Article: Behind Palm Drive Hospital’s Closing Part II: The Shutdown Playbook

[Peacetown Jonathan]

Behind Palm Drive Hospital's Closing Part II: Wells Fargo Bank & the Shutdown Playbook

How A Bondholder-Friendly Shutdown Playbook Secretly Sunk Our Hospital

By Jonathan Greenberg
For WaccoBB.net
May 21, 2014

The decision last month by Palm Drive’s Board of Directors to reject the doctor-led Foundation Plan that would have kept the hospital open was the moment of truth in the contentious struggle to retain a life-saving emergency room open in West Sonoma County.

Unfortunately for Palm Drive Hospital and our community, truth was noticeably absent in the reasons given for rejecting the Foundation’s lifeline proposal. Instead, we were provided with misleading legal advice from the district’s $520 an hour bankruptcy attorney—(whose San Francisco law firm also represents, in other matters, Wells Fargo Bank). This advice, which can be seen in exclusive video footage below, appears to benefit Wells Fargo Bank, which is trustee for Palm Drive’s $22.9 million bond portfolio, at the expense of the hospital’s survival.

This advice, which led the board to incorrectly believe it had no choice but to reject the Foundation’s plan, seems to have been part of a secret public relations playbook. The top goals of this playbook were to “Position the hospital for a quick and easy closure,” and to “Protect the parcel tax income as the hospital closes and reemerges in its new, sustainable form/model.”

These goals were apparently determined by Palm Drive’s Board without a single public meeting, a potential violation of California’s Brown Act, which says that such decisions need to be debated openly, with public input.

Palm Drive’s Secret Shutdown Playbook

During my five week investigation into why our community’s beloved, famously caring rural hospital closed (and what will be needed to resurrect it), I became aware of consistently focused message points in the statements made by the hospital’s CEO and Board members, as well as in letters to local media, and a surprising editorial that appeared in the Sonoma West a few days after the hospital closed its emergency room for the first time more than 70 years.

26564In addition to being a professional investigative, financial and legal journalist, I am a messaging professional, having spent much of the last decade assisting public interest organizations with their messaging and strategies. So I have a keen awareness of professional messaging campaigns, and have been aware that the Palm Drive District Board and its spokespeople, were engaged in one. A Sonoma West editorial titled “Palm Drive Is Dead,” repeated all the core message points of this campaign two days after the hospital closed, on May 1. These were, essentially:

Palm Drive Hospital is dead and there is nothing that anyone can do to resurrect it. This is the new normal. Accept it and go quietly into its dark night.

Our community is in mourning and anger is natural, but we should not criticize or second guess the CEO or Board, because they’ve done the best they can.

The hospital has fallen victim to a national, inevitable trend toward consolidation of emergency services into larger, more efficient, and more competitive mega-hospitals.

The Foundation plan to keep the hospital open “offers no hope or solid business planning,” and is “full of denial…and tinged by current anger.”

Our community needs to “reimagine” the facility as a “medical hub” that does not provide emergency room service

It would be “wrong and foolish” to repeal the Palm drive parcel tax that was voted on in 2004 to support an emergency room and acute care facility.

Last night, my hunch was confirmed, more demonstrably than I could ever have imagined, when I received a copy of a secret public relations plan for Palm Drive Hospital.

https://www.waccobb.net/forums/waccobb/keep90days/2014-05-22_09-42-58.png
(Full document is attached at bottom of this article)The secret memo, from “Young & Company, titled, “Communications Strategy for Palm Drive Hospital,” is dated March 23, 2014 and is, mysteriously, marked, “Privileged and Confidential/Prepared at Request of Counsel.” It is signed by Palm Drive’s CEO, Tom Harlan, and Marcus Young, representing Young & Company.

Suspiciously, Young & Company, has no website, no phone listing, no business license and the address provided in the signed agreement is a P.O. Box. Even more suspicious, Marcus Young is listed on this website (https://www.gauger-associates.com/team/) as the number two man and Executive Vice President of a major San Francisco public relations firm called Gauger & Associates (https://www.gauger-associates.com/index.php), which lists (https://www.gauger-associates.com/clients/index.php), among its clients, Wells Fargo Bank. Because Young signed through this independent, unknown corporate identity (with a box number as an address), he avoided a waiver requirement—and this need to disclose Gauger’s representation of Wells Fargo to Palm Drive’s Board or CEO.

According to the secret communication’s plan for Palm Drive Hospital:

“The goals of the communications strategy will be to:

– Position the hospital for a quick and easy closure, including assisting with employee communications;

– Provide effective and proactive messaging regarding the closure, staffing
reductions, and lay the foundation for a bright future for Palm Drive;

– Protect the parcel tax income as the hospital closes and reemerges in its new, sustainable form/model”

The Plan to Kill Palm Drive Was Approved During Closed Meetings

One disturbing truth about this mysterious shutdown playbook is that it was created and agreed to by Palm Drive’s CEO, and, presumably, its elected Board of Directors, before there had been a single public hearing about closing the hospital.

For the Palm Drive District Board, a municipal government agency, to meet in private and decide on closing a hospital, and the emergency room that the District was created to provide, without a single public meeting, seems to violate California’s Brown Act. (The Brown Act says that decisions and deliberations made between more than two elected officials of a governing entity in California need to be made in public).

The first public meeting to announce the bankruptcy of Palm Drive Hospital and its imminent closure was on April 1. The public was given just 24 hours notice, yet more than 250 people crowded the first public meeting on this subject on April 1. Few, if any, of the emotional speakers present supported the closing.

Sebastopol’s police and fire chief soon warned about fatal outcomes if the emergency room closed, and pleaded with Board members to find a way to keep it open. Palm Drive’s doctors immediately began speaking with the Palm Drive Foundation about a plan to keep the hospital open.

Incredibly, Alvarez & Marshall (https://www.alvarezandmarsal.com/), the high-priced international consulting firm that Palm Drive Hospital spent tens of thousands of dollars of their depleted cash on, never interviewed the fire or police chiefs, nor did they speak to a single one of the dedicated, highly successful local doctors who managed health care at our renowned hospital. Instead, they looked at the numbers, their downward trends, and mounting payables, and decided that pulling out of a financial death spiral was impossible. They never considered requesting from the doctors, or the foundation, a different strategic model to save the hospital and keep the emergency room open.

In closed session, Alvarez’s analysts reported to the Palm Drive Board that failure was the only possible outcome. The Board’s job, they were advised, was to hire a bankruptcy attorney, a communications specialist, and another expensive out of town financial advisor specializing in hospital shutdowns (Nobody will answer my question about who recommended these shutdown specialists).

And, as part of the playbook, the District Board and management would make sure that the parcel taxes that Wells Fargo Bank received for the bond holders were not threatened by bad publicity, a public repeal effort by taxpayers not wanting to pay for a closed hospital, or, it would seem—any plan that would keep Palm Drive Hospital open.

The Public Meeting Sideshow

The Palm Drive District Board’s decision to close the hospital was made in secret, behind closed doors, before a single public meeting took place. “The District Board had already decided what their votes would be before they had that public meeting,” says John Dierke, a retired SFSU Professor and Dean, who attended three public meetings, and read the Foundation plan cover to cover. “Their review of the Foundation plan was one sided and biased. They were just entertaining the public.”

When I spoke to Sebastopol’s savvy Police Chief Jeff Weaver shortly before the hospital closing, he questioned why the public was not given more advance notice of the closing—and more time to respond to it. Indeed, state law stipulates that a hospital must give their community 90 days notice before shutting down its emergency room. But because of the purported suddenness with which the Board found itself destitute, they got special dispensation from the state to close in just 20 days.

How Protecting Wells Fargo’s Bond Holders Became the Board’s Top Priority

A more troubling problem with the secret communications plan to shutdown Palm Drive Hospital is its objective of “protecting the parcel tax as the hospital closes.” This goal does not seem to serve the public interest the way keeping a life-saving emergency room open does. But it clearly serves the interest of Wells Fargo Bank, as trustee of $22.9 million in hospital bonds.

That’s because protecting the parcel tax from voter recall eliminates the financial losses of operating a closed hospital (which the parcel tax was created to fund), while insuring that $3.7 million in annual parcel tax remains free to pay bondholders, fees to bond trustee Wells Fargo bank, and other creditors.

Young & Company’s shutdown playbook becomes even more suspicious when placed in the context of the misleading legal advice that Palm Drive’s bankruptcy attorney provided to the Board and CEO as a core rationale for rejecting the doctor-led Foundation plan to keep the emergency room open.

https://www.waccobb.net/forums/waccobb/keep90days/2014-05-22_15-31-43.png
Dan SmithDan Smith, the hard-edged, controversial philanthropist, businessman, and outspoken critic of Palm Drive Hospital’s Board and management, has spent nearly $2 million, and thousands of hours of volunteer time, to rescue the hospital from closing twice before. Smith has been a leader in the doctor-led Foundation plan to take over Palm Drive, and he has pledged $1.5 million to support it. Like the doctors I spoke to last month, Smith knew that re-opening a closed hospital would cost far more money than keeping it open. So he pleaded repeatedly with Palm Drive Board President Chris Dawson to allow the doctors group and foundation to take over the hospital operations. According to Smith, Dawson’s reply was always the same: “He said, I can’t do anything other than what my consultants tell me to do. I can’t go against their judgment. They’re the experts, and I’ve got to do that they tell me to do.”

I recently was given a video of the April 23 public meeting at which Dawson led Palm Drive’s District Board to vote to close the hospital, and reject the Foundation plan to keep it open. I carefully reviewed the segments of the video in which Palm Drive’s bankruptcy attorney Michael Sweet publicly advised members of the Board that their “role as a fiduciary” was, to earmark the tax revenues and payables due to the Hospital in order to pay its creditors.

The doctor-led Foundation plan proposed that, like now, some of the parcel tax revenue not due as bond payments, and a $1.2 million lump sum reimbursement payment due from Medi-Cal due in a few months, would be used to maintain the facility and support hospital operations like keeping the emergency room open. Attorney Sweet told the Board that because the Foundation's plan utilized apportion of the tax funds and receivables to sustain the emergency room, the plan needed to be rejected, and the hospital closed.

Michael Sweet stated:

“Those funds just aren't available to startup this new process.What falls on the shoulders…of the board, is your role as a fiduciary, and the knowledge that right now that money is available is the concern that the money could end up being squandered or spent on something that the return isn't clear and could leave us in a very complicated situation down the road if money was available today to pay the creditors and fund the plan and exit the bankruptcy, and that money is spent in a way that the court might conclude was done imprudently… I think that the board puts itself at risk as a fiduciary for doing that; it could create complications for us in the bankruptcy case going forward.”

The problem with Sweet’s legal advice to the Board is that in a proceeding concerning a municipal entity like a district hospital, a bankruptcy court specifically has no power to “conclude,” anything about how it spends its money performing its public function. In fact, Section 9 bankruptcy code, which Palm Drive’s case is covered under, emphatically stipulates that the bankruptcy court has no power whatsoever to interfere with, or judge, how that municipality uses its funding provide its essential service to the public (nothing is more essential than life saving emergency room services). That’s because Palm Drive’s creditors, of which bond trustee Wells Fargo Bank is by far the largest, cannot interfere with a government entity’s core function of providing services to the public.

According to the US Court’s own website describing Section 9 bankruptcies like Palm Drive’s, (read more on this here)
(https://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter9.aspx)
“Section 904 limits the power of the bankruptcy court to "interfere with – (1) any of the political or governmental powers of the debtor; (2) any of the property or revenues of the debtor; or (3) the debtor's use or enjoyment of any income-producing property" unless the debtor consents or the plan so provides. The provision makes it clear that the debtor's day-to-day activities are not subject to court approval.”

So the court would have no position about “squandering” money to keep Palm Drive’s emergency room open. Indeed, the very reason that Section 9 bankruptcy for government entities is different than Section 11 business bankruptcies is to make sure that the financing of government operations cannot be impacted by bankruptcy claims.

Below is a video of the April 23 meeting that contains the questions Sweet was answering, and his full responses.


https://www.youtube.com/watch?v=9GriEyudP5A

Dan Smith pulls no punches when describing attorney Sweet's intention. “He’s lying and he knows he’s lying. What he says is the opposite of what the law says. Who is driving this? I believe that Michael Sweet is working for Wells Fargo. His game plan, to the Board, is this: Let’s close the hospital, then preserve all of your cash so we can settle this bankruptcy proceeding quickly, and your bonds won’t be threatened. The PR firm will make sure the public keeps paying their taxes. Then you’d be sitting pretty without that sinkhole of a hospital. You own the building free and clear, you can rent it out, and you’ve got $2 million of tax revenue coming in. You’re in fat city.”

The problem with this shutdown playbook, Smith observes, is that West County’s $155 parcel tax was passed specifically to provide an emergency room and acute care facility, and the Palm Drive Hospital District was created for this clear purpose. “Sweet thinks we’re just a bunch of hicks here in Sebastopol,” Smith says. “That may be true—but we’re a bunch of hicks that read the law.”

Guess Which Mega-Bank Attorney Michael Sweet's Law Firm Represents?

Michael Sweet’s misleading advice seemed to be part of a shutdown playbook that benefits Palm Drive bond trustee Wells Fargo, at the expense of a public desperate to keep its emergency room open. When I dug deeper into Michael Sweet’s background, I learned that he works for a major San Francisco law firm called Fox Rothschild. A search for Wells Fargo on Fox Rothschild’s website revealed that the bank has been one of the firm’s most important clients, as readers can see here. (https://www.waccobb.net/forums/#https://www.foxrothschild.com/practiceareas/appellate/matters.html)

I called Michael Sweet last week to interview him about this apparent conflict of interest. When he returned my call, I started, “Thank you for returning my call. This (Palm Drive’s closing) is a big story here in Sebastopol.”

Sweet’s reply was immediate. “It’s only a big story to one person,” Sweet replied.

By this, Sweet meant District Board critic Dan Smith.

Given the suffering and anxiety the closing of Palm drive’s emergency room has been causing in West Sonoma County, Sweet’s callous response surprised me. Then, I realized, it was keeping with the messaging of the shutdown playbook, that our community would accept the economic inevitability of this “new normal,” of not having the emergency room that has saved hundreds of lives here in West County for more than 70 years.

When I asked about the conflict of interest for his firm, Fox Rothschild, to represent Palm Drive Hospital while its client list, on major other matters, included Palm Drive bond trustee Wells Fargo Bank, Sweet replied, “Waivers are in place. You’ve only gotten one side of the story.”

Although Michael Sweet initially said he would speak more with me later, he declined my two attempts at follow up interviews, in which I had hoped to learn who signed these conflict of interest waivers (which law firms require new clients to sign when they represent parties with potential conflicts). Was it just CEO Tom Harlan, or did the Board sign them? And why did CEO Harlan, or the Board, or Sweet himself, not disclose the waivers at the public meeting in which Sweet gave his professional advice to the Board and public?

I emailed two Board members to ask whether they had signed, or were aware of this conflict of interest waiver. Nancy Dobbs replied, “I do not recall being informed about a Wells Fargo connection but then, we were all focused so intently on finding a solution rather than closure, that I may well not recall being so informed.”

How Palm Drive Stayed Open During its Last Bankruptcy

In assessing the question of whose interest was being served by Michael Sweet’s pointed legal advice to the Palm Drive Board, I find it instructive to contrast Sweet’s advice, and the planned shutdown playbook, with what happened the last time Palm Drive’s finances forced it to declare bankruptcy, in 2007.

To that end, I spent an hour on a Saturday morning interviewing David Heaslett, the small town attorney who brought Palm Drive Hospital through its bankruptcy, and through a three year process, until 2010, when the hospital was able to pay its creditors 50¢ on the dollar, plus show a $2 million profit.


https://img838.imageshack.us/img838/3797/np8g.png
Michael Sweet and David Heaslett


Heaslett is an independent, small town attorney (https://heaslettlaw.com/) with extensive experience helping at least seven rural hospitals survive bankruptcy. In each case, he has helped them focus on keeping their emergency rooms open, and in most cases, he has succeeded. Heaslett explained what happened in 2007. “First thing I did was secure the bond trustees (at that time it was Bank of New York Mellon, not the current trustee, Wells Fargo), to make sure they would not foreclose. Then I worked on a plan.”

The plan, by an attorney whose firm never represented the bondholders, incorporated all the hospital’s receivables, and all the parcel tax revenue that was not required to pay bond holders to keep the hospital operating. “We found a way to use that money,” Heaslett explained.

I asked Heaslett whether he needed to get the bankruptcy judge to allow this use of revenues for operations while the creditors went unpaid. “Chapter 9 bankruptcy code says that the judge cannot tell the district how to operate,” Heaslett explained. “In all the cases that I have done, we have used some of the future revenue to operate the hospital. The hospital district board makes the decision what the hospital does with its revenue. ”

I am left wondering what might have happened had the Palm Drive Board decided to use David Heaslett to work through their bankruptcy process, instead of a firm that also represented bond trustee Wells Fargo Bank?

