Lessons in Skepticism

There might be a significant plot twist coming in the tale of the seemingly impending affiliation of the coast hospital with Adventist Health. Or it might just be a tease to get you to read beyond the autobiographical meanderings. 

I sometimes tell people I was born with a skeptical spoon in my mouth or with skeptical antennae attached. Clearly that was not literally the case. Perhaps because I entered the world of the Macdonald ranch as the youngest child, and youngest by a significant number of years, as soon as I could hook together words into fully formed thoughts and sentences, my mother spoke to and with me as if I were a fellow polysyllabic-spewing adult. As her only daytime companion on many weekdays I received some of the spoilage that often is bestowed on the youngest child as well as an inside look into the college student, whip smart, intellectual my mother had been when she married my father. Little did I know at the time, but my mother had already formulated a plan to return to the University of California at Berkeley when I reached school age. I suppose she prepped and honed her collegiate verbal skills on me while she was baking pies for the county fair or performing the everyday chores of a ranch housewife. She had been at UC Berkeley as an undergrad before she met my father and one particular story she told of that experience stuck like glue to my preschool, late 1950s, mind. 

She entered UC in the late 1930s. Her first class was something akin to Sociology 101. It met in an auditorium-sized classroom with at least a hundred other students. Upon entering, each student was greeted by a teaching assistant with a clipboard. The clip on the board concealed a smattering of words typed on a sheet of paper. Below the clip, the paper was filled with blank lines. Some of these were already filled with the signatures of other students. My mother was handed such a clipboard and instructed by a teaching assistant that every student had to sign in. She dutifully complied and found a seat. When the professor strolled up to a podium to officially start the class the teaching assistants handed over their clipboards. The professor loosened the clip and read the words that had been largely concealed underneath: “We, the undersigned, proclaim our allegiance to the Communist Party.”

All but one or two of the seated throng had obediently signed. This was my mother's lesson to me in healthy skepticism. Elmer Fudd might have said, “Be vewy, vewy wary.” Of course, Elmer couldn't have pronounced the 'w' in wary either, but such are the vagaries of writing.

Skepticism, when it comes to researching or writing about the Mendocino Coast Healthcare District is a healthy attribute to have inherited. Yes, I get it, 'healthy' and 'healthcare.' Perhaps too close together. No pun intended, but there it is.

My skepticism doesn't always end up on the written page. During the run-up to the 2018 election of four new hospital board members, I experienced a dose of skepticism about candidates Karen Arnold and Jessica Grinberg having too many ties to Mendocino Coast Clinics, in Arnold's case, and as an independent contractor who does some business with the hospital, in Grinberg's case. 

In the first month of 2019, the MCDH Board of Directors, with four new members, voted three to one, with one abstention, to release chief executive officer (CEO) Bob Edwards from his duties. The one board member who abstained was Jessica Grinberg. As far as I know that abstention has never been publicly explained. I have heard multiple reasons or even rumors about the reason for that abstention. This is the kind of place where skepticism gets tricky. In order to protect sourcing I have chosen not to reveal any of the reasons or rumors I've heard about that particular vote. 

In the long run it is sometimes better not to reveal everything one knows. Speculating on Grinberg's vote in the short run might have seemed a minor reportorial coup. Waiting to see how she performed on the hospital board in the bigger picture appears to be more telling. As 2019 unfolded Ms. Grinberg proved to be the MCDH board member most likely to initiate innovative projects to benefit the hospital and its clientele. Some of this work was done behind the scenes and some as she chaired the hospital's planning committee. She has also been the only member of the board of directors to openly refuse to accept the failing financial figures. Along with some hard questioning of why next to nothing had been done to reduce losses, she voted, “No,” on the financial report month after month. This is a simple enough act, but no other director demonstrated the fiscal or fiduciary responsibility to do the same, to in effect say 'enough is enough,' we must stop this waste.

Get your plot twist and perhaps your skeptical hankies ready. At the conclusion of Ms. Grinberg's latest chairing of a planning committee meeting on December 30, 2019, John Allison, a long time member of that body read a statement that began, “As the financial condition of MCDH continues to deteriorate, affiliation with Adventist Health is the only viable option for saving our hospital and maintaining a broad survey of quality health care services on the Mendocino Coast. Yet affiliation may very well be in jeopardy.”

The gist of Allison's next few paragraphs includes a friend of his who was at the Ukiah Adventist hospital recently, where some of the staff claimed they hadn't been fully briefed on the affiliation with the coast facility because the affiliation had not yet been approved at the corporate level, located in Roseville, CA. Mr. Allison cited the difference between the original term sheet offered by AH, which provided for an annual lease payment of $1.5 million for thirty years. In November, 2019, what appeared to be some form of negotiation brought about a revised term sheet that promised $1.75 million payments from AH for the first couple years of the lease and nearly $3 million annually thereafter.

