1. The Closed Session agenda has a trade secrets item that does not meet Brown Act disclosure requirements. I hate the fact that I am associated with a Board that does not have a sufficient commitment to transparency. Of course the vote is 4 to 1 against changing anything. Mr. Driscoll, the District's counsel stands firmly behind his interpretation of the law (against fuller disclosure) even though the Brown Act if fairly explicit about the form that closed session agendas should take and most interpretations of the law I have read suggest placeholder type of language is inappropriate. Of course, from a practical point of view, Mr. Driscoll is right because there is little to no downside to this type of violation.
2. September financial reports. It would seem that based on Debi Stebbins statements on 11/2 that the District would have a loss for the first quarter. She estimated the decision by the State to withdraw the sub-acute rate changes to be worth about 1.5 million annually. I'm not sure why, but the impact is much greater than that; it appears the positive is to the tune of about 2.4 million annually (about 200k per month). This is surprising since the 1.5 million came straight from Stebbins and, I think, the budget for this year stated 2.1 million total including the SNF rate changes and those were approved. Not sure why the large discrepancy but, in this case, not a case of her being overly optimistic. By rights, given the huge swing to the positive, the District should be swimming in net income. Unfortunately, the IGT numbers had to be adjusted the other direction so that the YTD loss will be reported as 272k. If you would like to keep FY11 stuff in FY11 and FY12 in FY12 then the YTD is the original -585k + 617k for sub-acute - 121k for IGT or at YTD loss for just FY12 numbers of 89k. That is obviously considerably better than previous and suggests that District has a chance of not having a miserable year. It's only 284k below budget. Certainly,holding losses to below 100k and missing budget by more than a quarter of a million dollars represents a stellar performance on the part of CEO Stebbins. She is to be complimented.
3. Modification of Bank of Alameda loans. I thought we had done this already, but the Board needs to approve the changes to the agreements that are necessitated by poor financial performance. Bank of Alameda is more than willing to accommodate since the District is pretty much legally obligated to make good on these debts. This minimization/elimination of risk is one reason that Chris Zimmerman is so eager to lease to the District. He really does not have to worry about the District ever going bankrupt. It is unfortunate for the citizens of Alameda because their liability just keeps on piling up due to mismanagement. Stebbins is very comfortable putting other people's money at risk.
4. Waters Edge. I am sadly thinking it will be approved. Chris Zimmerman gets a partner and payments totaling over 20,000,000 through the years for a lease rate that is higher than comparables in the Bay Area and for more beds than will actually be occupied. Debi Stebbins gets a mulligan on her dismal performance. Alamedans gains not a single SNF bed. Alamedans take on a huge risk that depends on the Hospital staying open for 20 years despite consistent operational losses, questionable quality of outcomes, and current violation of OSHPD regulations. All I can really do is witness this since the votes appear to be there.
Saturday, November 5, 2011
Thursday, November 3, 2011
Memo to Debi Stebbins
In the past, I have suggested that you should resign.
If you want to avoid criticism by me with regard to the financial performance of the District (loses money), your credibility (the escape clause is weak, at best, based on Chris Zimmerman's own statements), and the quality of the financial analysis you endorse (the Water's Edge project numbers are overly optimistic and the "Return on Investment/Contract Risk" presentation is a completely non-standard/useless presentation) then there is an easy solution. Resign. One would suspect though that the significant compensation that you receive and the severance of almost 500,000 promised in your contract would preclude you from taking advantage of that solution to your problem.
If you want to avoid criticism by me with regard to the financial performance of the District (loses money), your credibility (the escape clause is weak, at best, based on Chris Zimmerman's own statements), and the quality of the financial analysis you endorse (the Water's Edge project numbers are overly optimistic and the "Return on Investment/Contract Risk" presentation is a completely non-standard/useless presentation) then there is an easy solution. Resign. One would suspect though that the significant compensation that you receive and the severance of almost 500,000 promised in your contract would preclude you from taking advantage of that solution to your problem.
Wednesday, November 2, 2011
11/2 Board Meeting (Actually the Water's Edge Public Forum)
Just some odds and ends:
1. AB97 cuts for distinct part SNF's were approved. The rate cut chart is here. The sub-acute rates for distinct part were not cut due to a shortage in beds. The impact on the District's finances will be substantial - somewhere around 1.5 million dollars or more (I believe it is more) positive. I think one way to calculate it is to go to here and compare the difference between the 08/09 reimbursement rate and the most current reimbursement rate. The District has somewhere between 900 and 1000 sub-acute days per month and it looks like the difference is around $725 vs. about $875 so about $150 per day. This makes the first three month loss out to be somewhere between 150k and 250k which is quite an improvement from the $585k in the current financial report through September. This will be updated for the 11/7 Board meeting.