What might have happened had the high priced out-of-town consultants hired by Palm Drive hospital not been hired to run their shutdown playbook in our community?

Might the Board have accepted the doctor-led Foundation plan and kept our top-ranked, beloved Palm Drive Hospital open?

A Teachable Moment

My friend Jim Wheaton, a Sebastopol parent and computer programmer who has sat on two local boards and chaired one, had this to say about one of the lessons behind the closing of Palm Drive Hospital.

"A non-profit board trying to make noble decisions needs to understand that if they hire people with vested financial interests in their decisions, they are not going to get good financial advice. They are gong to get advice that furthers the financial interest of those advisers, especially if you don't investigate their financial interests."

Next week: Why Palm Drive lost money, the financial challenges of a small rural hospital, and the a look at the doctor-led plan to re-open Palm Drive Hospital.

https://img341.imageshack.us/img341/7214/jonathangreenbergsmall.jpgJonathan Greenberg is founder and CEO of Progressive Source Communications (https://progressivesource.com)and a Huffington Post blogger (https://www.huffingtonpost.com/jonathan-greenberg/). An author and investigative journalist, his work has appeared (https://jonathangreenberg.com) in the New York Times, The New Republic, GQ, New York Magazine, Forbes and Money. Jonathan resides in Sebastopol.

[Peacetown Jonathan]

There is a special meeting today at 5:30 pm of the Palm Drive District Board concerning the future of the hospital. More info here….

https://www.waccobb.net/forums/showthread.php?105391-Important-Palm-Drive-District-Board-Meeting&p=179879#post179879

[unclebillballadeer]

Your efforts to help with this issue, and to expose the (possible) corruption, mismanagement, and lack of transparency, are greatly appreciated by myself,and, I'm sure, many others in our community...Thanks, Jonathan !
I thought it would be a good idea to link to the FB page set up by our dedicated local advocates for keeping our hospital going: https://www.facebook.com/pages/Palm-Drive-A-New-Beginning/301495476670626 .

Here is the link to the the other related FB page:
https://www.facebook.com/PalmDriveHealthCareFoundation?fref=ts
(https://www.facebook.com/PalmDriveHealthCareFoundation?fref=ts)
Thanks again...
"Uncle"Bill

[scamperwillow]

I would like to ask everyone to take a deep breath. These board members are our neighbors and have VOLUNTEERED - some for many years - to run our hospital and do their best to carry it through many previous crises. They are not vindictive self-interested people. What happened to peace and love Sebastopol? I am actually pretty shocked at the vitriol and abuse that is being flung at our neighbors. Yes, maybe they made some mistakes - what would you do in their shoes? Can we band together to try to work out the best possible solution rather than turn this into a war that will serve no one? I understand they are currently in negotiations with the Foundation and perhaps others. Let's support these efforts rather than attack them as if they were demons.

Edited in by Barry:

If you are interested in how it came to pass that Palm Drive Hospital was shut down (even their website is shut down now!) be sure to read the excellent article by Jonathan Greenberg we published yesterday:

Behind Palm Drive Hospital's Closing Part II: Wells Fargo Bank & the Shutdown Playbook
(https://www.waccobb.net/forums/showthread.php?105367-Behind-Palm-Drive-Hospital%92s-Closing-Part-II-Wells-Fargo-Bank-amp-the-Shutdown-Playbook&p=179834#post179834)
Click the link above to see the article.

[Peacetown Jonathan]

Scamperwillow,

First, I want to agree with you that the Palm Drive District Board members are not "self-interested, vindictive people." I have found no evidence of any corruption on the part of any member of this board.

Second, to also agree that they have volunteered, and are our neighbors, and are working hard to do what they think is best.

Those things being said, I would like to respond to what I think is a rhetorical question: "what would you do in their shoes?"

Because it is not a rhetorical question.

And the answer, I think, was provided by many of us this afternoon during our public comments.
I would enjoy hearing from other readers of this, as replies to this post, what they would do in their shoes.?And, Scamperville, perhaps from you, as well, as to whether you think they made mistakes, what they might have done differently, and what you would have done in their shoes?

Were I in their shoes, having followed what has turned out to be misleading legal advice, and a shutdown playbook that benefitted bond trustee Wells Fargo Bank at the expense of the parcel tax paying, emergency room needing citizens that I was elected to serve, I would do the following:

1) I would order the CEO to fire the bankruptcy attorney who works for a firm that also represents Wells Fargo Bank, who provided suspiciously, clearly misleading advice, to the Board and public,as evidenced in the video above. I would then hire David Heaslett as the bankruptcy attorney to work on a solution that re-opened the ER and hospital, As noted in the article, Heaslett is the bankruptcy attorney that successfully brought the hospital through bankruptcy, and profitability, between 2007 and 2010.

2) I would apologize to the public for refusing to hear that the people of our community want to re-open the emergency room. Ours is a community clearly unwilling to go quietly into the night of the "new normal" of a community that allows the sickest among us to die, or suffer, because a multinational consulting firm told you that we cannot afford to keep one open. I have yet to hear a Board member disagree with the assertion made last Friday in bankruptcy court, by a Hospital paid attorney rejecting mediation, that there is "no evidence" that our community wants an emergency room. Scamperville, do you feel that this statement was accurate?

3) I would express my support for doing whatever necessary to work with whatever group presents the most compelling plan THAT REOPENS THE EMERGENCY ROOM and acute care facility, with ancillary, profitable operations, local doctor participation, and the support of donors behind it.

4) I would announce that the ONLY proposals our Board wil consider are those that restore the emergency room, an objecve that every single speaker we heard from this evening wanted to do.

5) I would make very clear that the $1.2 million in Medi-cal payments due in July, as well as the nearly $2 million in revenues coming from the parcel tax (after paying bond holders) ARE AVAILABLE for the operations of the hospital and facility for whatever plan can convincingly operate the hospital WITH AN EMERGENCY ROOM and acute care facility.

That is what I would do in their shoes. And then work wholeheartedly, collaboratively and with goodwill, with the doctor-led Foundation plan to reopen the hospital as soon as possible.

If I was unwilling to support all of the actions above, I would resign from the Board and let another person serve, a person who is willing to perform the role that I was elected to perform--a role that explicitly involves running a Health Care District that provides an emergency room for our community.

In other words, if I no longer believed that a hospital is possible for Pamm Drive, I would leave the Board, and make room for someone who believed that this is possible.

Because this is clearly what every person I have spoken with, and every person who has spoken publicly who is not a member of this board, or a close friend or political ally of the members of this board, want OUR ELECTED REPRESENTATIVES to do.

I say this with compassion, and the hope that the fine people who have made some very damaging decisions for our community this past month will reflect on their actions, the consequences of their actions, and what they are hearing from us, their neighbors, and the citizens they have been elected to serve.

:yinyang:


I would like to ask everyone to take a deep breath. These board members are our neighbors and have VOLUNTEERED - some for many years - to run our hospital and do their best to carry it through many previous crises. They are not vindictive self-interested people. What happened to peace and love Sebastopol? I am actually pretty shocked at the vitriol and abuse that is being flung at our neighbors. Yes, maybe they made some mistakes - what would you do in their shoes? Can we band together to try to work out the best possible solution rather than turn this into a war that will serve no one? I understand they are currently in negotiations with the Foundation and perhaps others. Let's support these efforts rather than attack them as if they were demons.

[farmerdan]

Peacetown Jonathan,

I would suggest that the best thing to do when you are on a board that has failed at its mission or you are not able to be effective is to resign and let someone else try a different approach. There is no shame in resigning. I resigned from the district board twice, once in 2000 when it was clear that I was out of step with the physician community and once in 2012 when it was clear that the rest of the board was not open to look at other options for the hospital. In 2012, I had to choose whether to help Dr. James Gude or stay on the board and be ineffective so I chose the former and have no regrets about this decision.

The current board is clearly out of step with the medical community and the community as a whole, which is what hospitals are all about and should consider that they cannot be effective in the present circumstance. This is not a judgement about anyone in particular but simply that the circumstances require a different orientation and skill set than some of the current board members have.

Also, the closing of the hospital has been a major trauma for the community and the board members alike and leaves them unable to rally the community for whatever comes next. Under these circumstances it is best to get out of the way rather than continuing to resist what the community obviously wants and the district was created for; an emergency room with acute care services.

Farmerdan

[Sara S]

Jonathan, thanks again for your work.

Something was curious at last night's meeting: Mr. Dawson, I believe, said that the loss of Palm Drive's "Medicare number" (which he seemed to offer as a reason for the closure) "took them by surprise" and I wondered why they didn't know that was going to happen.

Sara S

[Dianala]

Thank you, Jonathan, for your comprehensive reply. We all have friends and neighbors on either or both sides of the issue. This has become more personal than it should and emotions are running very high. That is why a mediator is a reasonable path to the current quagmire we are all in. That's what I would do in their shoes. Even the bankruptcy court said it was the thing to do. But, the Board members don't believe they are at a point where they need a mediator. What will it take to before they realize they need a neutral, third party to support an approach that has the best chance to bringing about a reasonable solution?

The District Board must take responsibility for their actions, especially if they realize they made "mistakes". These were very BIG mistakes and need to be corrected. The consequences are serious, and for those who were not at the Board meeting last night, there was testimony about a patient dying because he had to go to Santa Rosa instead of Palm Drive and suffered a very long wait (I heard over 10 hours) at Memorial's ER, and a letter from a mother whose son was in excruciating pain for 7 hours before being seen at a SR ER. We know the wait time at Palm Drive would not be the reason that man lost his life, or the boy suffered for seven hours.

People are suffering physically and emotionally because of this hospital closure and people are very angry. I hope this is not the "new normal" Sandra thinks is the trend based on the book she read. Is this how she is rationalizing her thinking?

I think several of the Board members are in over their heads and they should resign if they cannot act reasonably at this very important time when we need them to step up and be the best they can be.


Scamperwillow,

First, I want to agree with you that the Palm Drive District Board members are not "self-interested, vindictive people." I have found no evidence of any corruption on the part of any member of this board.

Second, to also agree that they have volunteered, and are our neighbors, and are working hard to do what they think is best...

[bikegal50]

Does anyone know how much Palm Drive is paying AMR ambulance service to be on standby sitting outside the ER 24 hours a day while there is a giant closed sign outside? Is this being done under the advice of the consultants that advised closure? Does anyone have stories of local people who have died because of the closure? I understand that the Board was caught between a rock and a hard place, but in reality they should have talked to staff and doctors and locals and not relied so heavily on consultants that have no connection to our special community.

[farmerdan]

We have been told that the ambulance costs $250/hr to be sitting at the hospital. This equates to $6,000 a day or $180,000 a month. This is far more money than the ENTIRE HOSPITAL lost in 2013, it's worst recent year and another reason we begged the district board not to close but let us donate $2 million to keep the hospital going. It would have been cheaper to keep the ER, Radiology, Lab, ICU and med surge operating than to spend $180,000 a month and still not be providing adequate care.

Farmerdan

[Dustyg]

More bad news generated by the 'direction' given to the hospital by its (our) Board of Directors. At least Mr. Harlan, Mr Administrator, resigned! He was costing over $600 a day when the hospital was open ($237,000 a year) and then was being paid just over $300 a day while the hospital was closed. Why was he being paid to administer a closed hospital? No patients, no docs, no labs, what was he doing? That would have been at about $110,000 a year for being the CEO of a hospital that no longer existed. Good God! How can we get this Board to step down and let some people interested in keeping our community and our hospital alive step up to the plate and join the Board on our behalf!


We have been told that the ambulance costs $250/hr to be sitting at the hospital. This equates to $6,000 a day or $180,000 a month. This is far more money than the ENTIRE HOSPITAL lost in 2013, it's worst recent year and another reason we begged the district board not to close but let us donate $2 million to keep the hospital going. It would have been cheaper to keep the ER, Radiology, Lab, ICU and med surge operating than to spend $180,000 a month and still not be providing adequate care.

Farmerdan

[droffeld]

Oh you mean like the employees, which I was until 4/18/14, whom they called back 3 weeks later because they realized they hadn't really thought things thru about so many things... for instance picking up the mail, sorting and getting the checks from patient payments to commercial insurance checks and having them deposited you know little things like that.

Not to mention all the money from hours and PTO that is owed thru the WARN ACT and is being paid thru the Bankruptcy court. Maybe if our wonderful CEO would take a slight pay cut or flex his hours like we did for months, maybe we could have gotten paid when we got let go and it wouldn't have been such a hardship on 250 employees! That would have been the right thing to do. But the board isn't thinking "right".


I understand that the Board was caught between a rock and a hard place, but in reality they should have talked to staff and doctors and locals and not relied so heavily on consultants that have no connection to our special community.

[Jim Wilson]

There is another aspect to this situation I would like to focus on: Where was the local media during this process? Many of us, particularly after the lead-up to the U.S. invasion of Iraq, have developed a healthy distrust of the traditional national media. You simply cannot trust anything published by entities like the New York Times or the Washington Post, or anything you hear on network t.v. This has been amply demonstrated. Add to that demonstration the fact that these entities are unapologetic about their role in the Iraq debacle, and that they have done nothing to reform the processes that lead to their complicity in it, and the only conclusion an attentive person can draw is that the traditional media is not to be trusted.

But I'm not sure that we have developed the same level of distrust for our local traditional media. It would appear that none of the local traditional media did even a tiny bit of investigating. I would love to be wrong about this. Does anyone know of an article in the P.D. or Sonoma West that asked those advocating for the closure of Palm Drive any difficult questions? Has there been any follow-up in the local traditional media? Or is this yet another example of how the traditional media have abandoned their calling to be genuine investigators? It appears to me that the local media simply published the press releases put out by the group advocating for closure; much like the NYT and Wapo simply published what the Bush administration issued in the lead-up to the U.S. invasion of Iraq. Again, I would love to be wrong about this. But if I am not wrong, then I think we need to do a re-evaluation and a concerted questioning of the role that media such as the PD and Sonoma West play in Sonoma County and in Sebastopol in particular.

[Gus diZerega]

Well, if they did I missed it as well.


... Where was the local media during this process? .... But if I am not wrong, then I think we need to do a re-evaluation and a concerted questioning of the role that media such as the PD and Sonoma West play in Sonoma County and in Sebastopol in particular.

[tommy]

In the 18 years I've lived in Sebastopol, I've read a steady stream of articles in Sonoma West Times, about Palm Drive Hospital's under-utilization, lack of patients, excessive expense, and close proximity to other hospitals such as Memorial, Kaiser, and Sutter. It's easy to find villains, in the Banks, attorneys, and least of all the volunteer Board Members. To me, it's always been a simple case of too few patients and too much expense, in a context of close by superior facilities, with some people unwilling to acknowledge these realities.


There is another aspect to this situation I would like to focus on: Where was the local media during this process? Many of us, particularly after the lead-up to the U.S. invasion of Iraq, have developed a healthy distrust of the traditional national media. You simply cannot trust anything published by entities like the New York Times or the Washington Post, or anything you hear on network t.v. This has been amply demonstrated. Add to that demonstration the fact that these entities are unapologetic about their role in the Iraq debacle, and that they have done nothing to reform the processes that lead to their complicity in it, and the only conclusion an attentive person can draw is that the traditional media is not to be trusted.

But I'm not sure that we have developed the same level of distrust for our local traditional media. It would appear that none of the local traditional media did even a tiny bit of investigating. I would love to be wrong about this. Does anyone know of an article in the P.D. or Sonoma West that asked those advocating for the closure of Palm Drive any difficult questions? Has there been any follow-up in the local traditional media? Or is this yet another example of how the traditional media have abandoned their calling to be genuine investigators? It appears to me that the local media simply published the press releases put out by the group advocating for closure; much like the NYT and Wapo simply published what the Bush administration issued in the lead-up to the U.S. invasion of Iraq. Again, I would love to be wrong about this. But if I am not wrong, then I think we need to do a re-evaluation and a concerted questioning of the role that media such as the PD and Sonoma West play in Sonoma County and in Sebastopol in particular.

[sebastopolian]

Thank you Tommy. I've lived in Sebastopol for 30+ years and subscribed to Sonoma West (and its
predecessor) all that time. Our local press covered the under-utilization of Palm Drive Hospital on numerous
occasions. I've also been a patient at the hospital on two occasions over the past decade. While I received excellent care both times (once in ICU) it was also my personal observation that the hospital was way under-utilized compared to other hospitals I've been in. Too many empty rooms and too few patients.

[Gus diZerega]

The recent comments about under utilization and Sonoma West are not addressing the issue they claim to criticize. No one denies that under utilization is a problem. No one.

The issues are first, why did the local media not report on the serious irregularities committed by the Board and equally serious conflicts of interest among key people the Board hired to guide their way? WACCO and Jonathan Greenberg in particular has done far better at illuminating what is amiss with the Board's actions.

