What there's more? Part two of KVHD Rocktoberfest!!!

"We're going to come together as a board," Dr. Robert Gross, DO, and first vice chair of the Kern Valley healthcare District board of directors, said regarding the passing of the motion to review the pharmacy financials before making a decision to close.

Measure twice, cut once

As was already reported, the KVHD board of directors denied a motion by board member, Bob Jamison, to begin wrapping up the business with the pharmacy, with a second motion being made by Dr. Gross to have the board carefully review the situation before closing the retail outlet.

Gross said the board needs to do some teamwork and make sure that this is the correct decision, as many questions were asked as how this will effect not only the community, but employees as well.

Jamison and Chairwoman, Kay Knight, exchanged their views regarding the decision.

"We've just had a very rough financial report for the district that says we're losing money. If you want to look at it on an emotional side, or belittle the messenger, keep in mind all you're probably doing is drawing out the inevitable and making matters worse," Jamison told Knight.

Jamison went on to say the pharmacy has been losing money for the last four years, and now with complaints and inability to service the customers properly, he said he sees no reason to delay.

"But it used to serve the public well," Knight replied.

She went on to say, "Our surgical services loses over a million dollars a year."

"We're not talking about surgical services we're talking about a pharmacy," Jamison retorted.

"We're talking about losing money and what we are going to do to prevent losing money," the chairwoman specified her concerns.

CEO, Tim McGlew, who, with help from Chet Beedle, (they're practically finishing each others sentences now) recommended to the board that the pharmacy be closed based partially on some interesting data obtained in an old consultant report.

"If we cannot do the service right than maybe we should not being doing this," McGlew explained. (Same logic would then apply to all other departments?)

"The bottom line is we've been losing money for the last, you know, four or five years, in the pharmacy, as Chet brought up last time, most of this came up as a result of the advent of Medicare Part D," McGlew reiterating what Chief Financial Officer, Chet Beedle, had been saying.

Beedle explained that the prices charged for medications were dropped down at that point, starting a cycle of losses for the pharmacy. (Well, I guess we will have a chance to look at this up close and find out if indeed that is the problem)

We need our pharmacy, says the Chairwoman

Not quite ready to give up on the Mt. Mesa Clinical Pharmacy, Knight reads off her reasons for wanting to hold off on closing the outlet.

Her concerns included the lack of availability of services on the "West Side Story" side of the lake, and employees who have put in years of work at the small facility.

(Yes, as I said in the Sept. Finance blog, there was an excuse given that the reason "The Drug Store," pharmacy in Kernville was able to remain profitable was due to the money people with power and influence living on that side of the lake. This was later disputed and laughed at by the owner of that pharmacy, who said it was just the opposite as all the medical providers are on this side.)

"I would hate to see our pharmacy close," she said was her opinion, "over the last few years the retail pharmacy has had very profitable months, I believe the allocated overhead expenses associated with the retail pharmacy are high."

She went on to say that the accounting system might be a place to start looking for answers."The losses we're experiencing are not from any mismanagement of the pharmacy or any wrongdoing within the pharmacy, but the losses as I see it are associated in the whole method of allotting overhead expenses from other departments to the retail pharmacy."

(I guess we can find that out now, as a team.)

Knight told the audience that the money to pay the long term debt impacted the finances of the pharmacy. "To service that debt we had to scrape pennies from anywhere we could."

Beedle said earlier in the year the debt was going to be a problem, he warned us. Then, however, he retracted that at the first finance commit me meeting with our then brand spanking new CEO, Tim McGlew. He then shocked me by saying it was already paid and it wasn't a big deal.

At that meeting Beedle said rather offhandedly that the 1.1 million was paid without dipping into reserve account required by the insurer Cal Mtg. We found out later that 150K was taken from reserves to make the payment.

Beedle and I ended up in a heated exchange that day as I told him that he said this all on video. Again, he said that he didn't say that. (We're cutting the videos this week and will probably fill up our Youtube site with some really fun stuff.)

