
From the 9/12 closed session agenda:
Discussion of Report Involving Trade Secrets:
Under the Brown Act, I could and probably should (given my responsibility to the community) say much more but I am hampered by what I can say by, what I consider, certain dishonest people making dishonest threats.
Discussion of Report Involving Trade Secrets:
1. Discussion of Hospital Trade Secrets applicable to development of new
hospital services, programs and facilities related to long-term care
expansion. No action will be taken.
Estimated Date of Public Disclosure: October, 2011
Under the Brown Act, I could and probably should (given my responsibility to the community) say much more but I am hampered by what I can say by, what I consider, certain dishonest people making dishonest threats.
Thursday, September 8, 2011
50,000 Administrative Fine
Some quick, relatively unfiltered thoughts:
1. The first I knew about this was last night at about 10:30pm. I am going to find out whether that's a problem or not by reaching out to people who fill out these types of forms and deal with the State. They can tell me whether the Board should have been or was informed (it happened prior to my election) and whether there would have been advance warning of the fine. If I should have known about it before the news report then that is obviously a problem.
2. This was one fine for multiple patients. Not all of the patients in the report were of the same level of concern. Just by reading the report (and I do not know to what extent the report is one-sided), in my opinion, the case of patient 2 is clearly malpractice (my opinion only). Keep in mind that patient 2 was hospice and likely unconscious so I am not sure how much loading him up with an inappropriate dose of narcotics hastened his death, but it appears, from the report, that it did.
3. I know that the interim pharmacy director has been terminated, but I do not know who the other people identified only by number are. Therefore, I do not know what action may have been taken. I have barely skimmed the "plan of correction" side of the report so it may be right there in the Hospital's response.
4. I will be inquiring as to whether there are any other 2567 plan of corrections that have been filed in the last two years to try to minimize surprises like this in the future.
In summary, clearly things went wrong and it was a process problem and not a single incident. Hopefully, the Hospital has made the necessary changes; the State has approved the plan of correction so it appears that they are satisfied for now.
1. The first I knew about this was last night at about 10:30pm. I am going to find out whether that's a problem or not by reaching out to people who fill out these types of forms and deal with the State. They can tell me whether the Board should have been or was informed (it happened prior to my election) and whether there would have been advance warning of the fine. If I should have known about it before the news report then that is obviously a problem.
2. This was one fine for multiple patients. Not all of the patients in the report were of the same level of concern. Just by reading the report (and I do not know to what extent the report is one-sided), in my opinion, the case of patient 2 is clearly malpractice (my opinion only). Keep in mind that patient 2 was hospice and likely unconscious so I am not sure how much loading him up with an inappropriate dose of narcotics hastened his death, but it appears, from the report, that it did.
3. I know that the interim pharmacy director has been terminated, but I do not know who the other people identified only by number are. Therefore, I do not know what action may have been taken. I have barely skimmed the "plan of correction" side of the report so it may be right there in the Hospital's response.
4. I will be inquiring as to whether there are any other 2567 plan of corrections that have been filed in the last two years to try to minimize surprises like this in the future.
In summary, clearly things went wrong and it was a process problem and not a single incident. Hopefully, the Hospital has made the necessary changes; the State has approved the plan of correction so it appears that they are satisfied for now.
Wednesday, September 7, 2011
Preliminary Board Packet for 9/12
The preliminary Board packet is up at the District's website. I have already commented on some of the financial pieces. I am not sure why the rest of the Board is so sanguine in the face of continuing losses.
I am of mixed emotions regarding one item in the packet. In a letter dated August 25, 2011, Joe Barger, Alameda County Interim Medical Director, approved routing of stroke patients to Alameda Hospital as of August 29. Just noticed the press release, and, so far, no change to the online EMS manual. I say I am of mixed emotions because although I would never, if at all possible, want to receive care for a CVA at Alameda Hospital (please note that to anyone who may be around if I have a witnessed event, I want transport elsewhere!), the Hospital did set a goal and meet it. The original press release is here (scroll down a bit) and, although it's been 10 months when they originally stated 6 months, missing a schedule by only 4 months is much better than most initiatives Management has been working at.
Last item is not related to the Hospital, but is related to strokes. A great study published in the NEJM shows that a stroke treatment which many thought would be beneficial was in fact quite harmful.
I am of mixed emotions regarding one item in the packet. In a letter dated August 25, 2011, Joe Barger, Alameda County Interim Medical Director, approved routing of stroke patients to Alameda Hospital as of August 29. Just noticed the press release, and, so far, no change to the online EMS manual. I say I am of mixed emotions because although I would never, if at all possible, want to receive care for a CVA at Alameda Hospital (please note that to anyone who may be around if I have a witnessed event, I want transport elsewhere!), the Hospital did set a goal and meet it. The original press release is here (scroll down a bit) and, although it's been 10 months when they originally stated 6 months, missing a schedule by only 4 months is much better than most initiatives Management has been working at.
Last item is not related to the Hospital, but is related to strokes. A great study published in the NEJM shows that a stroke treatment which many thought would be beneficial was in fact quite harmful.
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