Second, the local press did not report in any depth on alternative proposals or discuss the Board's seemingly inexplicable rejection of even attempting mediation with people who knew the hospital better than they did- the doctors. They are not the owners of this hospital and they OWE it to the citizens of this town to engage in good faith mediation. If they cannot do this they are unable or unwilling to perform the job for which they were elected. And so they should resign.

If the Board is made up of well-meaning volunteers who have demonstrably lost public confidence and their judgment has been rejected by Sebastopolians from the Chief of Police, the Fire Chief, the doctors, to a great many citizens, why not just resign? Whjat is the ;point of continuing to obstruct? IF the Board is right they will be able to say "I told you so" when the hospital fails, and they will be listened to with greater respect when they speak on future issues because they were proved right on this one.

As it is they are standing in the way of attempts to make the institution they were elected to manage work better while offering nothing on their own to solve the problem. And so have become part of the problem.

[farmerdan]

You are both right as far as the local newspaper goes, hospital utilization for INPATIENT services has dropped dramatically all over the US during the last 30 years and continues on the same trend. This is a good trend for patients, but a challenge for old school hospital thinking. You are also right that the local papers have always reported the failures (not the successes) of Palm Drive. This is just how journalism works, good news is no news. When a life was saved, it did not get reported. On the last night the hospital was operating, a life was saved at midnight, but this did not make the papers. It is also true that the local papers have downsized to the point where they can't afford to spend a lot of time investigating anything so the reports tend to be he said/she said. (Martin Espinosa's article in the PD on the other hospitals in the region was an exception because it was very well researched.)

Lets look at some other facts: Sutter is building a brand new hospital for many hundreds of millions of dollars (they are not planning to lose money.) This hospital has downsized inpatient services dramatically from what Sutter currently has at Chanate Road and is focused mostly on outpatient services. Willits of all places is building a brand new hospital. Hospitals like St Helena Clear Lake have made dramatic turnarounds in recent years. St Helena hospital has been on a major growth curve for a long time.

Out patient services (including ER) at Palm Drive have grown over the last 10 years, not shrunk. Revenue at Palm Drive went from $22 million in 2008 to $28 million in 2010 and the hospital had a $2 million profit. If you read the PD article recently, this is exactly what all of the hospital CEOs from Healdsburg, Sonoma and Petaluma are saying; you have to focus on outpatient services. What are these? Radiology, Lab, ER, outpatient surgery, infusion, wound care, mental health, neurology, and diagnostic procedures. You still need some inpatient and ICU beds, but this is not where the emphasis is.

Can Palm Drive be profitable and sustainable? As the person who managed its purchase in 1999 and got it out of bankruptcy in 2007, I can absolutely say yes. However, it has to be run like a real business, not a non-profit with a volunteer board who have never run a big business. That means that you have to COMPETE in the marketplace. This IS NOT EASY but can be done and IS BEING done all over the US by small hospitals who think outside of the old butts in beds box.

How does any small company compete against the big boxes? Do something better and different than the big boys. If you walk around Sebastopol, you see small companies thriving all over. How do they do it? Screaming Mimis makes the best ice cream around! Tailor Maid makes the best coffee! Sprint gives the best service. Sebastopol Hardware stocks everything you can think of and has great customer service. Obviously we could go on and on with this!

I would have laughed if it wasn't so sad that Rollie came out with his 'Palm Drive is Dead' editorial in the very paper that proves that you can compete with the big boys. Rollie will be the first to admit that it has been VERY challenging to keep the Times and News running with the newspaper business being hammered by the internet and the Press Democrat doing everything to take away his market share but HE IS STILL HERE. He has accomplished this by diversifying and publishing magazine supplements and other advertizing.

Back to Palm Drive: You can't run a complex, competitive business with 5 volunteers who meet once a month and have virtually no experience running a business. You can't run any sizeable business with no marketing plan, no strategic plan, and no growth plan. This is why the Foundation is proposing a 7-9 member operating committee made up of physicians and health care business professionals to manage operations. We know this model works because it is used in Marin and other hospitals very successfully.

The Foundation is bringing in Terry Newmyer, a nationally recognized expert on small hospital management on June 1st to craft a business plan with full financial proformas and comparisons to other small hospitals. This will be presented to the public in mid June. I would hope that you will review this plan before making a final judgement about whether a small hospital with Emergency Services can be viable in Sebastopol.

Farmerdan

[Dianala]

I found the headline in this week's Sonoma West Times an interesting choice of perspective: "Judge Denies Mediation Request in Hospital Saga". Since many people read the headlines, and only the headlines, I believe this is very misleading. Here is part of the actual article, which is closer to the truth than the headline would lead most to believe. Judge Jaroslovsky actually recommended mediation in this situation and stated he had no power to enforce it. Common sense, however, is where the judge was coming from and I still do not understand why the District Board is not willing to bring in a mediator to work with the Foundation to find common ground and get the hospital open. Federal mediators are free, I have used them in union negotiations that went on for several months, and the mediator helped us get past the deadlock and differences in a month's time.

I believe the community's first priority is bringing back the ER and that requires some form of an acute care hospital. I also believe that it can be profitable with experienced, and proven people in place to run it.

Sonoma West Times article (partial):
Judge Alan Jaroslovsky’s decision, issued Monday, said the Foundation had no standing to make the motion because this was bankruptcy court and they were neither a creditor nor a debtor. He also said that granting the motion would be an unlawful interference with the district’s right, as a government entity, to make its own decisions. In addition, any result of the mediation would not be binding on the District Board.

“I don’t see how you or I have any power to impose it,” he said, speaking to the attorney for the Foundation. “You have no standing, no leverage, why should I force the (hospital) to talk to you when there’s nothing you can do? I don’t know why the (hospital) would listen to your claim if they don’t want to.”

But Jaroslovsky also made it clear that he thought mediation could be effective in troublesome disputes and tried several times to persuade the hospital to agree to mediation for as little as two days or even one hour.

During the hearing, the Foundation’s attorney argued that the closure of the hospital had created an urgent health care crisis in West County, and that the proposal submitted by the Foundation should be given precedence because it was the only one before the District Board that would reconstitute an acute care hospital with an emergency department.

“We believe the hospital can be reopened on a profitable basis,” said attorney Robert Eisenbach of the San Francisco offices of Cooley LLP.

He acknowledged that it was a legal stretch for a Bankruptcy Court Judge to appoint a mediator in a situation such as this; that the District Board was not bound to accept the results of any mediation; and that the Foundation had no standing to bring the motion because it was neither a creditor nor a debtor nor was it in litigation with the hospital.

But he said the community urgently wanted its hospital back and mediation could help both sides to understand each other’s position. “The discussions (with the District Board) have not been productive enough, and we think mediation would be helpful,” Eisenbach said. “If it doesn’t work, at the end of the day, we can say we tried.”

Attorneys for the hospital, however, said the request would amount to “a sweeping interference” with the District’s decision-making powers, which is prohibited by law.



You are both right as far as the local newspaper goes, hospital utilization for INPATIENT services has dropped dramatically all over the US during the last 30 years and continues on the same trend. This is a good trend for patients, but a challenge for old school hospital thinking. You are also right that the local papers have always reported the failures (not the successes) of Palm Drive. This is just how journalism works, good news is no news. ...

[Sarina Ferguson]

I also would like to point out that the employees of PDH did furloughs last year all summer, we gave up retirement contributions for months, we were pigeonholed into only one choice for healthcare coverage, and the hospital went through 2 rounds of layoffs (or as they called it "right sizing" ) in fall 2013 and early part of 2014. All of this was because we were told we needed to to "cut expenses" and we were "financially fragile." I am wondering why this did not work for PDH? PDH has supposedly reported similar revenue for the past few years so in theory this should have worked, HOWEVER... expenses increased over a million in 2013??? With all of these supposed expense cutting measures how is this possible and what were they frivolously spending on?

One last note, with all the "revenue is not there due to a census drop from 9 to 4" discussion, why have they not ever discussed that a major portion of lack of admits was due to an imposed EMR admit process that we know one of the primary admitting MD's of Sebastopol could not utilise. Wouldn't have been a good idea to notice this trend in the first month and remedy it rather then let it dwindle from 9 to 4 patients over the months and not say or do anything about it??? Something smells fishy and I hope Johnathan can continue to find the source.


Oh you mean like the employees, which I was until 4/18/14, whom they called back 3 weeks later because they realized they hadn't really thought things thru about so many things... for instance picking up the mail, sorting and getting the checks from patient payments to commercial insurance checks and having them deposited you know little things like that.

Not to mention all the money from hours and PTO that is owed thru the WARN ACT and is being paid thru the Bankruptcy court. Maybe if our wonderful CEO would take a slight pay cut or flex his hours like we did for months, maybe we could have gotten paid when we got let go and it wouldn't have been such a hardship on 250 employees! That would have been the right thing to do. But the board isn't thinking "right".

[cynctysings]

Thank you to all of you who post. I am particularly grateful for the insightful and informative post from farmerdan. As someone who is a third generation Sebastopol resident, the closing of Palm Drive has been difficult for me to see. It is clear that the Foundation is actively pursuing its re-opening and for that I am grateful. And still, if there is to be a hospital here, and not only an ER/Urgent Care facility with various departments attached, might we not also look to getting some boots on the ground by those of us who are willing to be trained to do so and do some old school door to door lobbying for the multitudes of West County residents who currently have a Kaiser plan to switch insurance to one that would be taken at Palm Drive? With the advent of Covered California and 'Obamacare' now in force, the old paradigm of being unable to switch because of pre-exitsting conditions is no more. Surely a cadre of volunteers who know the insurance plans out there and can sign folks up would be able to canvas West County and make a dent in the numbers that we need to make this a viable hospital. Just a thought. Again, thanks to all for the spirited conversation and thoughtful posts.

[farmerdan]

Jonathan,

Someone asked Joan why Wells Fargo would want to see Palm Drive Closed?

First the short answer:

Wells is protecting itself and the bond holders ability to keep collecting our tax money. Unlike in 2007, they now feel that their best bet is to kill the hospital and spend money to fight off a repeal of the parcel tax rather than help to keep the hospital alive. They have convinced the district board to go along with this with the threat that they will take all of the tax money otherwise and leave the district with no income (the stick) and the promise of running other kinds of healthcare with our money (the carrot.)

From my perspective, this is an understandable but flawed strategy because it does not factor in the determination and persistence of the community to have a hospital and it underestimates the likelihood of a repeal of the parcel tax if they are successful in keeping the hospital closed.

The long answer:

Wells Fargo is the trustee for the Palm Drive Health Care District Bonds that were sold in 2004 ($10 million) and 2010 ($12 million). As the trustee, Wells collects the tax money and pays the bond holders and has a fiduciary responsibility to the bondholders themselves. This includes making sure that the parcel taxes remain in effect and are available to pay off the bonds.

As the trustee, Wells also holds $3 million in cash ($1M from 2004 and $2M from 2010) that was part of the bond sale as a reserve in case the district fails to make timely payments (something that is actually impossible as you will see below.)

The way the money flows is that the county collects the tax. They send all of the proceeds after expenses to Wells. Wells keeps the portion they need to pay the bondholders and sends the balance to the district. (You can see here that the district can't be late.)

Wells makes money by getting fees to manage this account and by having the $3 million in deposits that they can then lend out. Note that the district is paying interest on this money (4.3% on the first 10M and 7.5% on the second 2M) so the district is basically paying on money that it doesn't have. (more on this later.)

Why Wells would want to see the hospital closed:

The problem for the bond holders is that the rating of the bonds is now 'junk bonds', which means that the bond holders can't sell them without taking a big loss. When the first $10M in bonds were sold, they were rated BBB, which is the bottom end of investment grade. That's why the interest rate was lower (4.3%) than the second bond sale (7.5%) when the bonds were rated at BB-, a junk bond rating.

What all this adds up to is that the hospital operations create a liability to the bondholders because it sucks up the parcel taxes and then some and keeps the bond rating low. If the district can jettison the hospital AND keep the parcel tax flowing, the bonds will be much more secure and likely receive a higher rating (and therefore become more valuable.)

In this approach, Wells is playing a game of chicken with the community. What they are betting is that they can keep the district board on task to keep the hospital closed and can use their PR guys to fight off a repeal of the taxes by the voters. Their first step in this process was to get the district to hire a Wells friendly law firm, Fox Rothschild by waiving the obvious conflict of interest. (At least one board member stated she had no recollection of this waiver.) Next they brought in a PR firm disguised as a different company to manage the public perception of the closure.

If they are successful, they get to keep all of our money and collect all of the interest from the tax payers AND get a better rating on their bonds! No doubt this also looked very appealing to the district board members because they would have a pot of our money ($1.8 million) every year to play with and no troublesome hospital to have to run. Yow!

So you can see how this unholy alliance was formed in closed sessions between the district and Wells in the background. This also explains why the district has been so hostile to the foundation, which was trying to keep the hospital open. This did not fit their playbook. We don't have to look far for confirmation of these facts. Here are the goals of the PR firm that the district hired (at the recommendation of their bankruptcy attorney whose firm does lots of work for Wells Fargo:)

“Position the hospital for a quick and easy closure, including assisting with employee communications;

Provide effective and proactive messaging regarding the closure, staffing reductions, and lay the foundation for a bright future for Palm Drive;

Protect the parcel tax income as the hospital closes and reemerges in its new, sustainable form/model “

This “bright future” with a “new, sustainable form/model” constitutes no less than the privatization of what is owned by the community that will NOT provide acute care and emergency services. Please note that the Palm Drive Healthcare District was specifically formed in order to support an acute care hospital with emergency services. This is what people are paying taxes to support.

You can see that from Wells point of view, this is exactly what they want, 'a quick and easy close of the hospital' and 'protect the parcel tax.' This proposal adds that the PR firm will manage the campaign to fight off a repeal effort if one is mounted.

By the way, this PR contract was signed well before there was a single public meeting about the possible closure of the hospital. This demonstrates that the board acted unlawfully in closed session to make the decision to close, something that is clearly prohibited by the Brown Act. This does not seem to bother them. As one board member remarked 'people break the Brown Act all the time. Nobody really enforces it.' (This is actually not true as they are liable to find out.)

What Happens Next

In my view, this depends on whether the district board has a religious conversion and decides to start talking to the physicians, the foundation and the community about how to manage Wells Fargo and the bond holders or continues to work with Wells Fargo to try to manage the physicians, the foundation and the community. So far, they have chosen the latter, but I think both they and Wells are making a big mistake that they will soon come to regret for the following reasons:

The community is just waking up to what we have lost and we are finding out WHY we lost it. We already know of deaths that might have been prevented if Palm Drive's ER was operating and lots of stories of long waits and poor service in Santa Rosa are floating around. My own read on this is that the community will do everything in its power to reopen the hospital including dumping sitting district board members who are loyal to the Wells playbook.

Also, I have not talked to a single person who has said they will vote to keep the parcel tax if there is no hospital. While we are not supporting a repeal at this time because we want to see the hospital reopened, we would certainly join the effort if the district board is successful in keeping it closed past November.

Here's what should be happening

In other municipal bankruptcies like Stockton and Detroit, the bond holders took a serious haircut (they had to give up some of their value.) This ranged anywhere from 40% to 100%. Given that we are going to raise donations to reopen the hospital, the bondholders should have to kick in as well. Then, there will be enough money to restart the hospital and get it to cash flow.

It should be mentioned that the purchasers of the 2010 bonds KNEW that if the hospital closed, they might lose ALL of their money if the voters repealed the tax. This was spelled out IN THE BOND DOCUMENTS. This is why the interest rate is so high (7.5% tax free.) The problem is that the board and their attorney are not about to force the bondholders into submission because they are all in bed together.

What We Are Focused On

Right now, we are focused on reopening the hospital and are hoping for a religious conversion on the district board, however remote that might currently seem. If that does not work, there will likely be a recall campaign and the elections in November might change things. If neither of these works, repealing the tax will be our only option to prevent Wells and the district from running away with our money.

farmerdan

[newclay]

I have been in this community for about a year now... and mmmm I thought the goal here was peace and healing? That being the case. Why do we want to focus on filling hospitals just to pay salaries? Mmmm seems counter productive to peace? Quantamphysically counter-productive?


Thank you Tommy. I've lived in Sebastopol for 30+ years and subscribed to Sonoma West (and its
predecessor) all that time. Our local press covered the under-utilization of Palm Drive Hospital on numerous
occasions. I've also been a patient at the hospital on two occasions over the past decade. While I received excellent care both times (once in ICU) it was also my personal observation that the hospital was way under-utilized compared to other hospitals I've been in. Too many empty rooms and too few patients.

[theindependenteye]

I have been in this community for about a year now... and mmmm I thought the goal here was peace and healing? That being the case. Why do we want to focus on filling hospitals just to pay salaries? Mmmm seems counter productive to peace? Quantamphysically counter-productive?