Now that Beedle is becoming more open about the financial problems, as he has projected a serious problem paying next year's August bond payment. He even intimated that we could potentially have to use our insurance to make the bond payments. Our insurance is Cal Mtg. and once we do that we may as well give them the rest of the hospital. (Well, they pretty much have it now)

Our CEO, has experience with Cal Mtg. as, if I remember correctly, his last employer had more than 115 million in loans insured by the OSHPD offspring. (Office of Statewide Healthcare Planning and Development: see blogs regarding Cal Mtg. and its relationship to OSHPD)

I'll be interested to get his views on the long term debt situation.

You can't just close it, there is a process

Robert Knight, continuing his service to the healthcare district, this time from a seat in the audience where he is seen at every meeting supporting his wife who is the chairwoman.

Knight raised his hand and made a comment.

"This is a district hospital and it is tax supported by people who live here and actually earn their living here, not somewhere else. And I believe there's a section of the law that requires that you cannot just lop off a department, there's a process you have to go through which includes, I believe three different months, weeks, public notices."

The CEO responded that Mr. Knight was "right," saying that this is his first job with a public healthcare district and he deferred to Knight's experience. He said he will confer with counsel as to the process.

Knight went on to say, "It won't hurt to look at these numbers, there's a lot of, when you look at Mr. Beedle's numbers, there's a lot of stuff in there that doesn't make a lot of sense."

The options

Keep the pharmacy open and lose money, Beedle's report suggests. Cut back on staff, keep a minimum inventory with mostly generic medications, move skilled nursing facility pharmacy services into hospital, hours remain same except for being closed an hour for lunch with only one pharmacist on duty.

(That just gave me the warm fuzzies, what's the second option?)

Set a date to close the pharmacy to the public. Inventory liquidated or moved into hospital pharmacy. Employees and covered board members can use the internal pharmacy.

Okay, what did you think of that analysis?

Even more impressive is the data used to create these two top notch options.

When I looked and saw "The Casey Report" being used as a tool for justifying these two skimpy scenarios, I knew instantly the board was correct to hold off any action on this issue so this could be properly analyzed.

What is the Casey report?

The Casey report was done in 2000 by a firm suggested by Cal Mtg who was getting really worried about the lack of funds provided on the debt, but even more so, about the talk of bankruptcy.

Casey made some strong claims in the report, but unfortunately some of the data was not completely accurate, which caused the KVHD board to dismiss it as a source of advice.

Though some suggestions contained in the report, I believe, but I'll have to recheck, led to the closing of the Kernville clinic along with a cardiac rehab type of business. (Gee, a cardiac rehab in a senior community, that couldn't make money, could it?)

I have this report, and since we are now using it as viable data, I'll go ahead and tell you why it was given to me.

Former CEO, and currently a defendant in our felony elder abuse case, Pam Ott, and Bob Jamison gave it to me to impugn Robert Knight as the cause of all the financial problems at the hospital.

There is a reference in the report that the CEO, Knight, needed to be fired.

But the consultant was never hired and there was some question as to the accuracy of the report itself. Now, suddenly it resurfaces and is being taken into account as to the decision with the pharmacy???

We have an obscure report which was a one time deal, as the former KVHD board members chose not to hire on this company. And yet, here it is, an outdated, antiquated, analysis being used, I guess seriously which is hard to believe, to make a decision on the pharmacy which services a good portion of the community. (I'll say no more and just keep rolling my eyes)

As we begin to make decisions as to the future of the hospital and its potential services, business opportunities, there is the specter of that debt which makes it tough to believe much can be done without addressing this issue.

Like I said, I made a proposal to Cal Mtg. back in February I think, and both chairwoman Kay Knight, and Assemblywoman Fuller, were interested in trying to negotiate with the pseudo government agency which is actually allowed to make a profit. (That is the problem, the state is not going to fight about a profitable endeavour such as Cal Mtg. But it's the way they have become profitable which I have addressed and will revisit.)

However, CFO Beedle, talked Mrs. Knight out of trying to cut a deal for some financial breathing room, and the whole effort was stopped short.

Now, at this recent meeting, Beedle announced we could actually be using the insurance if we can't pay.

What about the pharmacy employees? What about the customers?

Chief Clinical Officer, Cynthia Burciaga, addressed Chairwoman Knight's concerns about the employees at the pharmacy.

"Miss Chair, as far as the comment regarding losing employees or having them lay off employees in the retail pharmacy, our open position report is available on line as well as posted in other areas, and there are many positions in the hospital where we can absorb the employees," Burciaga told Knight.