2. The South Shore facility was originally estimated to contribute 800k per year to the bottom line. A comparison between that number and the actuals may be available for the next Board meeting.
3. Mr. Zimmerman of Waters Edge wants a partnership to continue operation of Water's Edge. He sees this as an opportunity to do estate planning and make sure that the facility stays locally operated. One glitch is that he was not prepared to allow that the Board can exit the deal by exercising the "escape clause" with an exit from acute care services. It is clear that he does not envision that this will happen, but I believe that it is clearly a possibility especially over a 20 year period. He was NOT willing to say that such an event would trigger this "escape clause". He felt that discussion was too speculative to commit to allowing the Board to exit the deal in that fashion. Debi Stebbins wants to insist that she is being unfairly maligned, but this is exactly what I feared and if that cannot be part of the deal then the District is potentially liable for the entire 20,000,000 of lease payments.
4. Both Stebbins and Battani talked about using this deal so that the District would be "less reliant on the parcel tax." That suggests that without the parcel tax, the District loses money, but that with the assistance of the parcel tax, the Hospital stays open. The truth is without additional revenue, the parcel tax is not enough to allow the District to continue to operate the Hospital. In addition, the Waters Edge project has to meet the numbers in the pro forma's or it might not be enough to save the Hospital.
5. Stebbins does not want an urgent care center in Alameda. As best I can recall, the statement went, "That is so nineties; read the literature. Why would we want to open an urgent care center when we have a fully staffed emergency room available for people to use?" My answer was that there was a difference in cost for people, but I confess, I do not have the literature. I do know at Kaiser, there is a separate clinic that triage will divert patients to at the ER that looks, to me, a lot like an urgent care center. I also know that many Alameda residents I have spoken with want to keep the Alameda Hospital ER open for urgent care issues, but are not interested in being admitted to Alameda Hospital for acute care. So I don't know if that makes Stebbins right and me wrong or vice-versa, but clearly these Alamedans would be just as satisfied with an urgent care center and clearly they value the Hospital's ER because it can offer those services. I will point out that the tremendously successful Washington Hospital runs an urgent care (and an ER as well)
1. AB97 cuts for distinct part SNF's were approved. The rate cut chart is here. The sub-acute rates for distinct part were not cut due to a shortage in beds. The impact on the District's finances will be substantial - somewhere around 1.5 million dollars or more (I believe it is more) positive. I think one way to calculate it is to go to here and compare the difference between the 08/09 reimbursement rate and the most current reimbursement rate. The District has somewhere between 900 and 1000 sub-acute days per month and it looks like the difference is around $725 vs. about $875 so about $150 per day. This makes the first three month loss out to be somewhere between 150k and 250k which is quite an improvement from the $585k in the current financial report through September. This will be updated for the 11/7 Board meeting.
2. The South Shore facility was originally estimated to contribute 800k per year to the bottom line. A comparison between that number and the actuals may be available for the next Board meeting.
3. Mr. Zimmerman of Waters Edge wants a partnership to continue operation of Water's Edge. He sees this as an opportunity to do estate planning and make sure that the facility stays locally operated. One glitch is that he was not prepared to allow that the Board can exit the deal by exercising the "escape clause" with an exit from acute care services. It is clear that he does not envision that this will happen, but I believe that it is clearly a possibility especially over a 20 year period. He was NOT willing to say that such an event would trigger this "escape clause". He felt that discussion was too speculative to commit to allowing the Board to exit the deal in that fashion. Debi Stebbins wants to insist that she is being unfairly maligned, but this is exactly what I feared and if that cannot be part of the deal then the District is potentially liable for the entire 20,000,000 of lease payments.
4. Both Stebbins and Battani talked about using this deal so that the District would be "less reliant on the parcel tax." That suggests that without the parcel tax, the District loses money, but that with the assistance of the parcel tax, the Hospital stays open. The truth is without additional revenue, the parcel tax is not enough to allow the District to continue to operate the Hospital. In addition, the Waters Edge project has to meet the numbers in the pro forma's or it might not be enough to save the Hospital.
