Santa Paula Times

City Council asks for investigation of Hospital board

October 29, 2003
Santa Paula City Council

The City Council asked Monday that the state Attorney General’s Office investigate Santa Paula Memorial Hospital to see if its board of directors might have violated government code guiding nonprofit corporations.

By Peggy KellySanta Paula TimesThe City Council asked Monday that the state Attorney General’s Office investigate Santa Paula Memorial Hospital to see if its board of directors might have violated government code guiding nonprofit corporations.The council also said they would ask the attorney general to let the city sue the SPMH board if the attorney general declines to intercede.The decision came after questioning of SPMH board members and comments by Supervisor Kathy Long.City Manager Wally Bobkiewicz said a council ad hoc committee had tried to meet with the full SPMH board but was told the county – who SPMH had been negotiating an affiliation with – needed to approve.Last week, correspondence released under a Public Records Act request showed that the negotiations had stalled.Supervisor Long assured the council that although the correspondence showed negotiations as a “little rocky, little bumps in the road. . .there was some push-me pull-me” in negotiations that can be resolved.The SPMH audit is almost complete and “other information we were waiting on from SPMH has made it to our desk. . .we expect tomorrow night to roll up our sleeves,” and continue with negotiations.SPMH is continuing to pursue talks in good faith, said Carol Burhoe, a SPMH trustee and chair of the negotiation committee, but “to ensure the best possible outcome we are exploring options with Community Memorial Hospital. It is important to understand that the negotiation was never intended,” to be exclusive, and “we expect to have a confidentiality agreement signed this week with CMH.”Rumors and assertions that SPMH was not negotiating in good faith dealt “a serious blow to the hospital’s potential viability” and that the county was provided with “full and open access to all records sought.”The SPMH staff and doctors are the “heroes” said SPMH director Rodney Fernandez, who noted that hospital physicians formed a committee to ensure that the “high standard of care” continues.Fernandez said the council is understandably “anxious” but the county funded audit took time to complete. The council must “ask the county to keep moving and keep pressure on the hospital board to keep moving,” towards a resolution that would keep SPMH viable.“You are aware that we received the letters,” said Councilman Rick Cook of the negotiation correspondence. “None of them raised a red flag to you?”Fernandez said the letters dealt with generalities but “if you ask if things in those letters concern me, yes. . .”After some sharp comments, Cook said, “this board is not the one going down in history as saving the hospital,” but perhaps losing the hospital.Councilman Ray Luna asked Sup. Long to define the proposed partnership, and she noted that “we put a template out there for a lease arrangement, the hospital retains ownership of the facility and land,” among other issues.“Does that include keeping the current board?” asked Luna.
“That has not been discussed at this point,” said Supervisor Long.The county’s suggestion that SPMH suspend operations stemmed from “our concern” garnered from the community that shortages of supplies and medical service personnel presented a threat to the hospital’s license.“. . .once you lose licenses you don’t get them back,” and a temporary closure would have allowed SPMH to “put the house in order. . .it wasn’t a strong arm, it was not intended to be a threat to anyone. It’s how licenses work.” Patient safety is no longer an issue, she noted.Vice Mayor Gabino Aguirre said the correspondence “alluded to the fact that there was not a very good exchange of information. . .earlier, we heard the county had full and open access.”“Not 100 percent complete,” said Supervisor Long. Information needed for the audit should have been made available at different stages and “there have been delays in some of that information” needed.Aguirre “understood from the very beginning that SPMH look at various options and select one and move forward. . .” and asked if SPMH initiating negotiations with CMH would impact those with the county.The county would be the strongest partner for SPMH, said Supervisor Long.Councilwoman Mary Ann Krause questioned why SPMH continued to keep Mark Gregson, the Quorum Health Resources hospital CEO, in place.Gregson has the “memory” of issues that “some of us don’t know and it would be almost impossible” for board members to attain, said Burhoe. “I think one thing you don’t understand is that the Quorum contract ended July 31st,” and Gregson and Dan Jessup, the former CFO, were kept on board. “It’s no different then to go to any [temporary worker] agency, basically, in effect we’re renting the CEO from Quorum.”After Bobkiewicz outlined council options, Councilman Ray Luna said, “I feel we need to start the process of eminent domain and the attorney general. Hopefully, when that’s done SPMH will have come up with an agreement,” for partnering.After the almost hour-long closed session, Aguirre said that the hospital first announced it was on the verge of closing in December 2002 and asked for donations. “Now, 10 months later, we don’t see any tangible results, information is limited, financial information is not made available, actually things have gotten worse. The news is a lack of news.”Krause said the city had obtained the SPMH articles of incorporation and that the hospital has lost sight of its mission of service to all residents of the river valley. “I think this is a very specific charge and something has been lost in the proceedings of the last year. . .”Cook made the motion directing City Attorney Karl Berger to file a written complaint with the Attorney General’s Office supported by the full council.On Wednesday, Supervisor Long confirmed that the scheduled meeting between the county and SPMH had occurred the previous day.“We’re back on track and negotiations are back on the table,” with the audit expected to be completed next week. “Then, we’ll be able to put the business plan together and see if this will work. There’s commitment on both sides; we really do want this to work and we’ll do our best to get there.”“It’s not about trying to blame anyone, I don’t want to point fingers at board members,” said Krause on Thursday. “It’s simply a matter of trying to protect the asset so far down the line from when the alarm was first sounded. . .and the hospital’s financial condition has continued to deteriorate.”