Jim Horn and whether or not to close Palm Drive Hostpital

Despite misleading posts from Dan Smith, Jonathan Greenberg and others, I do not want to close Sonoma West Medical Center (SWMC). I do want to sell or lease it to a qualified operator (like the current operator, Pipeline) because both the Palm Drive District and the SWMC board have proven themselves unable to run the hospital effectively and sustainably.

For more information, please visit my website: https://hornforpalmdrive2016.com/

or my Facebook page: https://www.facebook.com/JimHornForP...tDirector2016/

or read letters of support in this week's Sonoma West newspaper: https://www.sonomawest.com/sonoma_we...1d3cc5fba.html

and read the following commentary that will appear in next week's newspaper:


Palm Drive Needs Real Change—Not Just More of the Same

The Palm Drive Healthcare District needs real change, not just more of the past’s failed plans and policies. We need directors with successful experience in public district governance, finances and management. We need directors willing to ask probing questions and then make tough choices about the future.

I served as a director of the Palm Drive District in 2014, and I’ve followed it closely since 2009. My wife Susan was a staff nurse at Palm Drive Hospital for six years until it closed in 2014. As a registered mechanical engineer for more than 30 years, I’ve designed construction projects at Kaiser, Sutter and Memorial Hospitals, among others. I understand the enormous challenges of maintaining a 40 year old hospital in California’s tough regulatory environment.

I’ve also served as a trustee of the Gravenstein Union School District for 14 years, including nine years as board president. During those years, Gravenstein has grown its student enrollment by 50%; built strong reserves based on balanced budgets, and achieved the highest school bond rating in Sonoma County. By any measure, Gravenstein is a successful public district.

Unfortunately, the Palm Drive District’s hospital is a very different story.

Since reopening a year ago, the Sonoma West Medical Center has been a financial and management disaster. In just the first eleven months, SWMC has suffered over $12 million in operating losses and amassed $10 million in outstanding liabilities and debts. It has been wracked by lawsuits, layoffs and a long list of management firings and resignations. Both the former Chief Business Officer and Chief Nursing Officer are currently suing SWMC for wrongful termination. Nearly every promised feature of the “Open Our Hospital” campaign, from the No-Wait ER to the specialty Institutes to the organic chef, is gone.

And the District itself is still mired in its second bankruptcy, with more than $28 million in debt and a bond rating lower than the nation of Greece. The District’s initial bankruptcy plan has been rejected by creditors. Already, the District can’t afford to adequately maintain the hospital building and equipment—and with the upcoming detachment of the River areas, it will lose another 40% or more of its operating income.

Even though the District owns the hospital and is ultimately responsible—and liable—for its operation, the District board has very little authority over hospital management or finances. It has delegated most of its authority over SWMC to a second group called the Governing Body. And the SWMC board, after finally admitting defeat, has hired a for-profit Southern California firm called Pipeline to try and rescue the hospital. So now we have two layers of middlemen and bureaucracy between the hospital’s owner and its actual operator.

Since both the District and the SWMC board have proven themselves unable to operate the hospital effectively and sustainably, I propose that we sell or lease the hospital directly to Pipeline or another qualified company—and then get out of their way. With the money from the sale or lease, we can pay down some of the District’s massive debt and help resolve the current bankruptcy.

And with the hospital in more competent hands, we can focus on cost-effective community health programs that benefit our entire District, with established partners like the West County Health Centers. We can support the creation of urgent care centers, improved ambulance services, senior healthcare and wellness programs as the most effective use of our scarce healthcare dollars.

We need District board members who demand real change, not more of the same—and who can help restore fiscal discipline, accountability and trust to our District.

Palm Drive Board Candidate Jim Horn's Campaign of Deception to Close Our Hospital

October 29, 2016
By Jonathan Greenberg

This post first appeared as a column in the Sonoma Independent here

With the election less than two weeks away, anti-hospital activist Jim Horn is running for election to the Palm Drive District Health Board on the shocking platform of ending the dedicated parcel tax subsidy to the Sonoma West Medical Center (SWMC), selling or leasing the building to the highest bidder, and forcing the hospital, with its life saving emergency room, to close.

Two highly qualified and better informed candidates are running against Horn on a platform of working to support and sustain a thriving, reopened hospital with an emergency room that a few years ago, was voted by Consumer Reports to be the safest of more than 350 hospitals in the entire state of California.

Palm Drive Health Care Foundation Chair Gail Thomas is running with Rob Cary, the volunteer project manager who oversaw the complex reopening of the hospital, as the only two of five candidates who are committed to keeping the hospital open.

During the 2014 District Board election, a grassroots uprising against West Sonoma County’s powerful political insiders elected the “Doc and Cop,” who won a resounding victory and a new District Board majority that acted to reopen the hospital that the previous board had irresponsibly forced to close.

Jim Horn and fellow candidate Eira Klich-Heartt are promoting the duplicitous argument that the Board should sell the building to the highest bidder and grab parcel tax dollars legally earmarked by voters for the hospital and its emergency room and reallocate them to other non-emergency health services run by their friends at West County Health Centers.