"So you're going to take care of them," I asked her.

Burciaga said she didn't want to lose any of the "valuable" employees and that they could apply for other positions at the hospital or be cross trained into something else. She thanked them for their service as they have had to deal complaints from the public and uncertain hours.

"They've been so good about cutting back their hours to help out, but still maintaining their benefits," she said.

(I'm sure if others a little higher up would pitch in their hours or cut some of their money, it would help much more than taking it from the little guys. You just don't hear the top administrators talking about taking cuts or even cutting their hours at this hospital. How about a furlough program?)

How to pump up the volume

Marge Swendleson, who could be called a community advocate, stood up and addressed the issue of insurance companies sending patients down to Bakersfield or elsewhere when they can have the same services available here.

She said a phone call to the HMO or insurance company by the patient explaining that the services are available close to home can get results.
"They can have the procedure done here and it takes is a phone call because I've experienced it and had nothing but good results."

McGlew agreed with her, but said that the hospital can't do that for the patients.

He explained, the hospital has contracts with these organizations, but they just refuse to let the district do the volume here.
"It's gotten to the point now that just a simple chest x-ray, they will require them to go to Bakersfield to get that. Clearly, the time down and back is exorbitant for a simple procedure like that."

Swendleson said people just need to make a stand, make phone calls, write letters and things can change. She said she wrote a letter to some editor about it.

McGlew said he has contacted the department of managed care to review the situation as well as sending requests for help from two other state agencies.

The CEO said its a difficult situation, "but we will rattle some swords."


Dr. Gross responded, "it shouldn't end with the letter to the newspaper, which I think is a really good idea, but there's a law on the books that basically states that these insurance companies have to provide all services within thirty miles from where they are insuring you at. So, I suggest you write a letter to your representatives as well...letters like that help, they can help an awful lot."

Is this story over with yet? No.

McGlew reported that he attended the annual California Hospital Association meeting recently and that some good news came out of the event.

"The primary purpose of that was to begin putting the network together of the critical access hospitals throughout the state of California."

He said getting this group of similar small districts together will help as far as advocating for the special needs of these critical access hospitals.

As McGlew has talked about getting more specialists up here to create more services and more volume, he said he found out at the CHA meeting, that the telecommunications or telemedicine, will be available soon by way of money from a stimulis package.

"They announced at the meeting that they had already proceeded with the purchase of that equipment for every one of the hospitals. So, that will be coming shortly, that was very good news."

McGlew also made mention of the fact that all the CEO's in the new network, have no retail pharmacies. So, we are all alone in this?

Where's my flu shot?

I guess we're all asking how we can get flu shots this year as the hospital has not recieved it's shipment as of yet. And the only shipment they are expecting will cover patients, staff, and residents of the nursing center.

What happened to the drive by flu shot clinic? I don't know, but I will find out. I need to speak to Public health and find out what has happened.

It's only speculation, but could there have been a problem paying for these vaccinations? Let's find out together.

I need a flu shot, but I will wait until I know our elderly residents and children are taken care of first. And if I or anyone else have to go to Bakersfield to get a flu shot, then we have sunk to our nadir of service.

Odds and then the end...

In his CEO report, McGlew said that they will be going to all the department heads and do a departmental review. Beedle said they haven't done that, but they always kept in touch via reports and records.

Out of the blue, McGlew mentioned a skilled nursing facility policy which prohibits hiring anyone convicted of elder abuse or neglect type issues. He said it is only a SNF policy now, but would like to see it district wide.

Second vice chair, Brad Armstrong, who has been on the board for more than 20 years, through many a disaster including the construction project and the SNF elder abuse disaster, voted with the other three board members to take a look at the pharmacy one more time.

"I most certainly don't want to make the wrong decision." And I concur.

Two new Obgyn's will be arriving in the valley at the end of October as part of the push for specialists.

And "The Drug Store," in Kernville should be keeping a close watch on the pharmacy situation here as it will impact there business as well: they're going to be making some good money if our pharmacy goes down. And they can even expand their delivery business to make it a convenience.

It was the night before KVHD and all through the house, not a creature was stirring, but only this louse: Sierra Kings in bankruptcy?

