KVHD CFO Chet Beedle says Sycamore Asset Mgt. ran up costs in SNF

I remember when my 93 year-old grandfather had a problem with his water heater, or as he called it, raised in Brooklyn, the “burler” (boiler).
He called and left messages with me, but didn’t realize I was out of town.
So, he let the problem go all week until the weekend came and he had to call somebody.

He saw an ad on TV and out came a certain plumbing company on a Sunday with an elderly gentleman all alone.

When I got home Grampa chewed me out for, I guess, going out of town. I went to his house and found the water heater changed out and a bill for $1700.

The average price to install a water heater outside in a closet, was about $500. On a Sunday, maybe $700. (Which is what I sent the company after I stopped payment on my Grampa’s check.)

But two things occurred that day, the first was that there was an emergency situation that could have been caught during the week before it escalated which caused him to have to make a hasty decision.

The second part was the lack of checking out who was being hired to do the job and the price. Grampa accepted the price and just told them to do the job.

But my Grampa was an average guy, not a CEO, CNO, CFO or a specially equipped with ultimate knowledge, KVHD board member.

There is certainly correlation between this story and the situation which took place at the hospital.

When the skilled nursing facility sprung a leak in 2006,(Yes, let’s just continue with the plumbing analogy) many people knew about it. Employees told administration and the board of directors.

With an old, out of date, plumbing system that had been passed by the department of health services and CMS for years without proper direction and education, the nursing facility was flooding.

The CEO and top officials simply shut the doors trying to keep the deluge back.

When the water eventually spilled out, with employees caught in the current, the hospital administration and board began blaming everyone but themselves. (just like my Grampa)

Eventually, with the hospital SNF on the verge of being closed, it was now an emergency. The whole hospital falls if the SNF goes down.

So, what did these bright, credentialed, professionals do different than the ancient patriarch of my family?

Nothing.

They let the problems go just like he did. And made a very hasty decision because of it.

Who you gonna call?

KVHD didn’t have to call anybody, the bat signal went up in the Bakerfield Californian newspaper that the hospital SNF would be closing, they were again in Immediate jeopardy. And that's all it took to attract the ants to the picnic.

Enter the new management company lauded with praise by former CEO ya later, Pam Ott; The saviors of KVHD, "Sycamore Asset Management."

The price? Why they would pay any price at that point to keep the water heater or I mean SNF running. And the management company knew this.

Even more importantly, this management company knew they would make money by helping the SNF or they would still make money by closing it (maybe even more). Yes, the company will help come in and close down a facility too.

From the contract: “ B,2,(c)…KVHD further understands and acknowledges that, in the event the SNF unit of KVHD be placed into temporary management or receivership by DHS services or CMS, Sycamore and/or its officers, directors, agents, employees and attorneys may be requested to either serve in such capacity or assist in carrying out the functions.”

Now, let us take a look at the baseline charges this company, who are long since gone, probably out enjoying the million plus bucks they made in a matter of months, during 2007.
(Gosh, my Grampa is looking smarter to me right now.)

Hourly rates:
Sycamore $245 per hour (reduced from $285)
Pharmacy consultant $100 per hour reduced from $245
RN’s, RD’s, Social, work staff $100 per hour
Staff nurses $85 per hour
LVN $50 per hour
Medical Records $50 per hour
Administrative assistants $40 per hour
Legal counsel $425 per hour

Costs: KVHD shall reimburse Sycamore and its representatives for costs expended in carrying out the obligations under this agreement, including but not limited to, food, lodging, travel and such other expenses as may be reasonably incurred.

Now I’ve seen many of the hospital financial projections done by the CFO; what exactly did he project here? And why when he read off the traveling nursing figures at the last board meeting did he blame Sycamore Mgt.? He could see where the numbers were leading.

But time had been wasted and I imagine we will hear the same excuse again, they had no other choice. And whose fault is that?

This agreement was signed by Pam Ott and Bradley Armstrong in May 2007.
(Ironically enough, Mr. Armstrong still sits on the board, but has become quite a penny pincher. I guess after you sign off all of the hospitals money, you don’t have much left to spend. So, watch out community I estimate they will try to borrow from us soon in the form of a general obligation bond. It will be either the seismic issue or to keep the hospital running. Or they will try to make the cuts in the hospital that have always lead to good things, like short staffing and improper systems of care. What dazzling ideas will we see next?)

More to follow…