No one is advocating sticking people in hospitals who don't belong there. Where "marketing" has been discussed in this thread, I think the evident intention is to maintain a care facility close at hand rather than farming everything out to the large institutions in Santa Rosa, while finding an economically viable way to do that.

The care I received at Palm Drive was life-saving. It could have been gotten in Santa Rosa only at great inconvenience and, without Palm Drive's outpatient services, a huge personal cost. For some tests and for my heart operation, I was referred elsewhere — there was no urge on the part of my local medical team to keep me bedded there — but it was a deeply valued way-station.

The focus of this discussion is not on "paying salaries." It's on healing. "Peace" — well, maybe not. Maybe we need to raise a bit more hell.

Cheers—
Conrad

[Jim Wilson]

A quick note on the responses to my post on local media coverage. I want to thank Tommy, and others, for pointing out that there has been consistent local coverage re Palm Drive's financial situation. That changes my view of the situation. At the same time, I think Gus's response is also to the point. In other words, I think I likely overreacted regarding local coverage because I find the closing of Palm Drive to be a serious blow to our community. And I remain puzzled as to why it was considered necessary; so far as I can tell there exist several options for keeping Palm Drive open. I don't understand why they aren't being given more attention.

There is another view that I would like to place into consideration. People have talked about hospitals as businesses and hospitals as non-profits, but I have noticed that the idea of hospitals as a public utility has not been raised. In this era of privatization it probably seems quixotic to even raise the idea of extending the concept of public utilities to embrace hospitals. On the other hand, it may be that at a juncture like this it might be just the right moment.

[farmerdan]

Jim,

Your post is right on. Hospitals provide a local utility purpose in the form of access to Emergency care in the same way that a fire department, school or sewer system does. Without Emergency services close at hand, people die or are permanently disabled.

That being said, hospitals are also businesses that compete with each other for dollars. This makes them unlike schools, fire departments, and sewer districts.Whether they are 'for-profit' or 'non-profit' really does not change them very much in my experience. Sutter is a non-profit that acts like a predatory for profit. Having a community owned hospital should assure that it is not closed as was being done in 1999 by HCA the corporate owner, but has not in our case.

Also, when I proposed earlier that Palm Drive needed to be marketed, I was referring to the need to let people know what services are available, not to give unnecessary treatment.

farmerdan

[PDines]

A quick note on the responses to my post on local media coverage. I want to thank Tommy, and others, for pointing out that there has been consistent local coverage re Palm Drive's financial situation. ...
Hmmm, I did NOT see any coverage that the Palm Drive Hosp. was considering closing UNTIL they had already decided it as an impossible immediate fait accompli. I didn't hear "it's coming, we're on the brink, what would the community like us to do, we need XYZ, these are the issues," etc. I believe that, even if I didn't read that directly, I would've heard it through the grapevine when people responded. We heard those urgent messages the last couple times they were in crisis but not this time.

Instead I hear many people say they felt stunned and blindsided by the news that this was going to be suddenly closed down. That situation was NOT described by the hospital or in the media. I feel that's inappropriate for a community resource that the community has rallied for many times, and suggests that something was at play other than putting our community needs first. If we had knowledge that this was on the brink again, we could participated in creative problem-solving. Instead we were told after the decision was made and they said there was no time to try anything. Even still, a creative solution has been offered and the hosp. won't even consider it. I just doesn't feel like they're putting our community and the hospital first.

I was concerned before that, when they kept paying big fees to farm out the management to consulting companies. That was a huge cost, and I was waiting to see whether they really had the magic formula to turn this around, or would just be outsiders making their personal profit but without the investment in our community's well-being. It feels to me like the second. I wonder how the math would've worked without their fees. I wonder how the problem-solving would've been approached if it had been led by community oriented people who understood the key role the hospital plays in this region. I wonder how priorities would've been set if they had talked with key players, including the Sebastopol police and fire, who it seems are greatly impacted by the hospital's closure. These seem like really big missing steps, especially when they're charging the hospital such large consulting/management fees.

[Barry]

There's a thoughtful opinion article in the Sonoma West from May 7th entitled "Palm Drive Foundation proposal not the answer (https://www.sonomawest.com/sonoma_west_times_and_news/opinion/editorials/palm-drive-foundation-proposal-not-the-answer/article_85932e2a-d61e-11e3-9ea9-001a4bcf887a.html)" by Jim Horn.

It starts with:

"Three weeks ago, the Palm Drive Health Care Foundation submitted a proposal to keep Palm Drive Hospital open. Unfortunately, its plan to restore solvency by assuming complete control and slashing employees and expenses does not solve the hospital’s basic money problems.

In addition, the proposal raises a host of conflict of interest and basic competency questions that have not been answered. As a result, the hospital should continue seeking other viable proposals and partners to provide urgent care and other critical medical services for West Sonoma County."

It's worth a read (https://www.sonomawest.com/sonoma_west_times_and_news/opinion/editorials/palm-drive-foundation-proposal-not-the-answer/article_85932e2a-d61e-11e3-9ea9-001a4bcf887a.html).

[newclay]

thank you friend,

I am also a recipient of having my little furry brother,(batboy) saved after getting hit by car by them and am very grateful. My comments are for all hospitals and the way we are viewing the NEED for suffering or Crime...because we have a commitment to pay someone a salary that needs paid even when our society has adjusted to our cries for TRUE PEACE and LESS CRIME... It becomes sought after when we are putting money on the level of this NEED? To further what I am proposing is that there be a stipend for housing, best food provided, cell phone bills paid and auto with free education to those in these positions. So "NEEDS" are not asking for someone else to cease their NEEDs to pay these money needs. Basically I am advocating a severance package provided for by the Community so when PEACE REIGNS...we are not asking for Hell to break lose in someones life so that someone else can simply pay bills? thanks for input, Bless yall':waccosun::heart:


No one is advocating sticking people in hospitals who don't belong there. Where "marketing" has been discussed in this thread, I think the evident intention...

[peggykarp]

Mediation between the Board and the Foundation seems like the best way forward. What does the Board have to lose? It has already lost its credibility.

[cynctysings]

Dian, Because of your post, I, also, read Jim Horn's informative article. As always, there are many sides to this story. I am very grateful for Mr. Horn's reporting of facts on another side of the coin.

This issue of re-opening an urgent care facility, however, remains to be solved. It is my fervent hope that the needs of this community will trump the needs of finger pointing and vitriol from any side of the discussions at hand and that the Board, the Foundation, and everyone else at the table are able to work together towards a solution.


Having read this, my certainty is shaken. Along with everything else I didn't know is the Smith/Gude business connection...

[farmerdan]

[First let me say that I have learned not to respond to attacks like Jim Horn’s because it only gives them more credibility than they deserve. But since I have been asked, I would offer the following:]

I first met Dr. James Gude in 2007. I was desperate to get Palm Drive back on its feet. It was losing $500,000 from operations every month and I was having to write checks for $250,000 every two weeks to cover payroll. My first thought was to reopen the ICU since it had been closed a year earlier. The closure was reportedly going to save the hospital $1 million a year but actually cost it $3 million because the hospital could no longer do complex surgeries or handle higher acuity cases. I had heard that Jim was tired of running Sutter’s ICUs and was looking to create a telemedicine company.

I went to visit him in his office, which was the old men’s room in the medical library wing of the 1930s Community Hospital. Jim had been told that he could have an office anywhere and chose to be with the books, his true love. The only office available was the old men’s bathroom so that is where he had settled many years before.

I was a little taken aback to see this prestigious physician camped out with his dog and surrounded by books in the old wing of the hospital but our conversation was wonderful. I told him that I was aware that he wanted to start a telemedicine company serving rural hospital and offered that if he would come to Palm Drive and reopen the ICU under his management, I would help him build his telemedicine company (a promise I am still keeping to this day.) He also had to agree to set up an office in the hospital and be a mentor to the physicians and nurses.

My instinct was that Jim would bring business to Palm Drive because of his reputation and collegial relationship with physicians all over the county. This turned out to true beyond my wildest dreams. After considering this proposal for only a few moments, Jim said ‘Yes.’ We shook hands and I told him to be ready for a moving truck on July 1. There was no contract, no terms or anything. I left elated because I could now see a possible path to getting Palm Drive to cash flow.

My next stop was the hospital to get a budget together to remodel the ICU into a state of the art facility. It was being used as a storage room and looked awful so this was going to be a real challenge. The budget came back at $350,000. We had no money so I headed out to Kaiser where I declared that they should give me $300,000 or Palm Drive was going to close and all the indigent patients would end up in their ER. To my shock, Judy Coffee said yes. Once again, I was elated but I got a call later and Judy said she could only give us $100,000. Somehow, we scrounged up the rest of the money, I don’t actually remember where it came from.

In fact, the Palm Drive ICU was remodeled and opened on July 2, 2007. By 11:00AM, there were 3 patients in the ICU, one of whom was flown by helicopter from Willits. Over the next 2 years, Palm Drive’s revenue went from $22 million to $28 million and the hospital had a profit for the first time in years in 2010. I attribute most of this to Jim’s presence. Jim created a certified stroke program, the first of its kind with Dr. Allan Bernstein, taught grand rounds every Wednesday, connected Oakland Children’s Center by telemedicine and provided the best ICU care in the area.

So my work with Jim has taken on a number of forms. When I was still on the district board, I donated money to the foundation, which was loaned to Jim when his company was faltering because I knew that his loss would be terrible not only for Palm Drive but for Healdsburg, Fort Bragg and Willits. When I left the district board, I began helping Jim build his telemedicine company by finding some investors and providing business guidance so that he would stay at Palm Drive. I have been working for 2 years for $1/year.

When Jim said he was going to rally the doctors to save Palm Drive in April, I told him he was crazy, that he had no idea how difficult this would be, how much money it would take and how much abuse would be dished out (as we see from Jim Horn.) I watched him march off as if he had never heard me. I had already decided that I was NOT going to get involved in Palm Drive’s demise which I had seen coming for over 2 years but was powerless to prevent since the district board had long ago decided that I was persona non grata.

I should add here that I do have a conflict of interest: I consider Jim Gude to be the most amazing person I have ever met and someone I would do most anything for. At 74, he is full of energy, is kind to everyone and willing to work nights and weekends to provide care and comfort to patients. The nurses and doctors who work with him revere him. Just today, he announced that he is going to work one week a month at Clear Lake in person to help get their hospitalist program going. So I am not very interested in people who attack him.

I was actually in the Philippines when the announcement was made and missed the first meeting. When I came home, I had NO INTENTION of getting involved. Even Jim did not get me to consider it. But then Joan called me on the phone one day crying and said ‘Dan, you’re not going to let them close the hospital without saying something are you?’ Unfortunately this leaves a guy with only two choices; be a schmuck and say ‘dear, I am going to sit by and watch it fail’ or be her hero and say ‘dear, I will do everything I can to keep the hospital open.’ You guys know the drill.

So I turned to the best healthcare CPA I know, Glenn Minervini-Zick and asked him if he would look at the finances and see if there was the potential of getting operations to work. Only Glenn could do this because he was the CFO for a few years and has 30 years of healthcare experience for big CPA firms. He is also the best business forecaster I know and was willing to do this for free.

Glenn came back with a way to keep the hospital going if we could raise $2-3 million, which we were able to find most of on pretty short notice so there was at least a hope of keeping the hospital alive. Glenn and I worked night and day to figure out the business strategy and recruited a bunch of new docs to fill out the business. We only had a week to put a plan together, but it was very good from my perspective. Of course some parts were not fully fleshed out, but that’s what you get in one week. Unfortunately, we did not get the opportunity to try it out as you know.

I can’t see how you turn this into some nefarious plot by the evil Dan Smith, Dr Jekyll/Gude and Mr Scrooge/Minervini-Zick but it reminds me of 1999 when local people got together and bought the hospital as the 35 for Palm Drive. In the local paper there were all kinds of accusations about this nefarious group who were ‘running away with our hospital.’ There were even some political cartoons that cast the 35 for Palm Drive as robbers stealing the hospital. I was shocked because I knew that everyone was just trying to save the hospital. I have learned since then that people who give away money are often distrusted by people who can’t see themselves giving money away even if they had it.

As for Jim Horn’s ‘report’, you should know that there were 4 reports about the foundation’s plan. Two of them rated the plan 95 out of 100 (Jim Maresca and John Moise.) Jim Horn rated it lower as did Sandra Bodley but even these ratings were not so low as to call off discussions, which the district board went forward with.

As to the offer of free software, I put that in the proposal because I saw it as a possible way to capture the other federal meaningful use money for the hospital. Jim Horn’s fantasy that somehow we were trying to use the hospital as a guinea pig and we were going to somehow use Palm Drive to break into the US market is just that, his fantasy. We have no plans to do this and I always saw this as a transition until the hospital could get back on its feet and afford a US centric system.

By this time in my life, I am pretty used to being attacked. Whenever you speak truth to power, the first response is usually character assassination, which I consider Jim Horn’s piece to be. This works with a lot of people because of our natural inclination to distrust people who do crazy stuff like donate lots of money, give their services for free, or just act out of their love of the human race. The odd part is these same people trust $520 per hour lawyers, $50,000 hospital shut down consultants, high priced financial consultants who don't do any more than tell them what is already on their financial statements and CFOs who are painting pretty pictures. Go figure!

farmerdan

[Peacetown Jonathan]

It was five weeks ago, soon after I started investigating the Palm Drive closing, when I attended the April 23 hearing.

That's when I first started hearing the allegations of "conflict of interest," being leveled by members of the Palm Drive Board toward Jim Gude and Dan Smith.

I was already acquainted with both men. I knew enough about their background, and the fact that Smith was offering to DONATE $1.5 million, and Gude to work for next to nothing, to realize that the conflict of interest allegations rang hollow.

It was then, and remains, a smokescreen to mask the antipathy that members of the Palm Drive Board feel for Smith. This antipathy, it seemed, spread to anyone (myself included) that criticized Palm Drives abysmal management--or anyone who tried to suggest that the hospital might stay open.

Although it was not spelled out in the shutdown playbook that the Board signed off on, with the shadowy PR firm Young & Company on March 25, it seemed to me to be a basic strategic communications tactic called deflection.

Deflect attention from the facts by attacking the messenger of those facts.

Then, use friendly media to parrot your talking points.

Sonoma West, whose publisher Rollie Atkinsons' actions seem to indicate a strong personal loyalty to one or more members of the Palm Drive Board, was all too willing to play the parrot. As mentioned in my post above, Atkinson’s 'Palm Drive is Dead" May 1 editorial hit all the playbook talking points like a stenographer taking dictation. Jim Horn's "conflict of interest" editorial, which we are talking about in Farmer Dan's post above, ran one week later. Ironically, while engaging in his mythical conflict of interest character assassination of Smith and Gude (two men who have worked hardest, through the years, to make the hospital the beloved institution it is in our community),

Jim Horn also used his commentary to condemn the "vicious attacks" on management and the board that many, many community critics had made at public meetings. Many have called on the Board members to resign of they do not believe that our Hospital District, created specifically to provide emergency room services, should provide these services any longer. And let representatives serve our community who believe that this service is part of their job. I am hopeful that the elected Board members can change their adamant positions in this matter,as they learn the facts behind the manipulative advice they received.

But calls for the resignation of Board members are not "vicious attacks.: They are grassroots, democratic responses of members of a community who are unwilling to go quietly into the night of the "new normal" of no hospital for 40,000 of us. "Vicious attacks" would be allegations of corrupt intentions. This is what Horn himself engaged in with this editorial.

Horn also reported that he had analyzed the plan on behalf of the Palm Drive District Board, and that it "does not solve the hospital's basic money problems." It had "basic competency questions that could not be answered" and was full of the dreaded "conflict of interest."

Political supporters of the Palm Drive Board have been using Horn's piece as "evidence," to reporters like myself, that the Foundation plan was unworthy of support (despite the fact that it would have resulted in an emergency room that would be open as I write this).

On May 12, Council Member John Eder, who is married to District Board Member Marsha Sue Lustig, emailed me a link to Horn's editorial, with the note, For a concise and balanced critique of the Foundation's proposal, I suggest that you read "Palm Drive Foundation proposal not the answer", by Jim Horn, a Sebastopol engineer who was on the proposal review committee. After reading and analyzing the 70+ page document, he shares many of the same conclusions and concerns as the Palm Drive Board of Directors."

It was not until I investigated further into the Board assessment of the Gude/Foundation Plan that I learned what has been mysteriously absent from the Sonoma West's editorial page. Or John Eder's email.

This is that Jim Horn's report was one of FOUR assessments made of Dr. Gude's Foundation Plan for the Palm Drive Board on April 23. That two other reports, by Board Member Jim Maresca, and health care expert John Moise, had no problem with the viability of the plan and suggested the Board accept the takeover plan and keep Palm Drive Hospital open.