But Pam doesn't believe in bankruptcy...how could this be?
The irony, I hope,will not be lost on anyone here in the KRV, that Sierra Kings District board of directors voted today to file bankruptcy, a chapter nine, municipal bankruptcy of a public healthcare district.

For those who are new to this blog, Sierra Kings District, is the, or will it be "was the", home of the criminally charged, Kern Valley Healthcare District, former CEO, Pamela Ott.

Ott who is charged with eight counts of elder abuse stemming from her time with KVHD, is currently on unpaid leave with the district, until the November preliminary hearings scheduled at the Kern County Superior Court.

Last month, September, Ott plead "not guilty whatsoever" to the elder abuse charges and was released on her on recognizance, pending the hearings, but with the provision that she not work in a skilled nursing facility. (I'm thinking maybe living in one might be the lesson)

After reading the article published on the web, by the Sierra Kings' local newspaper, "The Reedley Exponent," regarding the last month's board meeting, the new CEO and CFO, spoke of converting hospital beds into swing beds which could be used for skilled nursing.

I wonder how that plan, if it ever gets underway, as Sierra Kings voted on going with bankruptcy to solve their financial woes, will combine with Ott's employment and court orders?

What happened at Sierra Kings, other than the obvious?

Oh, the news of the Sierra Kings bankruptcy, which is scheduled to be filed tomorrow, according, to interim CEO, Sandy Haskins, reeks of timing I must say.

One month after Ott is talking innocence with a Kern County judge, her hospital, the one again in her care, under her leadership, is said to appear to be a "sinking ship" in the local Reedley newspaper.

But bankruptcy is a word I think all of us, and I mean all of us, (yes, I see you), will never forget as being the word that Ott used constantly here in the KRV: but not as a solution, rather an attack on people who would utter such a contemptible idea.

Now, Sierra Kings, Ott's latest adventure, will likely be saved from total annihilation by doing this.

In the same article from the Exponent, the latest word had been a gasping "plan" devised by the firm HFS Consultants, who have been working with the hospital for a year and supplied both the interim CEO, Haskins, and Chief Financial officer, Teresa Jacques. http://www.reedleyexponent.com/

Losing both CEO, Ott, to criminal charges, and CFO, Barbara Jennings, to some not really specific complaints, (she didn't do her job is basically what they are saying), Sierra Kings has filled it shoes with the resources of this consulting firm HFS.

You can find HFS off the website for the Association of California Healthcare Districts, ACHD. http://www.achd.org/

ACHD is a power player in the healthcare industry, and considering HFS is on the front page of their website, I'm assuming this company must be in the big league too.

Last week there was the unveiling at the SKDH board meeting of the three million dollar plan, hatched by HFS, which would be a complex, (and I'm sure costly), look at accounts recievable and billing issues. They were hoping to cull through lost monies and shore up the billing department.

But now it's bankruptcy. What a week it must have been in Reedley.

Although Haskins said, "We'd prefer not to have to do this," he elaborated on the fact that the hospital is cash poor and accounts recievable are out over 100 days.

He said, the board of directors has made the choice to go forward with the Chapter 9, and they "hope it will improve the situation."

This will be the story to follow at Sierra Kings, but the truth is that the problems here at KVHD may lead us to the same conclusions we came to ten years ago in 1999 when a CEO was fired for even mentioning the idea: Bankruptcy.

Pam Ott totally disagrees with bankruptcy. Where is she anyway?

Now, without it's CEO, Pam Ott, Sierra Kings faces a huge challenge to remain on the healthcare map as bankruptcy is both costly and risky.

HFS has apparently taken the helm for this round at Sierra Kings, but where's Pam Ott in all of this?

Ott, who in my opinion, considering the circumstances at Sierra Kings, and the criminal charges, will be moving her base of operation somewhere else in the near future. But then again, she has gotten awards from ACHD and worked with HFS, so she's in with some big guns which could protect her if they were so inclined.

Oh, but what a legacy (or scarring, whatever you want to call it) she left our respective healthcare districts.

KVHD, now known for its elder abuse, collusion, criminal negligence, retributive firings, obstruction of investigators, short staffing, and some really colorful scapegoating, has a cousin in Reedley, Sierra Kings.