5. Stebbins does not want an urgent care center in Alameda. As best I can recall, the statement went, "That is so nineties; read the literature. Why would we want to open an urgent care center when we have a fully staffed emergency room available for people to use?" My answer was that there was a difference in cost for people, but I confess, I do not have the literature. I do know at Kaiser, there is a separate clinic that triage will divert patients to at the ER that looks, to me, a lot like an urgent care center. I also know that many Alameda residents I have spoken with want to keep the Alameda Hospital ER open for urgent care issues, but are not interested in being admitted to Alameda Hospital for acute care. So I don't know if that makes Stebbins right and me wrong or vice-versa, but clearly these Alamedans would be just as satisfied with an urgent care center and clearly they value the Hospital's ER because it can offer those services. I will point out that the tremendously successful Washington Hospital runs an urgent care (and an ER as well)
Monday, October 31, 2011
It's Not Hard to Be Right When the Odds Are With You
Back on April 6, 2011 I wrote a blog post titled, "2011-12 Budget - Possibly an Insurmountable Challenge ." Damon Runyon famously wrote in Guys and Dolls, "It may be that the race is not always to the swift, nor the battle to the strong - but that's the way to bet." (He also wrote, "One of these days in your travels a guy is going to come up to you and show you a nice brand-new deck of cards on which the seal is not yet broken, and this guy is going to offer to bet you that he can make the jack of spades jump out of the deck and squirt cider in you ear. But son, do not bet this man, for sure as you stand there, you are going to wind up with an earful of cider," but that is a different post.)
Anyway, the question is how can Stebbins make the projections she does without totally sacrificing here credibility. It is because she is an hopeless optimist. Suppose you have some outcome involving a complicated process (or even a simple, but repeated process) and you want to predict what might happen. If you take the most likely event for each step then you will undoubtedly miss the mark. Let's say you are 95% sure of each result going your way. If it takes 10 correct guesses to reach the desired outcome then you only have a 60% chance of being right overall. Lower the odds to 90% (still pretty good) and the odds drop to about 1 in 3 (35%). And make it 80% for each individual part and you may as well give up because you are going to fall short about 9 times out of 10 (11% success). Now suppose the number of things that have to go your way are not 10, but an even dozen; the odds drop to 54%, 28%, and 7% respectively.
When you look at the District budget and wonder what, so spectacularly, is going wrong, you just have to understand that the budget is based on an interconnected set of events. All of these things were predicted towards the overly optimistic side. Stebbins had no choice really because a realistic acknowledgment of the prospects for 2011/2012 would have been admitting the Hospital's acute care services were doomed and she was not prepared to go there. Just some of the interconnected pieces that make up the District's budget:
1. Acute care census (including critical care).
2. # of ER visits.
3. % of ER visits that become inpatient admissions.
4. # of inpatient surgeries.
5. # of outpatient suregeries.
6. Sub-acute census.
7. SNF census.
8. Medicare vs. Medi-Cal mix in the SNF census.
9. Accuity of Medicare patients admitted to SNF.
10. Expenses for nursing (in all units).
11. Other expenses.
12. Insurance mix for acute care services (Medicare/Medi-Cal/3rd party insured/private pay).
13. Sick time and vacation time.
14. Efficiency of personnel (such as the business office).
15. Case mix index.
16. Length of Stay (ties into census so may not be strictly separate).
17. Disproportionate cost stays.
18. Government reimbursement policies.
19. Outcome of labor negotiations.
20. Outcome of 3rd party payer negotiations.
21. Wound care center schedule.
22. Wound care center budget.
That's all I can think of off the top of my head. Clearly, if each one of these represents anywhere from a 100,000 to 2,000,000 dollar swing in the budget and they are all estimated towards the high side then you can have a budget which, on paper looks reasonable, but is impossible to meet. That's what happened with last year's budget (2010/2011). That's what is happening with this year's budget (2011/2012). That's the flaw in the Waters Edge project analysis/budget.
Anyway, the question is how can Stebbins make the projections she does without totally sacrificing here credibility. It is because she is an hopeless optimist. Suppose you have some outcome involving a complicated process (or even a simple, but repeated process) and you want to predict what might happen. If you take the most likely event for each step then you will undoubtedly miss the mark. Let's say you are 95% sure of each result going your way. If it takes 10 correct guesses to reach the desired outcome then you only have a 60% chance of being right overall. Lower the odds to 90% (still pretty good) and the odds drop to about 1 in 3 (35%). And make it 80% for each individual part and you may as well give up because you are going to fall short about 9 times out of 10 (11% success). Now suppose the number of things that have to go your way are not 10, but an even dozen; the odds drop to 54%, 28%, and 7% respectively.
