In the news: Monterey County Weekly “Get the Torches”

July 7th, 2011

Find the leak, says SVMH. Everyone else: stop wasting cash.

By Mary Duan, Thursday, July 7, 2011
Monterey County Weekly

The hourly rate for a competent private investigator in Monterey County – the kind of guy a company might hire to run background checks – is about $125 an hour. The average hourly rate for a competent private investigator in Silicon Valley or the Bay Area – the kind of guy to investigate industrial espionage – is about $300 an hour.

Let’s split the difference. Let’s say that the board of Salinas Valley Memorial Hospital finds one who charges somewhere in the middle and has the wherewithal to ferret out exactly who leaked the super-secret contents of the super-secret 132-page report by the international consultancy McKinsey & Co. (you know, the report that cost the hospital about $930,000 and someone handed over to the Salinas newspaper) that says the community hospital needs to quickly position itself to make it a prettier merger or acquisition target. Or face death.

Say the investigation takes a minimum two weeks of full-time work. Round it out for administrative support for the investigator, mileage, etc., and that gets the cost to about $25,000.

For that much money, the hospital could have kept a licensed vocational nurse like Nelda Testa employed for another six months. Skip the $930,000 report altogether and they could have kept all of the 21 LVNs they laid off last month employed for the next few years.

Instead, the 73-year-old Testa, who spent 44 years and 73,000 hours of her life as an LVN at Memorial, finds herself unemployed. And she says if people think patient care isn’t suffering as a result of the layoffs, they should think again. She says a group of more expensive registered nurses worked upwards of 90 hours each last week, in part because they are taking on tasks once performed by LVNs. Figure the math on that.

“The patient load has become overwhelming. Patients aren’t getting bathed, linens aren’t being changed every day,” Testa says. “People are scared and overworked. Nobody will want to merge with Memorial in the climate they have now. It’s really bad business.”

Lowell Johnson probably wouldn’t disagree with Testa on the climate, although I don’t know if the two have ever met. Johnson is Memorial’s interim CEO, hired by the board in April at a cost of $10,000 a week to stabilize operations following the sudden departure (was he fired or did he resign. nobody knows) of long-time chief executive Sam Downing. Johnson’s been a hired hospital gun for the past 22 years – before that, he was a partner at Touche Ross before it merged with Deloitte. (Think very expensive consultants, a la McKinsey.)

Johnson attended a community meeting held by Councilman Steve McShane at Salinas City Hall on Tuesday night to discuss neighborhood parking and traffic issues. Johnson said of the 30 hospitals he’s temporarily run in the past 22 years, Memorial ranks as one of the three or four most contentious he’s seen. The hospital brought in $340 million in revenue last year, and spent $342 million. (They shoulda’ skipped the McKinsey report.) The budget for the next year, Lowell told a group of about a dozen neighbors, is $302 million.

“Anthem Blue Cross beat us into substantial discounts, and that cost us about $20 million, but we couldn’t take a chance on not getting the contract,” Johnson said. And the hospital is losing $10 million in MediCal subsidies as well.

Combine this with the fact the hospital had to meet seismic retrofit requirements by 2013 or face mandatory closure, and that as people lost jobs and health insurance they stopped seeking treatment, and it all combined to create a perfect storm of instability.

But there’s also this: “The organization had nothing but good times and Mr. Sam said yes to every request until 2009,” Johnson said, after the meeting. “And now the culture has to change… my goal is to be in good shape with the service workers by Labor Day.”

Sorry Lowell, but fat chance. On Tuesday, the labor union sent letters to state Attorney General Kamala Harris and county District Attorney Dean Flippo alleging the hospital board violated state law by holding closed-door meetings to discuss the McKinsey report.

Hospital board member Jim Gattis has been quoted as saying if the leak is traced back to an employee, that employee will be fired. If it’s traced back to a fellow board member, it will be referred to the county Grand Jury.

Here’s the thing. That secret report wasn’t all that secret. Testa said almost every worker knew the McKinsey consultants were on scene. As for who turned over the actual document, I’ve heard from another former employee that documents one would think should remain confidential were often left laying around conference rooms.

The board thus far has declined to say how much it will spend on this witch hunt, but based on Lowell Johnson’s description of the hospital’s finances, they don’t have a dime to spare.