They are now known for their own construction projects gone awry, a CEO charged with elder abuse, a suspicious termination of the finance officer, no money and now bankruptcy. (I'm sure there are other things I missed)

Bankruptcy is taboo

So, to tell this story I must go back to the fact that while Ott was with KVHD the legend goes that Mr. Robert Knight, CEO, wanted to bankrupt the district to shake off that mountain of debt brought about by mismanagement of a construction project some years earlier.

This lead to Ott and her gang just twisting it and spinning it, that Robert Knight, was a "threat to the healthcare district" as he wanted to bankrupt and get out of debt.

Well Knight, as CEO in 1999, and I will show you this paperwork someday, did have an attorney look into bankruptcy. It is a detailed report on the situation of the debt load they were trying to carry, and how a bankruptcy could save or renew the district.

Enter the bad guys, the antagonist, Cal Mtg.

I'm sure it wasn't the day after the bankruptcy report was made, but certainly shortly thereafter, our friends from the state agency who insured the 22 million in revenue bonds, Cal Mtg. came pounding on the door.

No way were they going to let us bankrupt without a fight. We, or the board of directors at the time, signed our district away on the construction project which brought us half a SNF and an inoperable OR.

But guess who ended up as the bad guy? Robert Knight because of his suggestion of bankruptcy. Not Brad Armstrong who still sits asleep at the board. Not the people in OSHPD who approved the building plans. Not the CEO of the time nor the board of the time.

Here's the funny part: Knight was not even at KVHD when the real damage was done with the revenue bonds. He was hired on after the disaster, expected to run a company with a huge debt load, yet, still blamed. Interesting how that worked.

(But you don't bankrupt on Cal Mtg.)I asked the interim CEO, Haskins, if Sierra Kings had any debt insured by Cal Mtg. and he reported that they did not.

Of course not, or they wouldn't even be considering Bankruptcy.

Cal Mtg. has the claws in its contracts set up so that, sure you can bankrupt, its legal, but we will take everything.

If you're interested, the state plan 2007, for Cal Mtg. is like a Stephen King novel in its descriptions of what happened to those who couldn't pay. My favorite story from the state plan involves some poor healthcare provider who couldn't pay. Rather than telling the state, they knew what was going to happen, so they just walked away and didn't even call.

Cal Mtg. actually went physically to the site to find that they were gone.

I think every healthcare provider out there should read that state plan before embarking on the Cal Mtg. deal.

Ott ramping up the propoganda: she used the blame game

Ott came to KVHD by way of the management company, BRIM, and CEO appointed, David Green (See: tracking down the troubles).

She started as Chief Nursing Officer in 2002 and was then neatly packaged as the new CEO by 2003. Dave Green basically handed her the keys to the family car and didn't check her license.

Well, Mr. Knight, won a seat on the board of directors, and he was not going away. (sound familiar) He was not going to be scapegoated without a fight, unlike others who have been taken down at KVHD.

That scrapper Knight, and then CEO, Ott, had some real problems. Where as Knight likes to tell it like it is, Ott's verbiage robotically and repeatedly contained the word "wonderful" or the Knight's did it.

Ott and the gang also accused Knight of not playing with the team about the seismic construction issues which included the Measure M general obligation bond for 12.5 million.

Knight had actually had a bid to do the retrofitting required by the state to keep the hospital in business and safe from earthquakes. (Though they would take us down in a New York minute if we didn't pay the Cal Mtg. debt payments. I guess this makes sense to somebody, only a politician I would think.)

But the Knights, who chose to fight and even run and serve on the board, (Currently, Mrs. Kathryn Knight is our chairwoman, which would have disturbed Miss Ott to no end, as you will see in the email below) have been telling the story of the hospital, it's relationship with Cal Mtg., the financial problems, and finally, we didn't listen when they tried to tell us about the nursing facility.

Why didn't anyone in this community listen?

There's a certain amount of dissappointment on my part as far as this community's ability to understand a problem and deal with it. Gossip, judgment, and ego have played a bigger role than fairness, understanding, and compassion which always seems to take a back seat to the baser preoccupations of people.

The "smallness" of this community makes the situation more pronounced, such as attacking people who are trying to help. Like the Knights.

I tell you if there are people to respect and appreciate it is the Knights. They have a lot of heart and have hung in there when being called many unrepeatable and factually untrue things. In fact, Pam Ott, made her career here on the backs of the gossip about the Knights.