When you look at the District budget and wonder what, so spectacularly, is going wrong, you just have to understand that the budget is based on an interconnected set of events. All of these things were predicted towards the overly optimistic side. Stebbins had no choice really because a realistic acknowledgment of the prospects for 2011/2012 would have been admitting the Hospital's acute care services were doomed and she was not prepared to go there. Just some of the interconnected pieces that make up the District's budget:
1. Acute care census (including critical care).
2. # of ER visits.
3. % of ER visits that become inpatient admissions.
4. # of inpatient surgeries.
5. # of outpatient suregeries.
6. Sub-acute census.
7. SNF census.
8. Medicare vs. Medi-Cal mix in the SNF census.
9. Accuity of Medicare patients admitted to SNF.
10. Expenses for nursing (in all units).
11. Other expenses.
12. Insurance mix for acute care services (Medicare/Medi-Cal/3rd party insured/private pay).
13. Sick time and vacation time.
14. Efficiency of personnel (such as the business office).
15. Case mix index.
16. Length of Stay (ties into census so may not be strictly separate).
17. Disproportionate cost stays.
18. Government reimbursement policies.
19. Outcome of labor negotiations.
20. Outcome of 3rd party payer negotiations.
21. Wound care center schedule.
22. Wound care center budget.
That's all I can think of off the top of my head. Clearly, if each one of these represents anywhere from a 100,000 to 2,000,000 dollar swing in the budget and they are all estimated towards the high side then you can have a budget which, on paper looks reasonable, but is impossible to meet. That's what happened with last year's budget (2010/2011). That's what is happening with this year's budget (2011/2012). That's the flaw in the Waters Edge project analysis/budget.
Friday, October 28, 2011
You Can't Get Fooled Again.
Or can you?
The District will hold an orchestrated propaganda push on November 2. The point will be to introduce the community to the Water's Edge project. Let's look at the track record of Deborah Stebbins in predicting good things for the Hospital and having them come true.
1. 2009/2010 positive budget: Oops, there was a positive number at the end of the year but only due to an unanticipated surprise in the form of the IGT money from the State. This is the best prediction she has made. It gets worse from here.
2. The renewal of the Kaiser contract: Not so much.
3. Completion of a financing plan for seismic retrofit: Uh uh.
4. Profits from the 1206b clinic: Not really.
5. The wound care center open in 2010/2011: Still not open.
6. The wound care center providing positive contribution in 2010/2011 and again in 2011/2012: Hope you weren't holding your breath.
7. A 2010/2011 positive budget: Only if you think losing millions equals "positive".
8. A 2011/2012 positive budget: Maybe it was going to be too easy, so she decided to start with a $580,000 loss in only three months to give herself a challenge.
9. The 50,000 administrative fine from DHCS has a chance of being reversed on appeal: I am confident enough in this failure of Stebbins's predictive powers to say it publicly even though the actual decision may take a long time. Snowball's chance in Hell doesn't even begin to describe the futility of this appeal. Even though it is a smart business/public relations decision, it only postpones the inevitable.
10. Finally and most distressing is the prediction that is going to be credulously believed by too many that the contribution of the Water's Edge project will save the Hospital. Also, the idea that the escape clause is anything but a multimillion dollar liability that will be litigated when it has to be exercised. (The Zimmermans, owners of Waters Edge, are not going to give up over $20,000,000 of guaranteed income without a fight.)
Unless Director Chen bucks the formidable pressure that will be brought to bear on him, the District is going to be in an even bigger hole on November 8 (after a November 7 Board resolution to approve this impending disaster). Of course, most people have learned the following lesson well: better to be wrong and with the crowd than right and standing alone. Who could blame Director Chen if he votes yes? After all, Director Battani and Director McCormick plan to vote with Stebbins (because they believe in her and based on her track record why shouldn't they).
The District will hold an orchestrated propaganda push on November 2. The point will be to introduce the community to the Water's Edge project. Let's look at the track record of Deborah Stebbins in predicting good things for the Hospital and having them come true.