Moreover, Maresca and Mosie were by far the more experienced analysts of the financial structure of the plan. Neither Horn, who is an engineer, nor Sandra Bouley, a nurse on the Board have any hospital finance experience. Both Maresca and Moise do.

I was disappointed to learn that Council Member Eder neglected to mention that there were other assessments. And that Jm Horn did not mention in his piece that his was one of four assessments, and that two of the others believes the Gude/Foundation should have been accepted.

It does not surprise me that John Eder is defensive about, and wants to support, his wife's challenging and difficult judgments.

What is surprising is that while Board members were angrily accusing Dan Smith and Jim Gude of conflicts of interest, they were having $520 an hour bankruptcy attorney Michael Sweet lecture them, and the public, about the Board's "fiduciary responsibility" to turn down the Foundation plan because it "squandered" tax revenue that a bankruptcy court would require be reserved for creditors.

This advice was misleading and false, as documented in my original post above.

And it was being disseminated by an attorney for the law firm of Fox Rothschild, a firm whose largest banking client is Wells Fargo Bank. Wells Fargo Bank, as I have reported, is the trustee of the largest hospital creditor, its $22.9 million bond holders. The Board, and Palm Drive CEO Tom Harlan, had been advised of a conflict of interest waiver that had been signed so that Mr. Sweet could represent them.

Yet during five public meetings, and to this day, this humongous conflict of interest, the conflict of interest that seems to have induced an attorney to deceive the Board and public to benefit the bond holders at the expense of the taxpaying citizens of the hospital district, was never disclosed by the Board members. Or Palm Drive's CEO. Or Jim Horn.

Why was there no disclosure of the true conflict of interest that determined the rejection of the keep-it-open doctor plan during the April 23 public hearing?

So, when we talk about conflict of interest in the struggle to understand why Palm Drive closed, let's stop deflecting from the facts to scapegoat hard-working volunteer solution creators Dan Smith, or Dr. Jim Gude.

Let's stop talking about a smokescreen.

Let's discuss the conflict of interest that matters.

And what We, the People of West County need to do now to get the Palm Drive District Board to fire Fox Rothschild, and hire a bankruptcy lawyer who will represent us.

Not Wells Fargo Bank.

[Gus diZerega]

Thank you Jonathan and Dan. When I first read the editorial something about it smelled- lots of charges and personal attacks and absolutely no details. The attacks on Dan, who probably more than anyone in the county has historically kept Palm Drive open, called out for details and the lack of them made the author's case suspect.

But I do not know the details so I stayed quiet and hoping for a reply from Dan and Jonathan, which they have given in spades.

Speaking as a political scientist, the editorial was an attempt at Karl Rove-style attacking the opposition by questioning their strengths (MANY YEARS of demonstrated commitment to the community) and changing the subject from the misdeeds of the Board and its lawyer (who it seems to me should be disbarred) to sliming the personal motives of their critics. Further, the editorial projected the sins they are committing (secret agendas) onto others. This is standard operating procedure for those who are powerful and whose actions cannot be justified on their own merits.

Their attempt has backfired by providing more information I had not encountered or had not noticed - the two positive reports - that underline any conceivable excuse for the reckless disregard for public well being on the Board's part.Given the division in the reports wy refuse mediation? There is no honorable excuse.

However this episode does suggest that Sonoma West is as bad at reporting on this issue as some have suggested.

If this is what the allies of the Board can bring forth it proves the weakness of their position and the need for the people of Sebastopol to no longer have them in any position of authority over the hospital.

I admit I am "piling on." But it seems to me nothing short of piling on will work given the obduracy of the Board and its increasingly impossible to defend position.


It was five weeks ago, soon after I started investigating the Palm Drive closing, when I attended the April 23 hearing.

That's when I first started hearing the allegations of "conflict of interest," being leveled by members of the Palm Drive Board toward Jim Gude and Dan Smith....

[Dianala]

I do not trust the news media much these days and that is why I pointed out the headline about the judge "refusing" mediation, when in fact he recommended it.

The hidden agenda and conflict of interest issues are on the District Board's back, not Dan and Dr. Gude's. I agree that there is a lot of deflection going on to get the heat off of them and the lawyer.

The fact that some members of the District Board is making this about Dan Smith (and possibly Dr. Gude) is wrong thinking, and some community members are buying it without paying attention. I remember several Foundation Board members speaking at the last meeting in support of Dr. Gude's plan and the desire to continue negotiations. They were open to flushing out their plan since they only had 10 days to put it together.

It is important to keep an open mind on the Foundation's plan because it is the closest to keeping the local doctors and staff in place and providing the community with the services we want.


[First let me say that I have learned not to respond to attacks like Jim Horn’s because it only gives them more credibility than they deserve. But since I have been asked, I would offer the following:

I first met Dr. James Gude in 2007. I was desperate to get Palm Drive back on its feet...

[John Eder]

My name is John Eder. I am a member of the Sebastopol City Council, and the Council liaison to Palm Drive Hospital. Palm Drive Boardmember Marsha Sue Lustig and I are partners of over a decade. We have both been patients at the Palm Drive Hospital Emergency Room.

The recent closing of the hospital has been a tragedy for our entire community. I have refrained, until now, from commenting on this situation, as efforts are undertaken to understand the forces that have restrained the success of Palm Drive Hospital in the past and craft solutions that will lead to its reopening and future viability.

Like most complex situations, the closure of Palm Drive Hospital is not easily analyzed in terms of black and white. One of the major faults that I find with the Palm Drive Health Care District's Board of Directors is their failure to adequately address the orchestrated campaign of manufactured perceptions being espoused by some members of our community as the only existing version of reality. This attempt to simplify (spin) matters into a "good guys/bad guys" model provides no benefit to our community, and only exploits the lack of understanding and fear possessed by many of our citizens.

“By this time in my life, I am pretty used to being attacked.”- Mr. Smith

For the purposes of responding to this thread, I would like to address the impression being put forth that a failure to agree with one’s position now constitutes an “attack”, as relates to a recent article in Sonoma West (“Palm Drive Foundation proposal not the answer”- see above). It was clear public knowledge that a committee of four individuals, two board members and two citizens, was convened to evaluate the “Foundation’s Proposal” to reopen Palm Drive Hospital. Mr. Horn’s participation in this committee is acknowledged at the bottom of his article. Anyone that was actually following this matter closely and paying attention at the time would have known that. To suggest that there was an attempt to conceal the existence of the other three evaluations is a fabrication and, frankly, laughable- kind of like, “…you didn’t tell me about the other eleven eggs in the carton.”

In his May 7, 2014 Sonoma West editorial, Mr. Horn, who is now being “counterattacked” for his candor, clearly admits to a personal conflict-of-interest; his wife had been a nurse at Palm Drive Hospital for six years. Are we to conclude that Mr. Horn intentionally sought to obstruct the reopening of Palm Drive and prevent the reemployment of his wife by pointing out his concerns with this proposal?

“I can’t see how you turn this into some nefarious plot by the evil Dan Smith, Dr Jekyll/Gude and Mr Scrooge/Minervini-Zick…”- Mr. Smith

One of the main points in Mr. Horn’s article was a concern over conflicts of interest. Dr. James Gude was originally selected as the CEO-designate for the “Foundation’s Proposal”. At the time of Palm Drive Hospital’s closure, he had established contracts valued at many thousands of dollars per month with the hospital. Unlike private businesses, public agencies are highly regulated in the matter of conflicts of interest. Dr. Gude’s contractual relationships with the hospital presented a clear conflict.

But it doesn’t stop there. As pointed out by Mr. Horn, a series of interwoven interests exists between Palm Drive Hospital, Dr. Gude, Mr. Dan Smith and the Palm Drive Health Care Foundation. Mr. Smith owns E-Health Records International (EHRI) in Sebastopol, a developer of EHR (electronic health record) software. Dr. Gude is the founder of Offsite Care (OSC), a Sebastopol-based provider of telemedicine services. According to EHRI’s website (https://ehrinternational.com/about/who-we-are/staff/), Dr. Gude is the Chief Medical Officer on their staff. He is also listed as the Medical Director for OSC (https://www.offsitecare.com/personnel/administrative-personnel). Mr. Smith is shown as the Chairman and CEO of EHRI, and as a member of the Board of Directors for OSC. Ms. Tabitha Bonetti-Asker, the Operations Manager for EHRI is shown as working for OSC as well. In his posting shown above, Mr. Smith states, “So I turned to the best healthcare CPA I know, Glenn Minervini-Zick and asked him if he would look at the finances and see if there was the potential of getting operations to work. Only Glenn could do this because he was the CFO for a few years and has 30 years of healthcare experience for big CPA firms. He is also the best business forecaster I know and was willing to do this for free.” Not mentioned is that Mr. Minervini-Zick is the Chief Financial Officer (CFO) for OSC, which Mr. Horn pointed out in his “attack”. Mr. Mark Lancaster is another employee shared by both EHRI and OSC. He was the Chief Executive Officer (CEO) of the Palm Drive Health Care Foundation in 2010.

“Whenever you speak truth to power, the first response is usually character assassination, which I consider Jim Horn’s piece to be.”- Mr. Smith

In his posting critical of Mr. Horn’s analysis of the “Foundation’s Proposal”, Mr. Smith continues; “As to the offer of free software, I put that in the proposal because I saw it as a possible way to capture the other federal meaningful use money for the hospital. Jim Horn’s fantasy that somehow we were trying to use the hospital as a guinea pig and we were going to somehow use Palm Drive to break into the US market is just that, his fantasy. We have no plans to do this and I always saw this as a transition until the hospital could get back on its feet and afford a US centric system.” There is a problem with this seemingly magnanimous offer. As Mr. Horn reported in his “attack”, this software is currently uncertified in the United States, and, as a result, prevents Palm Drive Hospital from receiving any “federal meaningful use money”. To confirm this fact, I contacted the Center for Medicare and Medicaid Services (CMS) and searched their 2014 Edition Certified Health IT Product List database under “Vendor Name” (E-Health Records International and Offsite Care Resources, Inc.) and “Product Name” (HarmoniMD). In both cases, I received the message: “Your Search Results: No Products Found (https://oncchpl.force.com/ehrcert/ehrproductsearch#results)”.

You can do this yourself at https://oncchpl.force.com/ehrcert/ehrproductsearch. Still wanting to confirm that I was correct, I called the Office of the National Coordinator for Health Information Technology, U.S. Department of Health and Human Services, EHR Information Center, who confirmed that E-Health Records International, Off Site Care Resources, Inc. and HarmoniMD are not in their current certified EHR product database. They further confirmed to me that the use of an uncertified product would disqualify a hospital from qualifying for full CMS EHR Incentive Payments. These are reimbursements to hospitals, “…as they adopt, implement, upgrade or demonstrate meaningful use (https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Meaningful_Use.html) of certified EHR technology”. Please see: (https://www.healthit.gov/policy-researchers-implementers/certified-health-it-product-list-chpl).

I was surprised to see a certificate on EHRI’s website, dated November 2011, that indicated that HarmoniMD EHR software (now shown as a product of OSC) was “Certified by the US Department of Health and Human Services for Meaningful Use Stage 1” by a company called InfoGard. See: https://ehrinternational.com/products/. So I went to Info Gard’s website (https://www.infogard.com/healthcare_it/onc_certification) in attempt to understand this seeming discrepancy. The Info Gard site states “Once InfoGard has certified an EHR system in accordance with applicable standards and certification criteria, InfoGard will submit the information to the ONC for posting on the ONC Certified Health IT Product List (CHPL) (https://oncchpl.force.com/ehrcert)website.” This is the same website referred to above that displays “Your Search Results: No Products Found (https://oncchpl.force.com/ehrcert/ehrproductsearch#results)”. So, the complimentary software offered to Palm Drive Hospital does show up on the 2011 list, but is absent from the 2014 list. I concede that I am not an EHR expert, so any clarification on this matter from either Mr. Smith or Dr. Gude would be very helpful. Based upon available data, EHRI’s primary markets to date appear to be in Africa and Southeast Asia. I have been unable to identify any U.S.-based hospitals that have deployed the Smith/Gude software.

It should be noted that the Palm Drive Health Care Foundation loaned money to Dr. Gude/OSC in 2011, which allowed them to attain their existing certification. In return, OSC committed three years ago to providing the HarmoniMD software to Palm Drive at no cost. See:
https://pdhcf.org/2011/11/02/electronic-medical-record-emr-software/

This never occurred. At the time of closure, Palm Drive hospital was utilizing EHR software developed by McKesson, which was also used by Palm Drive’s strategic partners, Marin General Hospital and Sonoma Valley Hospital, as a way to share and reduce implementation costs. See:
https://www.northbaybusinessjournal.com/52189/palm-drive-to-decide-soon-on-electronic-medical-records/

After CEO-designate Dr. Gude stepped down due to his conflicts of interest, the Palm Drive Foundation introduced a new CEO-designate for their proposal, Dr. Robert Stebbins. As a physician with “extensive hospital administration experience”, according to the Foundation, he appeared to be a great match for their requirements. He was impressive in person- well dressed, articulate and very professional in deportment. He approached my partner after the meeting at which he was introduced, thanking her for her questions regarding the Foundation’s proposal and assuring her that he wanted those concerns to be addressed as well. It was felt that there may be a new positive direction being established with the selection of Dr. Stebbins. You can imagine my dismay when I uncovered, after mere minutes of checking on the web, that he had voluntarily surrendered his medical license in 1997 due to professional/sexual misconduct with two female patients. Please see: https://w3.health.state.ny.us/opmc/factions.nsf/58220a7f9eeaafab85256b180058c032/3c5ebb04634fcca385256a4a0047f13d/$FILE/lc113155.pdf . Thus, he has not been a licensed, practicing physician for seventeen years, a fact borne out by his otherwise impressive resume, which lists no “hospital administration experience”. See: <cite>www.worky.com/robertdeanstebbins (https://www.worky.com/robertdeanstebbins)</cite><cite>.</cite><cite></cite><cite>It should be noted that both of these documents were provided to Mr. Jonathan Greenberg by me via email on May 12, 2014. He subsequently thanked me for providing this information to him.</cite>
<cite></cite>
Perhaps even more troubling was that a number of the Palm Drive Foundation members knew of these past concerns regarding Dr. Stebbins, saw them as inconsequential to his selection, and withheld them from the public and their colleagues. I am unclear if Mr. Greenberg concurs with this assessment, as <cite></cite>his posting of May 20, 2014 stated, “The Foundation’s doctor-led plan wanted to bring in a sharp new CEO,…” I understand that retired Sebastopol Police Officer Dennis Colthurst, a current member of the Foundation, was extremely dismayed after learning of these concerns after the fact. At a recent City Council meeting, Mr. Colthurst, in apologizing to me for the vitriol surrounding the closure of Palm Drive Hospital, indicated that the Foundation recognized that they “…had lost the ability to control Dan Smith.” He concurred with me when I stated that, in his maniacal quest to wrest control of Palm Drive, Dan Smith was willing to not only take down the hospital, but would “blow up your show (the Foundation) as well.”

“I have learned since then that people who give away money are often distrusted by people who can’t see themselves giving money away even if they had it.”- Mr. Smith

One of the major tasks facing anyone undertaking the reopening of Palm Drive Hospital is the need to acquire a substantial amount of capital- millions of dollars. The current administration of Palm Drive recently estimated that $20,000,000.00 will be required in the near term just for infrastructure repair and replacement in the aging facility- not operating costs.

After years of a somewhat adversarial relationship, the Palm Drive Health Care District's Board of Directors determined in January 2014 that a new Foundation was required, one operating under the direction of the hospital and focused on fund-raising. As a result, the District formed a new foundation, independent of the existing one. See: https://www.sonomawest.com/sonoma_west_times_and_news/news/palm-drive-health-care-foundation-looks-ahead-after-split/article_774f8f0e-83b5-11e3-8d05-0019bb2963f4.html

It is my understanding the Palm Drive Foundation, which is advocating for the "Foundation's Proposal", has set a current fundraising goal of $6,000.000.00 to facilitate the hospital’s reopening. This is a daunting goal, given that the Foundation raised approximately $3,000,000.00 between 2002 and 2012, while providing Palm Drive Hospital with approximately $1,200,000.00 in the past 12 years, as reported in Sonoma West on September 11, 2013. See: https://www.sonomawest.com/sonoma_west_times_and_news/news/palm-drive-seeks-foundation-changes/article_0afe4612-1b21-11e3-b98a-001a4bcf887a.html

Per their IRS Form 990, for the 2012 fiscal year, the Foundation had $142,172.00 in revenue, and $217,242.00 in expenses, for a one year loss of $75,070.00. Of these amounts, $63,284.00 was paid out as “Other salaries and wages”. During this fiscal year, the Foundation contributed $102,750.00 to Palm Drive Hospital. See: https://www.guidestar.org/FinDocuments/2012/943/314/2012-943314210-09c62937-9.pdf

Per their IRS Form 990, for the 2011 fiscal year, the Foundation had $281,402.00 in revenue, and $416,362.00 in expenses, for a one year loss of $134,960.00. Of these amounts, $184,615.00 was paid out as “Other salaries and wages”. During this fiscal year, the Foundation contributed $88,294.00 to Palm Drive Hospital. An amount of $39,000.00 was contributed to five other organizations, including Santa Rosa Memorial Hospital ($10,000.00). See: https://www.guidestar.org/FinDocuments/2011/943/314/2011-943314210-089bbf1b-9.pdf

Per their IRS Form 990, for the 2010 fiscal year, the Foundation had $512,561.00 in revenue, and $377,771.00 in expenses, for one year net revenue of $134,790.00. Of these amounts, $130,835.00 was paid out as “Other salaries and wages”. During this fiscal year, the Foundation contributed $81,684.00 to Palm Drive Hospital. Two other organizations received a total of $10,000.00 See:
https://www.guidestar.org/FinDocuments/2010/943/314/2010-943314210-07ad4d72-9.pdf

It need be noted that, despite their losses, the Foundation is not insolvent, and still controls more than $500,000.00 in assets.