Lately Horn is saying that he does not want to close the struggling hospital, which has in recent months moved closer to sustainability under the Pipeline Management group. He just wants to remove the $1 million subsidy it currently receives, and make the hospital pay the District Board millions of dollars per year that it does not have, as the market rate that the building would be worth to a private corporation that did not operate a hospital. Given the economic challenges of even breaking even with a tax subsidy earmarked for that purpose, even without paying rent, this would be impossible to achieve, as Jim Horn knows.

Jim Horn is employing the same political doublespeak that he did when he ran unsuccessfully two years ago: he plans to kill the hospital without saying that he wants to kill the hospital.

In the view of candidates Jim Horn and Eira Klich-Heartt, the District should “get out of the hospital business,” while continuing to collect the parcel tax. What they don't seem to realize is that supporting the hospital is not merely one option among many. The stated purpose of the parcel tax, and the purpose of the District Board itself, is very specific: to make sure that we have a hospital and emergency services in West County.

On his website here, Horn writes, “I support leasing or selling the hospital building to a third party at fair market value and using the proceeds to pay off debt and support cost-effective healthcare services for the entire District…We must focus on community health programs that benefit our entire community, with established partners like the West County Health Centers.”

Ms. Klich-Hart, commenting on a public web forum, agreed, writing, “The healthcare district is supposed to care for all of our citizens and taxpayers, whether they are able to enjoy SWMC or not….I am not against closing the hospital. But our real healthcare needs as a district are so much larger than a hospital!”

It shocks many in our community that anyone would run for a public District Heath Board that was specifically established about 15 years ago to support a hospital and its emergency room on a platform of closing that hospital and siphoning off those tax dollars to fund other services. This illicit tax grab is especially suspect in that it comes at a time when there is an acute shortage of emergency room beds in Sonoma County, due to a cutback in emergency room beds at Santa Rosa’s new Sutter Hospital from 120 to 80, and a growing population in our county.

This important report by the University of California at San Francisco, titled, “Higher Chance of Hospital Death Found in Areas Where Emergency Departments Have Closed,” found that the odds of dying increased 15% for heart attacks and 10% for those with strokes and 8% for sepsis.

This is why the Progressive Sebastopol Voter Guide (which I participate in creating) called the Palm Drive Health District Board election the most important local contest of the 2016 election, urging citizens to “Vote only for Gail Thomas and Rob Cary for Palm Drive Board as though your life depends upon it—because the lives of some of us in West County will depend on whether the Sonoma West Medical Center and its emergency room remain open.”

Jim Horn’s campaign of deception relies upon ignoring eight inconvenient truths that the 30,000 voters in the Palm Drive Health District should consider before casting their ballot for the November 8 election. These are:

1. West County residents will have to pay the same amount in parcel taxes whether the hospital and its emergency room stays open or closes. Taxpayers save zero dollars selling the building and closing the hospital.Many of us, especially the eldest, sickest, and those with infants and small children, will suffer, and some will die as a result of needing to go to Santa Rosa for emergency room care.
   
   
2. Just $1 million, or less than 10%, of the $16 million spent during the costly reopening and operating of the new SWMC hospital has come from our tax dollars. More than 90% of this cost has come from private philanthropy.
   
   
3. More than 2/3 of this money has gone not to operating losses, but to upgrading the facility and licensing costs associated with reopening after the irresponsible decision to close Palm Drive Hospital was made by the former District Health Care Board majority (which the Doc and the Cop replaced two years ago).
   
   
4. Public hospitals like SWMC and Palm Drive never break even without public subsidies. A small community hospital that must, by law, provide emergency health care to anyone who walks through the door, regardless of ability to pay, and then wait months for reimbursement from insurance companies and government bureaucracies. This is not a lucrative business, even with the best management. Counties like San Francisco and New York spend hundreds of millions subsidizing their hospitals, and nobody runs for office on the platform that they need to close the hospitals and let people die because they are unprofitable. In the absence of a single payer system that compensates hospitals for all billed care, it has been, and will remain a struggle to operate small hospitals in communities like ours.
   
   
5. Urgent care, which Jim Horn wants to misappropriate our tax dollars to pay for, will cost more than double the tax allocation than the current hospital receives. More importantly, an urgent care facility cannot accept ambulances or provide any assistance for life-saving emergencies. It is not open 24/7, and in many cases, it does not even provide care to see people who are not already enlisted as patients.
   
   
6. Not a single West county doctor endorses Horn or Eira Klichh Heartt. The most prominent doctors in West County endorse Gail Thomas and Rob Cary, including Doctors Bernstein, Bollinger, Campbell, Canova, Davidson, Delgado, Denno, Holmes, Kahl, Luperini, Murphy, Pitzen, Powers, Rosa and Zelk.
   