1. 2009/2010 positive budget: Oops, there was a positive number at the end of the year but only due to an unanticipated surprise in the form of the IGT money from the State. This is the best prediction she has made. It gets worse from here.
2. The renewal of the Kaiser contract: Not so much.
3. Completion of a financing plan for seismic retrofit: Uh uh.
4. Profits from the 1206b clinic: Not really.
5. The wound care center open in 2010/2011: Still not open.
6. The wound care center providing positive contribution in 2010/2011 and again in 2011/2012: Hope you weren't holding your breath.
7. A 2010/2011 positive budget: Only if you think losing millions equals "positive".
8. A 2011/2012 positive budget: Maybe it was going to be too easy, so she decided to start with a $580,000 loss in only three months to give herself a challenge.
9. The 50,000 administrative fine from DHCS has a chance of being reversed on appeal: I am confident enough in this failure of Stebbins's predictive powers to say it publicly even though the actual decision may take a long time. Snowball's chance in Hell doesn't even begin to describe the futility of this appeal. Even though it is a smart business/public relations decision, it only postpones the inevitable.
10. Finally and most distressing is the prediction that is going to be credulously believed by too many that the contribution of the Water's Edge project will save the Hospital. Also, the idea that the escape clause is anything but a multimillion dollar liability that will be litigated when it has to be exercised. (The Zimmermans, owners of Waters Edge, are not going to give up over $20,000,000 of guaranteed income without a fight.)
Unless Director Chen bucks the formidable pressure that will be brought to bear on him, the District is going to be in an even bigger hole on November 8 (after a November 7 Board resolution to approve this impending disaster). Of course, most people have learned the following lesson well: better to be wrong and with the crowd than right and standing alone. Who could blame Director Chen if he votes yes? After all, Director Battani and Director McCormick plan to vote with Stebbins (because they believe in her and based on her track record why shouldn't they).
Saturday, October 22, 2011
Worse than I Imagined
That was my reaction when I saw the bottom line number for September. A 349,000 loss in just one month so early in the year! The District has lost over half a million dollars in 3 short months (585k to be more 8precise). The variance to budget is over three quarters of a million dollars in just one quarter (780k to be more precise). And this is with the added benefit of an additional 40k per month because the IGT funds are boosted over the planned budget. Stebbins wants me to believe that she can accurately forecast the intricacies of a deal 20 years out requiring a commitment of over 20,000,000 dollars to the Zimmermans and an operating budget exceeding 1,000,000 dollars per month and she cannot even come close to the mark on a budget that she prepared less than six months ago!
Mark my words, the District is going to be stuck holding the bag (Stebbins has her 18 month severance - a 400-500k golden parachute plus pension benefits) when, the distinct part contribution is not enough to make up for the acute care losses (and that assumes there is any contribution to be had in the first place). Then the District will have to test the escape clause and woe to the taxpayers of Alameda when they find out how expensive this deal (Waters Edge) ultimately becomes. Remember, the Waters Edge deal adds not a single SNF bed for the taxpayers of the District to benefit from; in fact, it raises the price and limits the availabiltiy of SNF beds within the District boundaries.
Mark my words, the District is going to be stuck holding the bag (Stebbins has her 18 month severance - a 400-500k golden parachute plus pension benefits) when, the distinct part contribution is not enough to make up for the acute care losses (and that assumes there is any contribution to be had in the first place). Then the District will have to test the escape clause and woe to the taxpayers of Alameda when they find out how expensive this deal (Waters Edge) ultimately becomes. Remember, the Waters Edge deal adds not a single SNF bed for the taxpayers of the District to benefit from; in fact, it raises the price and limits the availabiltiy of SNF beds within the District boundaries.
Monday, October 17, 2011
No Accountability
During this year's budget debate, I suggested that the numbers were overly optimistic, unrealistic, and inaccurate. My fellow Board members disagreed, sometimes vehemently. Here we are some months later and Management presents another set of numbers that are overly optimistic, unrealistic, and, in my opinion, likely inaccurate.
And the vaunted escape clause for this project is inadequate at best and worthless at worst. The clause allows AH to begin the process of termination, not for any reason, but only for the reasons outlined:
(And the lawyers can and should correct me if I'm wrong. I would be comforted if AH - AH? Are we not the City of Alameda Healthcare District? why is the Hospital always the be all and end all of what people think we should be doing instead of concentrating on improving healthcare outcomes? - had sole discretion for any reason, or no reason, to exercise its termination option, but I am pretty sure that is not the case.)