So, I'll end this for the night, and take up after the KVHD board meeting tomorrow.

I'll leave you with the immortal words of Ott from an email in 2006: (by the way those are her typos not mine. And the first reference is to the election of Kathryn Knight to the board while losing the precious Measure M.)

Ok, I finnally finished listening to the load of cow excrement. I want you to know that I got up at 5am this morning in order to accomplish this arduous task (tee, hee). I can't believe that we are all going to have to listen to that squeely little voice for the next 4 years. What is God's plan, I would like to know!!!!!!!!!!! Here are my thoughts:

1. Bob openly admitted that his grand plan continues to be to bankrupt the district. The staff are being used as a ploy in his adventure. He is well aware of our fragile economic situation and that simply increasing salaries and increasing staff will do exactly that. It is not about his concern for staff because he is well aware that no one will have jobs if he is to succeed in his ploy. Here is where I stand on the subject, there will be no bankruptcy, but rather, Cal Mortgage will once again step in and demand that a management firm come to the rescue to turn around finances just as they did during Knight's last intentional attempt at bankruptcy.

2. Mr. Knight has made several attempts to convince me to turn around the District financial successes and move the district toward bankruptcy. He has stated to me that Cal Mortgage would have to forgive the $16 million debt. Because I refuse to comply with such a sinister plot and he knows that Chet Beedle will never comply with such a plan, he now wants to remove all management and replace the very staff who have not only turned the District around financially, but also have improved customer satisfaction and quality improvement . Mr. Knight has informed me on multiple occasions throughout this year that he has a plan to once again take over the management of the district and that , even though I am a good CEO, my ten year is up. He actually even told me that I should take a position in the probation department. (QUOTE ANYTHING THAT YOU WOULD LIKE).

3. It is clear that both Knights have been in attendance at all Board meetings, but have not had the ability to assimilate information provided to them about the Measure M issues. First of all, why does he discount the ability of three very bright Board members who clearly understood the issues at hand? The Board and Administration had discussion frequently at meetings related to why retrofit was not a possibility. first of all, the community spoke clearly both in written and telephone survey that the current Acute care building does not have the capacity to provided the services that citizens would like to see such as an improved emergency department, cardiology and chemotherapy. We have discussed at the Board meetings that spending the approximate $25,000 to have architects propose retrofit plans is $25,000 spend on a project that will not give the Board any information that will be used based upon the fact that the district would still have an antiquated (loved your word), over crowded facility that would not meet today's standards for providing quality acute care services.

4. The discussion that they talked about Phil Foster and Tehachapi: Yes, If we were to use the modular concept with Aspen Street Architects, we could move forward far more expediently with a building project. Problem: Mr. Knight has some incompressible vendetta against Aspen Street Architects and if we do not use the already OSHPD approved modular concept, we will waste at least another year working with a new architect, spend $100's of thousands more on plans and wait for the average 2 years for OSHPD approval of plans. Three Board members understood the value of working with the Rural Health Design Network, a group of 13 Critical Access Hospitals who received a federal grant in order to save all of that money in order to meet the seismic standards in a very cost effective way.

5. Mr. Knight stated that I had already submitted a plan to OSHPD for the building of a net acute care wing: The plan presented to OSHPD was submitted in the year 2000, and Mr. Knight posed the Motion to submit those plans. I was not working with the district at that time.

6. Mr. Knight stated that he had made it clear in "a couple Board Meetings" that he stated that he would go along with the Measure "M" only if the District were to consider "rectalfit". The reality is the Mr. Knight posed the motion for the resolution that clearly stated that Measure "M" would build a new acute care facility to improve emergency services, provide more privacy, and to add Cardiology and Oncology services.

7. I cannot speak to the Gross's Clinic project that Mr. Knight has discussed. Discussion would be a clear breach of executive order of the Board. I am shocked that Mr. Knight has exposed his wife, who is not yet a board member and the media on executive protected information (quote me!).

8. As for the discussion about me bullying and cursing at staff: No comment except to say that I hope that he can find nursing staff who are willing to purger themselves in court, because that is where this discussion is going.

That's what came up for me, but I am sure that you will think of other issues - just call me!

(How do you like the tip of the iceberg. More to follow...)