By comparison, the Healthcare Foundation Northern Sonoma County, based in Healdsburg, recently concluded a $14.5 million capital campaign to benefit Healdsburg District Hospital. See:
https://www.healdsburgdistricthospital.org/Supporting-Our-Health-Initiatives.html

In a January 22, 2014 Sonoma West article, it was noted that “The Foundation was not set up to launch a capital campaign for the hospital, said Foundation Board President Ed Bauman, in a letter to Sonoma West Times & News.” It continued: A capital campaign “is not the mission of PDHCF,” Bauman wrote. The Foundation’s mission is “to aggregate smaller gifts in order to make new equipment purchases and improvements that are then paid out to the hospital.”

This self-perception on the part of some members of the current Palm Drive Foundation was clearly spelled out in a September 2013 report, commissioned by the Palm Drive Board of Directors, titled: “Leadership Survey on Fundraising for Palm Drive Hospital Final Report of Findings, Observations and Recommendations”. The members of the Board, Foundation and Administration were interviewed. All individual replies were held in confidence. The candid responses were telling- there was a widely-held feeling that the interviewees were not trained for or experienced in fundraising for the hospital, and, in some cases, not that motivated to do so. I have attached a copy of that document to this post.

I anticipate that charges of “Deflection” will be leveled at me as a result of this post-

“Deflect attention from the facts by attacking the messenger of those facts.”- Mr. Greenberg

I also anticipate that I will be accused of “cherry picking” information to put a “spin” on it. I have attempted to assemble information, citing public source materials, which substantiates the observations made by Mr. Horn in his Sonoma West article. I do not see this information as an “attack” or a “character assassination.” I have, I believe, done this without resorting to name-calling, bullying or ridiculing any members of our community. I apologize for the length of this piece, but I hope that it has provided you with important additional facts.

There are many more aspects to this complex situation that need to be looked at, and they will be forthcoming in the near future.

Thank you for your time and interest.

[JimHorn]

Thanks for your thoughtful and thorough post, John. For the record, you and I spoke briefly on the phone yesterday; before then, I didn't know you from a hole in the wall...

When I have time, I hope to respond to some of the comments on my SonomaWest article as well as Mr. Greenberg's articles.

Thanks again...

Jim Horn, PE, LEED AP
Horn Engineers

[Dustyg]

I'm glad that you've stopped making jokes about this serious situation that we are in.


My name is John Eder. I am a member of the Sebastopol City Council, and the Council liaison to Palm Drive Hospital. Palm Drive Boardmember Marsha Sue Lustig and I are partners of over a decade. We have both been patients at the Palm Drive Hospital Emergency Room....

[Barry]

I'm glad that you've stopped making jokes about this serious situation that we are in.

I, for one, have appreciated John's lighthearted comments.


https://igplotzk.files.wordpress.com/2013/10/tph-laughter-is-the-best-medicine.gif?w=640

[Dustyg]

I have a great sense of humor and love to laugh, but perhaps you're not one of the people, as I am and many others, whose life was saved in the ER at Palm Drive. This is no laughing matter.


I, for one, have appreciated John's lighthearted comments...

[Peacetown Jonathan]

I was very pleased to see Council Member John Eder's response earlier today. If we are going to come together as a community to heal the personal and political divisions that have been caused by strong differences of opinions that go back years, we are going to need to communicate openly and clearly, with the the facts that we use to arrive at our opinions.

These differences arise from different perspectives on some enormous, challenging questions: Why did our beloved Palm Drive Hospital close? And, moving from there, whether we can re-open the emergency room and acute care facility that has been an integral part of it for so many years, and saved so many lives? And what this will take? I think that we can. I will continue to advocate, and work for, a re-opening of the hospital with an emergency room.

As part of this collective, democratic process, the presentation of information, like John's important introduction to this public discussion about how much money the physical plant of the building requires, and how much money the Foundation might need to raise, is very helpful. I think that the Foundation team is in the process of reviewing the evolving financial picture of the hospital, and preparing a financial road forward that they believe can be sustainable and successful--with an emergency room. I see the willingness of John, and Jim Horn (from his post above) to engage with the public about their views on this subject as yet another important step forward in the collaboration that will be necessary in the challenging months ahead.

In this spirit of informed public debate in a civil manner, John asks whether the "sharp new CEO" I referred to in my post referred to Dr. Stebbins.

No, it was not. Dr. Stebbins was brought in on the spur of the moment by Dr. Gude when Dr. Gude was challenged to not be part of administration. The moment the Foundation learned of Dr. Stebbins record, they dropped him from consideration. This was many weeks ago, at a meeting between the Foundation and Board. I am referring to the Foundation plan to find a CEO with a lot of business, hospital administrative and marketing experience. By its nature, this "who will be the new CEO" is a chicken and egg dilemna , because someone like this is probably working elsewhere right now--and a re-opened Palm Drive is not ready to start paying this person.

I look forward to John and Jim sharing their insights with our community. And working together the many diverse people in our community who are going to need to come together to re-open Palm Drive Hospital.



My name is John Eder. I am a member of the Sebastopol City Council, and the Council liaison to Palm Drive Hospital. Palm Drive Boardmember Marsha Sue Lustig and I are partners of over a decade. We have both been patients at the Palm Drive Hospital Emergency Room.

The recent closing of the hospital has been a tragedy for our entire community. I have refrained, until now, from commenting on this situation, ....

[Dianala]

You have provided a great deal of information about Palm Drive Foundation and it's operations, current approach and differences, Dr. Gude and Dan Smith, fundraising abilities, etc.

What is your knowledge of the current conflict of interest issues between the District Board and with the Wells Fargo trustee relationship, their current attorney and PR consultant? If you are the City's liaison, I expect you to offer complete information so the community can receive a well rounded set of facts.

Deflection is a one-sided approach, and I do hope you are willing to approach this very complex set of circumstances from the best set of facts available to you, and what you can continue to uncover based on the community's questions and concerns about the sudden closure, hidden agendas and conflict of interest issues related to the District Board. Many of us feel duped and have lost a great deal of confidence in the current elected officials.


My name is John Eder. I am a member of the Sebastopol City Council, and the Council liaison to Palm Drive Hospital. Palm Drive Boardmember Marsha Sue Lustig and I are partners of over a decade. We have both been patients at the Palm Drive Hospital Emergency Room.

The recent closing of the hospital has been a tragedy for our entire community. I have refrained, until now, from commenting on this situation, ...

[theindependenteye]

Like Jonathan Greenburg, I’m encouraged to see responses about Palm Drive from people who have at least some tangential connection with the situation. That’s been sorely lacking. If some critics have been personally harsh, it’s quite possibly due to what I’ve perceived (as a mere citizen) as an exasperating stone-walling on the matter. I would imagine the District Board members have had legal advice not to discuss the matter: intelligent advice from a legal standpoint, outrageously stupid in terms of relations with the people who elected them.

What I haven’t heard from Mr. Horn or from Mr. Eder is any response to these questions:


What plan does the District Board have to restore these health care services to the region? What process are they in for developing such a plan? Who’s involved? What’s the timetable? Is the District Board actually drafting such a plan or simply seeking to mollify the bondholders?



Any response to the far more questionable “conflict of interest” suggested by Jonathan Greenburg in relation to Wells Fargo Bank and the active attorney?



Mr. Horn states his opinion that the Foundation proposal is fatally flawed and not worth further consideration. But he states no specifics. Instead, he and Mr. Eder go into excruciating detail on hypothetical collusions, software licenses, etc., which, as far as I can tell, are pretty much beside the point. So what’s lacking in the Foundation’s proposal, and what can be done to improve it?



Why has the District Board proceeded in a manner wherein they seem to assume that their electoral mandate is to make all decisions on the fate of Palm Drive with virtually no input or notice to their constituency? Is there some way for those people to move out of this bunker mentality?


I realize this last point seems to be Attack Mode, and I’m sorry for that. I’ve been close a number of nonprofit boards in crisis mode (in the arts arena), and the pressure can make very bright, dedicated people act in magnificently stumble-bum ways -- especially when “fiduciary liability” snarls from the depths. I can see how District Board members would feel they’re under personal attack, but I fear that they can’t see the utter frustration -- from their failure to communicate forthrightly -- that induces it.

I’m hoping, in posting this, not to intensify the polarization but to bring the discussion around to dealing with the questions that, I think, are in the minds of a number of people in this forum.

Respectfully—
Conrad Bishop

[farmerdan]

John,

Rather than refuting anything you have said, I offer the following:

Editor: On May 22, at a special Board of Directors meeting of the Palm Drive Health Care District, dealing with closure of Palm Drive Hospital, an important issue, related to the health and well-being of our community, was not addressed: acute stroke. Nobody considered the time factor going from the West County to Santa Rosa with a stroke. A 30-minute trip will “cost” about 6 billion brain cells. And that assumes that the receiving hospital in Santa Rosa is anywhere near as good as Palm Drive has been in rapid evaluation and treatment of acute strokes. Sutter doesn’t have a stroke program, Memorial gives trauma first priority and Kaiser, while good, is further away. Every paramedic and every 911 operator knows “time is brain” and will direct you to the closest facility that “knows how.” Palm Drive Hospital served that critical role in the County. We “know how.” We did not merely stabilize for transfer. We provided the definitive treatment, faster than any facility, including the university hospitals in San Francisco. We were in the top 6 percent of hospitals nationally in stroke treatment. We had a grant from the NIH for stroke research, the smallest hospital in the country to get one. We were up there with UCSF, Mayo Clinic, Duke and Harvard. We were that good. It really hurt me to have to inform the NIH that someone pulled the plug on the hospital “that could,” and that I would have to withdraw Palm Drive from the research program. Ask some of the people from the Grove who needed stroke care during their encampments. Their houses are bigger than our hospital, and their names are on the buildings of major medical centers. Our stroke care was better. It needs to be reestablished.

Allan L Bernstein MD
Medical Director of stroke programs,
Palm Drive Hospital and Healdsburg District Hospital

I now know it is inevitable that the hospital will reopen with full Emergency Room and Acute care. This is what we are paying taxes for, it's what the community needs to be safe and secure, and the will, intellectual capital and financial capital is here to do it. The sooner we stop talking about WHO did what in the past that pissed us off or WHO might have a conflict of interest or WHO will operate it and start talking about HOW we will work together and HOW we will reopen Palm Drive, the sooner it will happen.

I hope you and Marsha will join this effort and firmly believe that you will.
I would be pleased to work with you.

farmerdan

[Dianala]

Thanks, Dan. Working together is the ideal goal for sure. Has the District Board stated they will make sure an ER will be included in the plan?

Also, just an FYI, Kaiser Santa Rosa is a certified Stroke center (it is the top level of certification), but that doesn't help non-Kaiser patients, or Kaiser patients with acute stroke and heart attacks that require the most immediate response. Also, with Sutter moving to the north end of Santa Rosa, that puts another ER further out from the Hwy. 12 corridor. It will be closer to the River residents, in reality.

Let's keep the faith that this will resolve with a way to support an ER and acute care facility.


John,

Rather than refuting anything you have said, I offer the following:...

[farmerdan]

Dianna,

The district board voted 4-0 to continue discussions to reopen services.

That being said, it is somewhat unclear what this means or if the district board has any plans for specific services like ER. We have learned that the foundation is the only organization proposing ER and acute Care.

Another way to think about this is that there is a hospital sitting there (closed) with an acute care license and mostly all the equipment in place. You don't have to build one like Sutter and Willits are doing. You don't have to go through licensing. You also have $2 million in tax money to support the operations, capital improvements, and major medical equipment. You have a fabulous team of doctors like Allan Bernstein, Jim Gude, Dr. Powers, Mike Bollinger, Dr Gonzales, Dr. Crane, Dr. Betz and many others and the best nurses in the county just waiting for you to reopen. You have overwhelming community support. You have a 70 year history of excellence.

Given all this, can you create a business model for a small acute care hospital that works?
Yes we can. Yes we will. It is only a question of when.

farmerdan

[twodogs]

Just ask winery owner Mike Martini how grateful he is for Palm Drive's quick intervention saved him from a paralyzing stroke.

John,

Rather than refuting anything you have said, I offer the following:

[farmerdan]

Just ask winery owner Mike Martini how grateful he is for Palm Drive's quick intervention saved him from a paralyzing stroke.

Thanks for bringing this up. Mike is only one of many. My neighbor would be in a wheel chair right now but is out in her yard gardening instead.

We can reopen Palm Drive and we will.
It is only a question of when and how.

[Barry]

In addition to the unusually conciliatory posts here recently :waccosun:, there's another positive development in the Palm Drive Hospital saga... From the PD yesterday (May 30th):

Palm Drive Hospital debt relief bill heads to Gov. Brown's desk (https://www.pressdemocrat.com/article/20140530/articles/140539968)

A state bill that would allow the shuttered Palm Drive Hospital to save millions of dollars in bond debt was approved by the California Legislature Thursday and is now before Gov. Jerry Brown.

AB 582, by Assemblyman Marc Levine, D-San Rafael, would allow the Palm Drive Health Care District to refinance $20 million of its existing bond debt, resulting in lower interest rates that would save the district $6.5 million, according to Levine's office.

The refinancing would also free up to $3 million in security funds.

Continues here
(https://www.pressdemocrat.com/article/20140530/articles/140539968)
There's also a Palm Drive Health Care District Board of Directors Meeting this Monday, June 2nd at 6pm at the Sebastopol Center for the Arts on High Street. Lot's more info about that here. (https://www.waccobb.net/forums/showthread.php?105579-Palm-Drive-Health-Care-District-Board-of-Directors-Meeting&p=180222#post180222)


And the Palm Drive Health Care Foundation is having a meeting the following Monday, June 9th, at the Community Church. More info is here. (https://www.waccobb.net/forums/showthread.php?105580-Palm-Drive-Health-Care-Foundation-Open-Our-Hospital-Community-Meeting&p=180224#post180224)

[Barry]

Did anybody out there go to this Palm Drive Health Care District Board Meeting last night (Monday)?

If so, can you share anything about it with us??

Barry



PALM DRIVE HEALTH CARE DISTRICT
BOARD OF DIRECTORS MEETING

MONDAY, JUNE 2, 2014

(Full Packet with lots of info is here (https://img838.imageshack.us/img838/3969/8l1.pdf))

[Sara S]

It was rescheduled.... [No! See below -Barry ]

[scamperwillow]

Nope - not rescheduled. I was there at the very end so can't really report, but it was way more polite and sedate than the last one.


It was rescheduled....

[Peacetown Jonathan]

I was not at Monday's Palm Drive District Board Meeting, but I have spoken to three people who were. It was indeed polite. It ended with departing CEO Tom Harlan holding up an Open Our Hospital button, and saying, 'I want to open the hospital too."

I just saw Tom outside the hospital. He shook my hand and repeated his desire to find a way to reopen, while expressing sincere sadness that the hospital is closed. He said that this has been one of the most difficult experiences of his life.

It think there is a growing consensus in the community that we need to reopen with an emergency room, and that we are going to need to work together to make this happen. I have been impressed with the progress and new thinking that the Board effort, led by Jim Maresca, has started to make with the Foundation. As well as the big picture strategic thinking that the Foundation effort has embarked upon.

The public will have a chance to hear about this at the Town Hall meeting at the Community Church of Sebastopol (1000 Gravenstein) next Monday, June 9, at 7 pm

I am by nature more of an optimist, and a solution-seeker, than a critic.

Nonetheless, during the past month, I have worked to provide factual, strong criticism, and the transparency and accountability that reporting new information brings, to an issue that is vital to our public interest.

I think something has been, and continue to be, achieved in this reporting and discussion process here at WaccoBB.net, a 21st century forum for community dialog and disclosure.

At this stage, I am shifting most of my focus, and time, to working on the challenging road ahead, to helping the collaboration underway to develop and express a solution to our closed hospital.