1. Regulatory reasons: This would be easy for the Zimmerman's to argue that AH overreacted.
2. Elimination or "drastic" reduction in reimbursement: Drastic is not defined so the Zimmerman's can easily argue that there is no problem here. The District's own analysis points out that contribution is positive even when distinct part reimbursement drops to freestanding levels. Never mind that this analysis is incorrect, I wonder if it might lead to an expensive legal fight. Also, what does drastic mean, is it relative to the rate today or relative to each bill passed by the Legislature. What if rates are just reduced 5% more and then frozen for the next 20 years. Does that qualify as "drastic"?
3. Adverse regulatory or statutory requirements: Similar problem as 1 and 2 above.
What is missing is an escape clause if the District no longer qualifies for distinct part because it wants to close down its acute care services. Read the clause again, absent a forced closure by the State, I am not sure that this qualifies unless you read everything after "no longer continue to operate a distinct part SNF whether ..." as moot. But that won't happen because the argument will be that the language would not be present if it was moot.
So there is a good chance that this much touted escape clause which, at a minimum requires continued payment of a minimum of 9 months at the current lease rate plus significant liquidated damages plus the absorption of at least 9 months of operating losses (and losses are almost guaranteed during that 9 months because, otherwise, why would the District be exercising the termination clause in the first place?). In addition, operating losses have to be continued to be absorbed until every last patient has been placed. This is a potential liability far in excess of the numbers that management presented in the non-standard, "ROI/Contract Risk" analysis (an approach and presentation I have never seen in my career). The number easily could be over $5,000,000 and maybe even more because, after all, operating expenses in their own analysis are over $1,000,000 per month. Management has presented a rosy scenario where the District chooses to exercise its termination option while it is still making money. Does nobody else see the contradiction in that analysis?
So back to the budget; Management has already missed budget in just two months of reported results by over half a million dollars. Shouldn't we be asking Management why we should believe them this time instead of complimenting them on their hard work?
And the vaunted escape clause for this project is inadequate at best and worthless at worst. The clause allows AH to begin the process of termination, not for any reason, but only for the reasons outlined:
(And the lawyers can and should correct me if I'm wrong. I would be comforted if AH - AH? Are we not the City of Alameda Healthcare District? why is the Hospital always the be all and end all of what people think we should be doing instead of concentrating on improving healthcare outcomes? - had sole discretion for any reason, or no reason, to exercise its termination option, but I am pretty sure that is not the case.)
1. Regulatory reasons: This would be easy for the Zimmerman's to argue that AH overreacted.
2. Elimination or "drastic" reduction in reimbursement: Drastic is not defined so the Zimmerman's can easily argue that there is no problem here. The District's own analysis points out that contribution is positive even when distinct part reimbursement drops to freestanding levels. Never mind that this analysis is incorrect, I wonder if it might lead to an expensive legal fight. Also, what does drastic mean, is it relative to the rate today or relative to each bill passed by the Legislature. What if rates are just reduced 5% more and then frozen for the next 20 years. Does that qualify as "drastic"?
3. Adverse regulatory or statutory requirements: Similar problem as 1 and 2 above.
What is missing is an escape clause if the District no longer qualifies for distinct part because it wants to close down its acute care services. Read the clause again, absent a forced closure by the State, I am not sure that this qualifies unless you read everything after "no longer continue to operate a distinct part SNF whether ..." as moot. But that won't happen because the argument will be that the language would not be present if it was moot.
So there is a good chance that this much touted escape clause which, at a minimum requires continued payment of a minimum of 9 months at the current lease rate plus significant liquidated damages plus the absorption of at least 9 months of operating losses (and losses are almost guaranteed during that 9 months because, otherwise, why would the District be exercising the termination clause in the first place?). In addition, operating losses have to be continued to be absorbed until every last patient has been placed. This is a potential liability far in excess of the numbers that management presented in the non-standard, "ROI/Contract Risk" analysis (an approach and presentation I have never seen in my career). The number easily could be over $5,000,000 and maybe even more because, after all, operating expenses in their own analysis are over $1,000,000 per month. Management has presented a rosy scenario where the District chooses to exercise its termination option while it is still making money. Does nobody else see the contradiction in that analysis?
So back to the budget; Management has already missed budget in just two months of reported results by over half a million dollars. Shouldn't we be asking Management why we should believe them this time instead of complimenting them on their hard work?
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