Under a theory that the corporate level Adventist Health board only meets quarterly, with their next meeting occurring in mid January, making the previous meeting at a similar point in October, well before those November negotiations, Mr. Allison went on to say, “I have seen nothing to indicate that the revised term sheet with the higher annual lease payments has been approved by the Adventist corporate board. The community has the right to know, now, whether Adventist Health has given its final approval to the revised term sheet.” 

The implication being that if whomsoever negotiated for AH on a Mendocino County basis does not convince corporate, Roseville, AH to approve the nearly double annual lease payment then the whole affiliation matter could be derailed. At that point I put in queries with folks in the AH hierarchy, but due to the New Year's holidays definitive answers, as my mother liked to say, “were not yet forthcoming.”

As to the skeptical side of things: I have no reason to disbelieve Mr. Allison's friend's account of what they heard over the hill in Ukiah. John Allison presents statements to MCDH committees and to the hospital board regularly in what appears a clear and fairly meticulous manner. The mathematics of when the Roseville board meets seem to jibe with reality. In fact, more or less the entire scenario Allison laid out matched something told to me by someone else prior to Allison's Dec. 30th statement. The 'someone else' is a person I thoroughly trust.

And yet... my antennae are up because Mr. Allison essentially rested blame solely on MCDH Finance Committee chair John Redding for taking credit for the higher lease payment (the higher payment thus being the potential trip wire for corporate AH). Allison also blamed Redding for sponsoring a revised hospital budget that called for a net loss of $2.4 million for the fiscal year. Allison projected that the losses during the first three months of said budget would lead to a $4.4 million net loss for the year.

Allison claimed that the net losses for MCDH in November would be worse than the $947,000 net loss in October. If he had just waited a day or two to see the actual numbers, Allison would have seen the November net loss totaled a bit less than $188,000, not a good thing, but far less than $947,000. Both the MCDH interim CEO and interim chief financial officer (CFO) have projected a nearly break even net loss/gain for December. On top of that, on January 2nd, MCDH received a check for a little over $605,000 from Mendocino County Adventist Health President Jason Wells as part of a Partnership Health Program (PHP). There's a Medicare Cost Report reimbursement check coming in February for at least $1.5 million. So things aren't quite as bleak as Mr. Allison may have anticipated.

Allison's theory stated, “[T]he recent trend of dramatic increases in the net loss from operations may very well lead Adventist Health to walk away from affiliation." In theory that would appear true. However, in addition to the November and December upticks in net operation dollars as well as earned windfalls like the PHP check or the upcoming Medicare reimbursement, coast hospital interim CEO Wayne Allen has begun to implement a “Financial Improvement Plan.” He has asserted this will initially trim $2.1 million in expenses by eliminating thirteen registry (temporary) and four management positions. The second half of Allen's plan would cut an additional $2.1 million with the closure of the labor and delivery (obstetrics – OB) department. That closure requires board of directors approval. A meeting on that subject could very well occur later in January.

Once I was able to get hold of Adventist Health officials after the New Year had been rung in, two of them confirmed the mid January corporate meeting, which extends over several days. One of them said that AH would not have agreed to the nearly $1.5 million bump in the second term sheet “had it put the partnership in jeopardy.” That AH official did state, “The revised term sheet takes away margin for error.”

I asked if AH might pull out of the affiliation if AH came into that affiliation in a deficit running at about $8 million dollars. The response was, “Absolutely. We can't dig out of an $8 million annual loss hole. No chance.”

That AH official presented a financial scenario that starts with the $3 million dollar annual lease cost to operate the coast hospital. Add to that deficit the fact that AH will not receive the million and a half dollars from the parcel tax. It stays with the Mendocino Coast Healthcare District. That puts AH in a $4.5 million dollar hole. Year to date losses are at $1,348,000 for the coast hospital. That puts the hole at about $5.9 million. Then subtract CEO Allen's “Financial Improvement Plan” cuts that purportedly cut a total of $4.2 million (with half coming from the yet to come board enacted closure of OB), and the loss is much more manageable. This would be particularly true if December's projected break even bottom line continues through the time Mendocino Coast Healthcare District voters cast their yea or nay ballots on affiliation during the first week in March.

Mr. Allison and Mr. Redding have conducted a more or less public feud around the financial state of the hospital throughout much of 2019. Though I tend to agree with Mr. Allison some of the time on these matters, I can't escape wondering whether or not his scenario concerning corporate AH isn't part of a wish fulfillment to see Mr. Redding embarrassed as much as it is a warning about the shaky economic ground upon which he has projected affiliation to be treading.

Lessons in skepticism: Read under the clip if there is writing on a clipboard, not all rumors are fit to be printed, and sometimes two sources aren't enough. I know I'm skipping what appears to be obvious, “always listen to your mother.” Well, if it was your mother who ingrained skepticism in you then how much can you trust her?!

In the meantime, I am glad that antennae exist only figuratively in our brains and that I don't have to make any adjustments climbing onto the rooftop in the wind and rain.

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