It feels to me that re-opening Palm Drive as a financially sustainable hospital, with a life-saving emergency room and acute care facility, is not only likely, but inevitable.

Provided that our community works together to make this our reality.

I feel this bridge to somewhere is being built right now.

I am committed to being part of it. And hope that you are, too.

[Dianala]

This is great to hear as I have been very concerned as well that we are without an ER for a district with over 60,000 residents. On Sunday I stopped to speak with an ambulance driver who was on duty and waiting for a call and I asked him what the impact has been from his point of view. He stated that it was very sad that the ER is closed and he said... "You won't believe how many more miles this ambulance has put on the road this past month or so, and how much more time is spent on the road instead of at the ER." He wholeheartedly hopes that the community can come together and open the ER again soon.

I think we are getting past the "shock" period and getting down to business on a solution. That is much needed for this to work and I certainly hope the District Board members are sincere about opening the hospital again as well.



I was not at Monday's Palm Drive District Board Meeting, but I have spoken to three people who were. ...

I feel this bridge to somewhere is being built right now.

I am committed to being part of it. And hope that you are, too.

[arthunter]

the website:

https://openourhospital.com/

I was not at Monday's Palm Drive District Board Meeting, but I have spoken to three people who were. It was indeed polite. It ended with departing CEO Tom Harlan holding up an Open Our Hospital button, and saying, 'I want to open the hospital too."

I just saw Tom outside the hospital. He shook my hand and repeated his desire to find a way to reopen, while expressing sincere sadness that the hospital is closed. He said that this has been one of the most difficult experiences of his life.

It think there is a growing consensus in the community that we need to reopen with an emergency room, and that we are going to need to work together to make this happen. I have been impressed with the progress and new thinking that the Board effort, led by Jim Maresca, has started to make with the Foundation. As well as the big picture strategic thinking that the Foundation effort has embarked upon.

The public will have a chance to hear about this at the Town Hall meeting at the Community Church of Sebastopol (1000 Gravenstein) next Monday, June 9, at 7 pm

I am by nature more of an optimist, and a solution-seeker, than a critic.

Nonetheless, during the past month, I have worked to provide factual, strong criticism, and the transparency and accountability that reporting new information brings, to an issue that is vital to our public interest.

I think something has been, and continue to be, achieved in this reporting and discussion process here at WaccoBB.net, a 21st century forum for community dialog and disclosure.

At this stage, I am shifting most of my focus, and time, to working on the challenging road ahead, to helping the collaboration underway to develop and express a solution to our closed hospital.

It feels to me that re-opening Palm Drive as a financially sustainable hospital, with a life-saving emergency room and acute care facility, is not only likely, but inevitable.

Provided that our community works together to make this our reality.

I feel this bridge to somewhere is being built right now.

I am committed to being part of it. And hope that you are, too.

[JimHorn]

Thanks, Barry.

About a month ago I wrote this commentary (https://www.sonomawest.com/sonoma_west_times_and_news/opinion/editorials/palm-drive-foundation-proposal-not-the-answer/article_85932e2a-d61e-11e3-9ea9-001a4bcf887a.html)about Palm Drive Hospital for Sonoma West that can be found here.

In that commentary, I discussed some of my concerns with the Palm Drive Health Care Foundation’s proposal to run the Hospital. Within 12 hours of your posting, responses appeared on your site from Jonathan Greenberg and Dan Smith, among others, accusing me of conspiring with the Palm Drive District Board of Directors, Sonoma West, and other dark forces to shut down the Hospital.

Conspiring to shut down the Hospital? Really? My wife has worked at the Hospital as a staff nurse for the last six years, so its closure has meant the loss of her job and our health insurance. I must be the dumbest co-conspirator ever….

And my relationship with the Board? Back in 2010, when I ran against Nancy Dobbs and Chris Dawson for one of their seats, I was soundly thrashed. Hardly the start of a beautiful friendship…

Did I collaborate with the Board to close the Hospital? Not even close...

When the topic of closure was first presented at the Board meeting on April 1 of this year, I suggested from the audience that the Board postpone its decision to allow more time to explore alternatives. The Board eventually agreed.

After that meeting, I filed a California Public Records Act request with the District for the “Alvarez” reports (confidential financial studies prepared for the Board about ways to keep the Hospital operating). The District complied. Once obtained, I emailed the Alvarez reports to everyone on the Board’s agenda distribution list, so folks could review them before the next meeting.

In my email disseminating the Alvarez reports, and in my Sonoma West commentary, I stated my belief that discussion of major restructuring and closure of the Hospital should have occurred in open rather than closed session. The potential bankruptcy, on the other hand, clearly was a legitimate topic for closed session.

I suspect that the closure and the bankruptcy were intimately related in Board members’ minds, and they may have received legal advice that they could not discuss the one in open session without compromising the other. Regardless, I’m certain that the Hospital and the community would have benefitted from an open discussion of potential closure much earlier than April 1.

So why did I write the article in Sonoma West? After thoroughly reviewing the Foundation’s proposal as a member of the evaluation committee, I felt that there were significant problems with its management and financial plan as well as potential conflicts of interest with the proposed Hospital CEO and CFO. Unless those problems could be resolved, I didn’t believe it was prudent for the Board to turn over Hospital management to the Foundation.

You can read my full committee evaluation here (https://www.hornengineers.com/Horn_Evaluation_20140421.pdf):

Unfortunately, many people took the Foundation’s proposal as Gospel without really studying it, and they ascribed ulterior motives to the Board (and anyone else) for not immediately accepting it. Greenberg, for example, has written two articles that accept without question the Foundation’s plan. Unfortunately, he’s saving an actual review of the Proposal for a future article! Isn’t that a bit backwards?

Please note that my original evaluation didn’t dismiss the Proposal outright. It began like this:

The Palm Drive Health Care Foundation Proposal is well-written, well-organized and provides substantially all information requested in the District’s RFP. I recommend that it be considered carefully by the Board. However, I do not believe it makes a convincing case for the Hospital’s long-term financial viability under Foundation management.

The Hospital’s administrators also presented an evaluation of the Proposal that can be found here (https://www.hornengineers.com/PDH_Memorandum_re_PDHCF_proposal_4-22-2014_FINAL.pdf):

As Greenberg and Smith pointed out, two of the committee evaluators (Jim Maresca and John Moise) scored the Proposal higher than the other two (Sandra Bodley and me). However, much of the difference resulted from our differing approaches: the higher evaluators gave full points for the existence of various components in the Proposal (“financial plan, check; CEO listed, check…”), while the two lower evaluators deducted points if those components, while present, appeared problematic.

Of course, according to Greenberg, I wasn’t really qualified to evaluate the Foundation’s proposal in the first place because I’m just an engineer (and Bodley just a nurse…). I disagree.

Since graduating from Caltech, I’ve been a mechanical engineer in California for 33 years, the last 28 as head of my own firm. Prior to the Great Recession, I had 14 employees and worked on projects throughout California. I have extensive experience owning and managing a business.

During my career, I’ve helped design dozens of health care projects, including construction at Kaiser, Sutter, Ukiah Valley, Sonoma Valley and Mendocino Coast hospitals. I’m familiar with many of the intricate and expanding regulations and restrictions that hospitals face, even the smallest hospitals like Palm Drive. I also understand the enormous maintenance and facilities challenges at Palm Drive. (One reason the Foundation’s proposal to save money by laying off the entire maintenance staff made no sense to me!)

In addition, I’ve been a board member in the Gravenstein public school district for 12 years, serving seven years as board president. I’m familiar with public contracting and conflict of interest regulations, financial statements, and government codes and regulations. I know how a successful, multi-million dollar public enterprise is run. (And unlike Mr. Smith, I firmly believe that a public district that uses public funds, whether for education or health care, requires a publicly-elected board to oversee its operations.)

Last but not least, my wife Susan has been a registered nurse for 35 years, including six years at Palm Drive. For my money, if you want to know how a hospital really works, ask a staff nurse, not a doctor. My wife has helped me understand how the medical-surgical wing—the heart of our “famously caring” Hospital—operates. (That’s why the Foundation’s plan to slash the med-surg unit to three beds made no sense, when the average daily census was about nine patients and it often served 10 patients or more on the busiest surgery days.)

But instead of trying to rebut my specific concerns, Greenberg and Smith attempted to “deflect attention from the facts by attacking the messenger of those facts.” They accused me of “character assassination” and making “allegations of corrupt intentions.” Unfortunately, they both appear to misunderstand what a “conflict of interest” means with respect to public officials in California. This confusion is curious for an experienced journalist like Greenberg and remarkable for Smith, who was forced to resign from the Palm Drive board of directors less than three years ago over the same conflict.

Please understand: conflict of interest laws have nothing to do with a public official’s honesty or integrity. Rather, they have everything to do with the official’s position. The purpose of these laws is to help public officials avoid situations where their decisions “will have an important impact” on their economic interests.

In the Foundation’s original proposal, both Dr. Gude, the proposed CEO (who is a wonderful doctor, according to my wife), and Glenn Minervini-Zick, the proposed CFO (who is a good guy, according to a friend), would have had obvious and unavoidable conflicts of interest in those positions. Gude’s company, Offsite Care, contracted with Palm Drive to provide medical services. As a result, both Gude and Minervini-Zick, Offsite’s CFO, would be precluded from holding management positions with our public hospital.

These conflict of interest restrictions apply to “individuals who make or participate in making governmental decisions that could affect their personal economic interests.” They apply equally to Board members--as Smith, an investor in Offiste, learned three years ago when forced to resign--and to key administrators like CEO’s and CFO’s. You can visit the Fair Political Practices Commission’s website (https://www.fppc.ca.gov/INDEX.php?id=500)for more information.

To his credit, Dr. Gude quickly acknowledged his potential conflict at the April 23 Board meeting and publicly removed himself from consideration for the future CEO position. Unfortunately, both Greenberg and Smith apparently missed that memo, instead claiming indignantly that my original concerns “rang hollow” and constituted “abuse” of poor Dr. Gude. Sadly, Gude’s suggested replacement as CEO proved unsuitable for different reasons, as John Eder has detailed elsewhere.

Crucially, neither Gude nor his ill-fated successor possess the “minimum of 5 years of successful management of a small hospital as a CEO” that the Foundation sought in a want ad (https://www.hornengineers.com/Craigslist_Small%20Hospital%20CEO_20140514.pdf) posted on Craigslist about three weeks ago.

Perhaps the Foundation lifted these criteria from an unanswered question I posed in item #6 of my original evaluation?:


What recent, relevant experience (especially in the last five years) do members of the proposed team have at their proposed positions in managing an acute care hospital in California?

I’d also like to offer few comments on some of Greenberg’s biggest bogeymen. First, let’s examine the alleged conflict of interest of the Board’s bankruptcy attorney, Michael Sweet. His firm apparently represents both the Palm Drive District and Wells Fargo Bank (which serves as trustee for payments to some of Palm Drive’s bondholders). I’m not an attorney, but I have been a party in cases where my attorney also represented another related party. In those cases, assuming the parties deemed the conflict inconsequential, both signed waivers that recognized the joint representation, and the potential conflict was removed. Greenberg quotes Sweet that such waivers are in place in this case and doesn’t offer anything to dispute that statement.

So where’s the beef? Greenberg maintains that the Board conspired with Sweet and Wells Fargo (using its secret “shutdown playbook”) to close the Hospital while maintaining the parcel tax that’s used to pay back the bondholders. But this alleged tactic makes absolutely no sense. In fact, the Hospital’s closure is the single biggest threat to maintaining the parcel tax and keeping the bondholders happy. Already, Smith has promised a campaign to repeal the tax if the Hospital isn’t reopened soon, presumably under the Foundation’s control. The surest way for the Board to maintain the parcel tax in place and keep the bondholders happy was to keep the Hospital open--even if it meant giving the Foundation a crack at running it with a flawed plan. If anything, Wells Fargo would be pushing to keep the Hospital open, not closed.

Also, those threatening to repeal the tax need to remember that a parcel tax takes a 2/3 majority vote to pass but only a simple majority to repeal. Given all of Palm Drive’s challenges--two bankruptcies, the current acrimony, the growing Kaiser enrollment, the new Sutter opening, etc.--anyone who wants the Hospital to reopen in the future and have that tax money available, regardless of who runs it, should be very cautious about pushing to repeal the tax now.

Greenberg and Smith also have accused attorney Sweet of lying to the Board and the public about proper uses for pre-bankruptcy accounts receivable. I’m not a bankruptcy attorney; of course, neither are Greenberg and Smith. But I do know that the Palm Drive District uses an “accrual” rather than a “cash” basis for its accounting. This means that Income, such a patient’s bill, is counted as soon as it’s earned and not later, when it’s actually collected. The same goes for Expenses, which count when first charged and not later, when actually paid for.

No one disputes that income the District earns after the bankruptcy filing can be used for any legitimate business purpose the Board chooses, including running the Hospital. The dispute is over income that was earned before the bankruptcy but not collected until after. Obviously, were I a creditor of the Hospital (as are many local business and many former Hospital employees), I probably would want that pre-bankruptcy money to be used first to pay what is already owed to me. Sweet says that spending the pre-bankruptcy money must be approved by the judge as part of the bankruptcy plan to repay creditors. I suspect that he’s correct.

Greenberg disputes that position, primarily by quoting David Heaslett, the attorney who handled Palm Drive’s previous bankruptcy. But read Mr. Heaslett’s quote carefully: “In all the cases that I have done, we have used some of the future revenue to operate the hospital.” In fact, Heaslett does not contradict Sweet’s position on “past” revenue at all. Greenberg offers no other evidence to support his claim that I can see.

This leads to my final comment about Greenberg’s articles—his relentlessly partisan tone. In his writings and commentary on this issue, the world is divided into two camps: heroes and villains. Greenberg always ensures that we know which is which. Attorney Sweet, a villain, is repeatedly described as “slick,” a “shark,” ”sharply dressed” (an attorney’s customary uniform, isn’t it?), and “San Francisco based” (as was the Foundation’s attorney, who presumably was also sharply dressed?).

Attorney Heaslett, a hero, is called “independent” and ”a small town attorney”—twice. (I assume Heaslett dresses like a slob and avoids San Francisco like the plague, but Greenberg doesn’t say for sure...)

Greenberg hyperventilates about a “secret shutdown playbook” that was “mysteriously” prepared by a PR firm called Young + Company—obviously another villain. According to Greenberg, the firm “suspiciously” has no website, business address or phone number. Oddly enough, although I am merely an engineer and not a “professional investigative journalist,” it took me about thirty seconds to find the firm’s website (which lists Dry Creek Inn and Sonoma Valley Inn as clients) and a Facebook page with entries dating back to September 2013. Both sites list a phone number. Neither site lists a physical address, but then neither does Greenberg’s own--not particularly mysterious in this Internet age…. (to see Young’s mysterious web sites, visit here (https://www.facebook.com/pages/YoungCompany/200607583444527)and here (https://www.yocopr.com/).

The “shutdown playbook” (a phrase Greenberg uses 11 times in the article, just so we don’t forget it) is actually a Proposal for PR services to help the District manage its bankruptcy and the Hospital’s shutdown. It was dated March 23 and signed on March 25, 2014—less than a week before the District publicly announced its bankruptcy and closure plans. Since the potential bankruptcy had not yet been announced, the “mysterious” phase “Privileged and Confidential / Prepared at Request of Counsel” is not mysterious at all—as noted earlier, potential bankruptcy is a legitimate topic for closed Board meetings and confidential documents.

None of the PR firm’s proposed services is particularly earth-shattering either—“lay the foundation for a bright future for Palm Drive” and “protect the parcel tax income,” for example. I’ve already discussed the importance of the parcel tax for anyone who wants the Hospital to succeed. I think we all hope for a bright future for Palm Drive.

Now, your readers might ask, “This is all in the past, isn’t it? The Foundation is preparing a new “better than ever” Proposal (per the Foundation’s Gail Thomas), so why do we care about the old Proposal?”

Why? Because the Foundation and some of its supporters (including Greenberg) have maintained loudly and relentlessly that the Board had no legitimate reason to balk at the Foundation’s original proposal. Board members have been called lazy, incompetent, criminally negligent, murderers… take your pick. As discussed above, I believe there were significant problems and concerns with the Foundation’s original Proposal, and the Board was prudent to tread carefully.

And if the Board doesn’t immediately accept the next Proposal, I suspect the same charges will be leveled against Board members. But those who truly want the Hospital to succeed over the long run should examine the next Proposal just as closely as the last.

[farmerdan]

Jim,

Your continual insistence that there are conflict's of interest in the physician/foundation plan are absurd. You ran for the district board when your wife worked at Palm Drive. You didn't think this was a conflict when half of your family income was being paid by the hospital? Wow! Amazing!

