Mendocino County Grand Jury
• 2006-2007
Cpr . . . a Breath of Life (Cash Problems Recovery) a Report on Mendocino Coast Health Care District
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 35 findings
F1
The District opened a 54 bed MCDH in June 1971.
No recommendations for this finding
F2
Over time the number of beds had been reduced to 49.
No recommendations for this finding
F3
The previous CEO did not support reducing the number of beds necessary to obtain CAH status.
No recommendations for this finding
F4
CAH limits the number of beds to 25 maximum.
No recommendations for this finding
F5
Historically, the average MCDH bed usage was about 18.
No recommendations for this finding
F6
The current CEO and CFO were hired in the Fall of 2006.
No recommendations for this finding
F7
The MCDH received CAH status in the Fall of 2006.
No recommendations for this finding
F8
The MCDH staff consisted of 295 full and part-time employees at the end of February 2007.
No recommendations for this finding
F9
MCDH is a union facility with a generous benefit package for employees. Wages and benefits account for nearly 60% of total budget costs.
No recommendations for this finding
F10
The MCDH five-member BOD have varied backgrounds in business or health care.
No recommendations for this finding
F11
CAH Medicare reimbursement is 100% of cost plus 1% profit allowance. Non- CAH Medicare reimbursement is approximately 33% of billed charges.
No recommendations for this finding
F12
CAH status and its billing reimbursements has the potential to improve revenue and cash flow.
No recommendations for this finding
F13
Capital Reserves have been substantially depleted.
Related Recommendations (1)
R2
the BOD assure that financial controls implemented by the new management team continue. Both BOD and new senior management pursue all options for increasing revenues while putting cost controls in place, to increase cash flow. Comments The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.
F14
Cash flow continues to be a major issue.
Related Recommendations (1)
R2
the BOD assure that financial controls implemented by the new management team continue. Both BOD and new senior management pursue all options for increasing revenues while putting cost controls in place, to increase cash flow. Comments The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.
F15
Mishandling of billing issues by the business office greatly impacted MCDH’s overall cash flow position.
Related Recommendations (1)
R2
the BOD assure that financial controls implemented by the new management team continue. Both BOD and new senior management pursue all options for increasing revenues while putting cost controls in place, to increase cash flow. Comments The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.
F16
MCDH conversion to a new computerized accounting and billing system program is complete and operational. The system has made reports and billings more timely and accurate.
No recommendations for this finding
F17
Patient billings (Accounts Receivables) now take approximately 44 days to receive payment, which is within Healthcare industry standards. Prior to the recent changes in management, the length of time to receive payment took as long as 60-90 days.
No recommendations for this finding
F18
The hospital generally pays outstanding invoices and obligations (Accounts Payables) in approximately 90-120 days. Healthcare industry standard is 45-60 days.
No recommendations for this finding
F19
MCDH currently owes between $4-4.3 million. MCHD projects that it may take a number of years to bring its Accounts Payables in line with industry standards.
No recommendations for this finding
F20
The most recent independent audit indicates a loss of over $5 million for fiscal year 2005/2006.
No recommendations for this finding
F21
The audit found that many 2005/2006 interim financial reports were misrepresented to the BOD. The reason is not readily evident.
Related Recommendations (1)
R1
the BOD together with the CEO continue to perform their duties in a totally transparent manner. They must take a strong positive leadership role and exercise diligent oversight for all decisions regarding the future operations of MCDH.
F22
Accounts Receivables was often overstated. When this money was not received, cash flow was greatly impacted and MCDH was unable to pay its bills on time.
Related Recommendations (1)
R2
the BOD assure that financial controls implemented by the new management team continue. Both BOD and new senior management pursue all options for increasing revenues while putting cost controls in place, to increase cash flow. Comments The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.
F23
The audit made a note about a “going concern of uncertainty”. This uncertainty indicates a red light regarding the recent considerable operating losses and a need to increase revenues, put cost controls in place, and increase cash flow through better management of revenue.
Related Recommendations (2)
R1
the BOD together with the CEO continue to perform their duties in a totally transparent manner. They must take a strong positive leadership role and exercise diligent oversight for all decisions regarding the future operations of MCDH.
R2
the BOD assure that financial controls implemented by the new management team continue. Both BOD and new senior management pursue all options for increasing revenues while putting cost controls in place, to increase cash flow. Comments The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.
F24
In addition to the annual audit, the BOD now requires a quarterly review by an independent C.P.A.
No recommendations for this finding
F25
There is no apparent evidence of any malfeasance on the part of any previous senior administrators.
No recommendations for this finding
F26
The MCDH CEO sets the tone and style of empowerment and accountability for hospital operations.
No recommendations for this finding
F27
The previous administration and the BOD had different visions regarding the future direction for MCDH. The CEO and CFO envisioned growing hospital services and maintaining the 49-bed license.
No recommendations for this finding
F28
The BOD has the authority to approve the budget, external contracts, and staff appointments with guidance and recommendations from the CEO.
No recommendations for this finding
F29
In the interest of providing a higher level of transparency, the BOD reorganized committee structure from >Committees of the Whole=, i.e. BOD members only, to ones with broader community members’ involvement.
No recommendations for this finding
F30
MCDH is currently pursuing options to increase revenues, initiate cost controls, and increase cash flow through better management of revenue cycle functions.
No recommendations for this finding
F31
MCDH plans to acquire the Mendocino Medical Associates Rural Health Clinic License to create a MCDH Hospital-Based Rural Health Clinic (RHC).
No recommendations for this finding
F32
Operation of a Hospital-Based RHC in connection with CAH status is projected to result in higher reimbursements for both patient treatment and physicians’ compensation.
No recommendations for this finding
F33
The Hospital-Based RHC will provide a new revenue stream, with containment and reduction of associated management costs.
No recommendations for this finding
F34
MCDH projects a breakeven operation within five years with the implementation of the new management, tighter financial controls, CAH status and the RHC.
No recommendations for this finding
F35
MCHF is embarking on a community-wide capital fund raising campaign.
No recommendations for this finding
Comments 1
-
CO1The financial stability of MCDH has been seriously impacted by the closures of the Georgia Pacific Mill, reduction in the fishing and logging industry on the Coast, and combined with reductions in various reimbursement rates. This, together with apparent internal management problems, had left MCDH on the door of bankruptcy. It appears the BOD relied too heavily on the opinions of the previous CEO in their policy decisions. The previous CEO had a different vision for the future of MCDH, regardless of whether holding that position might ultimately negatively affect MCDH=s bottom line. MCDH had to look at other alternatives for solving the serious financial problems after the failure of the parcel tax measure. The citizens of Fort Bragg and the north Mendocino Coast could face the loss of this vital health care delivery system if the financial situation did not materially improve. The BOD removed previous senior management and retained a new CEO and CFO. The new administration has a positive vision on how to solve the financial issues and continue operation of this important community asset. The turn around has begun as their vision and programs are put in place. MCDH is by far not out of the woods; it will take a number of years to fully realize a breakeven, if not a profitable, position. The community itself is equally an important player in maintaining the financial stability of MCDH. MCDH is highly regarded for its medical care and delivery. However, all the adverse discussions concerning its financial condition have tainted community respect and opinion. This respect must be re-earned. It is important that MCDH BOD, management, and staff operate with total transparency and include the community at every level of decision-making processes. Conversely, the community as a whole must fully and completely support MCDH by using them for their healthcare needs as opposed to going out of the area. Together, they are interdependent on one another to sustain and promote this necessary vital healthcare asset for Fort Bragg and the north Mendocino Coast.