But let's get real: People are DYING and being PERMANENTLY DISABLED because Palm Drive is closed. Our police and fire departments are unable to handle having to get in line in Santa Rosa hospitals. People are having 10 hour waits in the Santa Rosa ERs just to get seen! As Dr. Bernstein pointed out, 30 minutes is 6 billion brain cells (6,000,000,000) when you have a stroke. If you have sepsis and are not treated within a few hours, YOU DIE as recently happened to a Bodega resident. If you have a severe heart attack, a ruptured tubal pregnancy, a dissected aorta, a bleeding ulcer, a stroke, or any of hundreds of other conditions, you will NOT MAKE IT TO SANTA ROSA.

If you have a better plan to reopen Palm Drive, let's hear it now! We will be happy to support it with money, time and IT services! The foundation has made VERY clear that they will support ANY PLAN that reopens Emergency Services, Acute Care, and Medical Services for the community's benefit. The word is ANY!

Given that the district has closed the hospital, lost the MediCare billing and shows NO SIGN of putting forth a plan to reopen, the foundation is working to develop a sustainable business plan. This is not something that can be done in one week or one month and will require a lot of work. Unless and until a better plan emerges, we will continue to support this effort, which, by the way is being led by the Palm Drive DOCTORS and the FOUNDATION, not Dan Smith or Jonathan Greenberg.

farmerdan

[JimHorn]

Dan -

My comments on potential conflicts of interest in the Foundation's original plan were and are valid. As I've said repeatedly, a potential conflict doesn't make you a bad person--it just means that you can't hold a particular position under California law. Dr. Gude has already recognized his potential conflict; why can't you?

As far as my unsuccessful run for the Palm Drive Board four years ago, I remember your accusations about my "conflict of interest" at the time. You were wrong then, and you're still wrong now. Please read Government Code 1091 (1091.5(a)(6) to be exact, linked here (https://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=01001-02000&file=1090-1099)). This is what it says:

1091.5. (a) An officer or employee shall not be deemed to be interested in a contract if his or her interest is any of the following:

(6) That of a spouse of an officer or employee of a public agency in his or her spouse's employment or officeholding if his or her spouse's employment or officeholding has existed for at least one year prior to his or her election or appointment.

My wife had worked at the Hospital for more than a year when I first applied for a Board position--so no conflict. This situation isn't uncommon for school boards in small communities, for example, where the school district may be the area's biggest employer. Had I joined the Board, I would have had to recuse myself from voting on anything that affected my wife as an individual like a promotion or disciplinary action. But I could have legally and ethically served with that restriction.

So, please, no more distractions.

As detailed in my committee evaluation and subsequent articles (which neither you, nor Mr. Greenberg, nor anyone else have addressed), I don't believe the original Foundation proposal was a viable plan to keep the Hospital open and solvent. That doesn't make me a bad person--just a cautious one (a necessary survival skill for an engineer).

I hope tonight's reboot is "better than ever" per Gail Thomas, and if it makes sense for the entire District, I will support it.

But I don't have a plan myself. That doesn't mean I lose my right to engage in a public discussion on the issue. Given all of the challenges faced by a small acute care hospital in our area, I don't know if such a plan is even possible. You, and many others, are supremely confident that it can be done. Unfortunately, supreme confidence isn't a business plan...

See you tonight...


Jim,

Your continual insistence that there are conflict's of interest in the physician/foundation plan are absurd. You ran for the district board when your wife worked at Palm Drive. You didn't think this was a conflict when half of your family income was being paid by the hospital? Wow! Amazing!

But let's get real: People are DYING and being PERMANENTLY DISABLED because Palm Drive is closed. Our police and fire departments are unable to handle having to get in line in Santa Rosa hospitals. People are having 10 hour waits in the Santa Rosa ERs just to get seen! As Dr. Bernstein pointed out, 30 minutes is 6 billion brain cells (6,000,000,000) when you have a stroke. If you have sepsis and are not treated within a few hours, YOU DIE as recently happened to a Bodega resident. If you have a severe heart attack, a ruptured tubal pregnancy, a dissected aorta, a bleeding ulcer, a stroke, or any of hundreds of other conditions, you will NOT MAKE IT TO SANTA ROSA.

If you have a better plan to reopen Palm Drive, let's hear it now! We will be happy to support it with money, time and IT services! The foundation has made VERY clear that they will support ANY PLAN that reopens Emergency Services, Acute Care, and Medical Services for the community's benefit. The word is ANY!

Given that the district has closed the hospital, lost the MediCare billing and shows NO SIGN of putting forth a plan to reopen, the foundation is working to develop a sustainable business plan. This is not something that can be done in one week or one month and will require a lot of work. Unless and until a better plan emerges, we will continue to support this effort, which, by the way is being led by the Palm Drive DOCTORS and the FOUNDATION, not Dan Smith or Jonathan Greenberg.

farmerdan

[farmerdan]

Jim,

I quote you: "Dr. Gude has already recognized his potential conflict; why can't you?"

I am not an officer of the district nor a board member of the foundation nor do I intend to be either. I am a major donor and volunteer. Please explain how this creates a conflict of interest. I am still baffled by how you can come up with this logic.

Dan

[JimHorn]

I guess I should have written "why can't you recognize his conflict of interest?" Sorry, I thought the last five words were understood.


Jim,

I quote you: "Dr. Gude has already recognized his potential conflict; why can't you?"

I am not an officer of the district nor a board member of the foundation nor do I intend to be either. I am a major donor and volunteer. Please explain how this creates a conflict of interest. I am still baffled by how you can come up with this logic.

Dan

[farmerdan]

Jim,

Ok, so you are NOT claiming that I or Glenn have a conflict of interest, just Dr. Gude.
That was VERY unclear in your earlier posts.

So, here is what you need to know: When Dr. Gude offerred to be the INTERIM CEO (until someone more qualified could be hired), it was with the understanding that OffsiteCare, Jim's company would have to DONATE all of its services to Palm Drive going forward. Jim was willing to do this to save the hospital at great expense to himself.

What we were not aware of at the time was that he would have had to have stopped providing care a year earlier to avoid a conflict. (Remember, we only had 1 week to put together a proposal, not enough time to do any legal research.) When we heard from Colin Cofffee at the start of the meeting that this was the case, we immediately changed course. Unfortunately, we did not have time to get another CEO lined up 5 minutes before a meeting and so asked Dr. Stebbins to stand in, not the best choice as we found out later. If you recall from the meeting, we did not even have a chance to tell Dr. Gude, who discovered that he had been 'fired' during the meeting.

You should now understand that I was the FIRST person to become aware of the conflict Dr. Gude would have and acted on it immediately. So your statement "why can't you recognize his conflict of interest" is deserving of at least a retraction.

farmerdan

[JimHorn]

Dan -

I have to work for a living, so here goes...

No, I still believe that Glenn Minervini-Zick would have a conflict of interest serving as Hospital CFO and an employee of OffsiteCare;

No, the original Foundation proposal said absolutely nothing about Offsite Care donating its services to the Hospital (I just rechecked);

So no, I'm not retracting my previous comments.

Over and out...


Jim,

Ok, so you are NOT claiming that I or Glenn have a conflict of interest, just Dr. Gude.
That was VERY unclear in your earlier posts.

So, here is what you need to know: When Dr. Gude offerred to be the INTERIM CEO (until someone more qualified could be hired), it was with the understanding that OffsiteCare, Jim's company would have to DONATE all of its services to Palm Drive going forward. Jim was willing to do this to save the hospital at great expense to himself...

[John Eder]

Jim,

Your continual insistence that there are conflict's of interest in the physician/foundation plan are absurd. You ran for the district board when your wife worked at Palm Drive. You didn't think this was a conflict when half of your family income was being paid by the hospital? Wow! Amazing!

But let's get real: People are DYING and being PERMANENTLY DISABLED because Palm Drive is closed...

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Most holders of elected office in California are legally required to complete a Fair Political Practices Commission (FPPC) Form 700, “Statement of Economic Interests”. Spousal income is easily reported, [I]if required by your agency’s conflict-of –interest code. As a former member of the Palm Drive Health Care District Board of Directors, I would think that Mr. Smith would be aware of this requirement.

From their Frequently Asked Questions (FAQ) (https://www.fppc.ca.gov/forms/700-10-11/011-012011FAQForm700.pdf) page:

Income Questions

Q. Must an official report a spouse’s (which includes registered domestic partner’s) salary?

A. Generally an official is required to report 50% of his or her spouse’s or registered domestic partner’s
salary disclosing the employer’s name as the source of income on Schedule C of the Form 700. If the
spouse or registered domestic partner is self-employed, the business entity should be reported on
Schedule A-2. Officials should check their disclosure category, if applicable, to determine if the
income is reportable. Note: The filer’s regular government salary is not reportable.

They are also required to recuse themselves from voting on matters in which they have a legally-determined interest, and therefore, conflict-of-interest.

Previous concerns over conflict-of–interest led to Mr. Smith’s resignation from the Palm Drive Board of Directors in September, 2011, after his disclosure of his business connections to, and $175,000.00 investment in Dr. Gude’s firm, OffSiteCare. See: https://www.northbaybusinessjournal.com/40737/palm-drive-board-member-dan-smith-resigns/ This occurred after the Palm Drive Health Care Foundation announced in May, 2011 that, “By providing a loan to OffSiteCare Inc. (OSC), Dr. James Gude’s company, the Palm Drive Health Care Foundation has been able to assist with making HarmoniMD, the electronic medical record (EMR) software that OSC developed, certified for meaningful use by the federal government.” and, “In exchange for the assistance, OffSite Care, Inc. and HarmoniMD have offered installation of HarmoniMD at Palm Drive Hospital at no cost, saving Palm Drive well over $1M and allowing the hospital to achieve meaningful use on an accelerated schedule.” As previously noted, this never occurred. See: https://pdhcf.org/2011/11/02/electronic-medical-record-emr-software/

To simplistically shout at Mr. Horn to come up with a better plan is akin to shouting “cook a better meal” at a food reviewer who criticizes the fare at your restaurant. His job was to analyze and comment on the “Foundation’s Proposal”. He was not asked, nor did he volunteer to craft a proposal- the Foundation did.

I think that it is important to move away from the perception that the hospital exists primarily for the benefit of the residents of Sebastopol. The Palm Drive Health Care District is comprised of approximately 60,000 people, all of whom support the hospital through parcel assessments. Sebastopol’s “sphere of influence” is generally estimated to contain 30,000 to 35,000 people. Therefore, almost half of those people that support the District live far away, are unlikely to utilize the hospital, and are, essentially, subsidizing it for those close by. Who is the “OUR” in “OPEN OUR HOSPITAL”? As pointed out by Mr. Horn, a repeal of the parcel tax may find appeal with those District residents who are tired of paying for what they perceive to be “Sebastopol’s Hospital”.

Many people, on all sides of this issue, are working on ways to reestablish a level of emergency care in Sebastopol that can be financially viable and stable, something that has eluded Palm Drive Hospital through its many iterations over the years. Contrary to Mr. Smith’s comments, the Palm Drive Board of Directors is actively investigating numerous future possibilities for Palm Drive Hospital. Per their still-functioning website (https://www.palmdrivehospital.org/index.shtml), proposals for the reopening of the Hand and Physical Therapy Program are being solicited now, with proposals for the hospital to follow in the near future, after a series of community outreach meetings in the District. As Mr. Smith confirms, this process takes time and requires a lot of work. Please provide your input at: [email protected]

I still concur with Mr. Horn’s conclusions regarding the prior Foundation proposal. The community is now looking forward to a new Foundation proposal (“A Real Plan”- their words). In order to avoid future conflict-of-interest concerns, one would presume that this proposal will preclude the involvement, in either a paid or volunteer capacity, of Mr. Smith, Dr. Gude or any current employees of any of their associated business interests in any aspect of the management or administration of Palm Drive Hospital.

It is important to note that Mr. Horn and I are not engaged in a conspiracy to obstruct the reopening of Palm Drive Hospital or ridicule proponents of the prior or a future “Foundation Proposal”. As he has stated, we have had one short phone call and have never met in person. We both seem to share an absurd obsession with facts, not bluster, and that is why I continue to support his observations.
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[Dogenzip]

This post is a reply to Councilperson Eder's recent statements on Wacco regarding Palm Drive Hospital.

I think that it is important to move away from the perception that the hospital exists primarily for the benefit of the residents of Sebastopol. Who is the “OUR” in “OPEN OUR HOSPITAL”? As pointed out by Mr. Horn, a repeal of the parcel tax may find appeal with those District residents who are tired of paying for what they perceive to be “Sebastopol’s Hospital”.

Your statement that "The Palm Drive Health Care District is comprised of approximately 60,000 people, all of whom support the hospital through parcel assessments. Sebastopol’s “sphere of influence” is generally estimated to contain 30,000 to 35,000 people. Therefore, almost half of those people that support the District live far away, are unlikely to utilize the hospital", and are, essentially, subsidizing it for those close by." This is simply an opinion, not verified by factual analysis.

The voters supported the PD hospital district's establishment. Do you not believe that people living in the large areas west of Sebastopol, such as Bodega Bay who require urgent emergency care would prefer to go to nearby Palm Drive Hospital, rather than taking another 35 to 45 minutes additional time to go to Santa Rosa hospitals? Have you not heard the testimony of emergency room physicians who told us that time is of the essence in successfully treating stroke patients? Have you not studied the demographics of west county residents, who are predominantly older? And would the emergency preparedness plans for west county continue to be effective should an earthquake knock out the bridge across the Laguna while Palm Drive Hospital remains closed? Have you not heard the testimony of the Sebastopol Police and Fire Chiefs?

This is clearly not a hospital operated for the sole benefit of nearby Sebastopol residents. It is of substantial benefit to the the entire district.
As the Council liaison to the Palm Drive Hospital I respectfully urge you to fully support and work hard to realize the re-opening of Palm Drive Hospital.

[Sara S]

Absolutely! I lived west of Cazadero for 36 years, and went to Palm Drive for everything; a ruptured appendix, three joint replacements, gall bladder removal, other surgeries. We were "outside" the district, so couldn't vote, but I sure would have. Hell, I had a bake sale for Palm Drive when they first got into financial difficulties. I was over an hour from Santa Rosa, and there are lots of people out there who are even farther out. We NEED this hospital.


...This is clearly not a hospital operated for the sole benefit of nearby Sebastopol residents. It is of substantial benefit to the the entire district. ....

[Goat Rock Ukulele]

Dan -

I have to work for a living, so here goes...

No, I still believe that Glenn Minervini-Zick would have a conflict of interest serving as Hospital CFO and an employee of OffsiteCare;

No, the original Foundation proposal said absolutely nothing about Offsite Care donating its services to the Hospital (I just rechecked);

So no, I'm not retracting my previous comments.

Over and out...

Your article implies that Smith may have a hidden business agenda for trying to keep hospital open. Maybe it’s the same agenda in which he shelled out a couple of million many years ago to keep the hospital open saving local lives. Perhaps its the promised donation through the foundation this time? Accepting the Foundations proposal will only cost Smith as he has again agreed to again donate to reopen the hospital.

I have know Smith for more than 60 years. The agenda Smith has in trying to keep and now reopening Palm Drive is the safety of the local community. Its the same agenda in which he funded the local needle exchange program long before he made his wealth. He did so because every statistic showed that needle exchange saved lives and helped slow the spread of AIDS AiIDs at that time was a death sentence. The county was too afraid to fund it for political reasons so Dan took in upon himself to do so. Smith sees a community problem and if he has the knowledge and means he tries to help solve it.

In one of your posts you say “I have to work for a living” I hope you are not implying that Smith is a man of leisure? Anyone who knows my brother Dan will really get a real kick out of that. Dan routinely worked 14 hour days 7 days a week for 20+ years to build his company, to the constant worry about his long hours to our late mother. When Dan and Joan sold their business and garnered some wealth they didn’t buy a lavish home, purchase fancy cars or build a private label winery.

They live in the same house he built in his twenties Dan and Joan use their time, money, business acumen in an attempt to better our community and world. Any business Dan is involved with are to further those aims. We grew up poor, Dan is thrifty and pragmatic. He would not throw his money down a rathole If he did not believe the Foundation Plan will not succeed and save lives.

Dan probably wouldn’t want me to post any of this but I just can’t stomach you implying Dan and Joan have motives beyond trying to help our local community and save lives.

Sincerely,
Michael F Smith

[rossmen]

thank you for your honesty. i don't know dan personally and have challenged him in his garden market efforts on wacco. i have met him and appreciated his honesty, wisdom, and intelligence in business. the hospital board and horn come across as fearful and liability driven, for years, understandable as this is a major problem with modern medicine. dan is a can do guy with the best of intentions, no wonder his support is difficult to receive and trashed in an environment of bureaucratic ass preservation.


Your article implies that Smith may have a hidden business agenda for trying to keep hospital open. ...I have know Smith for more than 60 years. The agenda Smith has in trying to keep and now reopening Palm Drive is the safety of the local community. ...