   
7. The Measure W tax passed by voters in 2004 is legally earmarked to support the hospital, not to fund generalized health care by Jim Horn’s allies at West County Health. The measure stated: “To ensure survival of Palm Drive Hospital and access to local emergency, acute care, medical and physician services, and provide for ongoing expenses, repair and improvements to equipment and technology, shall Palm Drive Health Care District repeal its existing tax and levy a special tax of up to $155.00 on each taxable parcel in the District.”
   
   
8. State law prevents special taxes from being used for purposes other than they were intended when that tax was passed.

This makes the tax grab that would benefit Horn's allies at West County Health Centers legally questionable.as well as duplicitous, given Horn and Klich-Heartt's posture that this outcome is more "responsible" than using dedicated funding for keeping open an emergency room.

Mary Szecsey, the powerful Executive Director of West County Health Centers, was one of the top endorsers of Jim Horn and his unsuccessful effort to prevent the hospital from reopening on 2014. Unlike the hospital, which, as a standalone community hospital, struggles with notoriously low reimbursement rates from insurers, West County Health Centers runs at a considerable surplus. That's because as a Federally Qualified Health Care Centers, West County Health Centers receives rates for all the services they provide their enrolled patients that far exceed those that our local private physicians receive for the same patient and same procedure. In addition, West County Health Centers only sees registered patients, regardless of the urgency of someone's health needs. Indeed, during a number of times during the past seven years when I, or a local friend, have asked to enroll ourselves or our children at the Sebastopol West County Health Center, we have been told that they are full, are not accepting new patients, and do not have a waiting list.

Despite the challenging cost of becoming, as SWMC has, the only community hospital in modern American history to close and then reopen, West County Health Centers has already been given nearly $200,000 of diverted District funds. Retiring Palm Drive District Board members Sondra Bodley (who has been campaigning for Jim Horn) and Marsha Sue Lustig (who is running for reelection this year while also endorsing Horn) spear-headed the diversion of scarce earmarked hospital funds to West County Health Centers last year, as described in this article, for general non-emergency services. Bodley and Lustig are also the two surviving four District Board members who voted in April 2014 to suddenly close the hospital and reject the Palm Drive Foundation's doctor led plan to keep it open. They engineered the questionable diversion of district tax dollars to West County Health Services in a highly unorthodox manner, as no Request for Proposals was issued, and no other organizations were given the opportunity to put in a proposal to bid for these contracts.

Horn, who has, for two years, doggedly criticized the District Board for daring to spend just $1 million a year on the hospital that it was created to fund, has been the the community's leading advocate for the diversion of parcel taxes to the organization.

This month, Bodley wrote an opinion column in the hospital hating Sonoma West newspaper endorsing the slate of Jim Horn, Eira Klich-Heartt and Marsha Sue Lustig to form a new Board majority that would that would "get out of the hospital business" by diverting all dedicated hospital taxes and selling or leasing the building to the highest bidder. That removing the small subsidy received by the struggling hospital and forcing Pipeline management to pay rent or purchase the building that the District was created to maintain would clearly force the closing of the hospital and the shuttering of its life saving emergency room

Of course, neither Bodley, nor Horn, nor Klich-Heartt say this, though that's the reality underneath their carefully constructed deceptive narrative.

Bodley and her powerful political supporters have a different vision for our community in West Sonoma County, one that funnels dedicated parcel tax dollars to the only major general health services provider in the region, West County Health Centers.

"Marsha Sue, Eira, and Jim represent a much more realistic and current understanding of healthcare," Bodley wrote two weeks ago. "They see that the Health Care district can provide, in partnership with other West County health care providers, services that actually meet the needs of the community. They know that most healthcare takes place outside the hospital and that to equate an emergency room with healthcare is a narrow and extreme viewpoint."

Candidate and Palm Drive Foundation Board Gail Thomas, who has worked for years to champion the hospital's challenging reopening, disagrees. In a letter to the Sonoma Gazette, she wrote, "We have taxed ourselves $155/year to have this hospital, NOT to abandon it. People who are running for the District Board with a platform to close the hospital do not understand or do not care how important it is for our community. We lost lives in our community during the 18 months it was closed; we are saving lives every day since it reopened."

Thomas' letter concluded, "Please give me, Gail Thomas, and Rob Cary your support as candidates for the Palm Drive Health Care District Board. We pledge to keep our hospital open, viable, and responsible to its community. Do not elect the people who are pledged to close it."

As a long time employee of both Palm Drive and Sonoma West I cannot stress strongly enough why we need a hospital and an emergency room in Sebastopol. Those who work to close the hospital must come over and spend time in our ER and our ICU and our Surgery units and see who the patients are and imagine what would have happened to these people if we had not been there. Lots of needy people, lots of patients of the Clinic system, people without insurance......they deserve our care too. sutter is so often full that they transfer patients over here.

What would happen if there was a flood and we couldn't get across route 12? What would happen to all the jobs in Sebastopol provided by not only the hospital but by local doctors' practices? How many seniors who don't drive would not be able to get to these services?

I readily understand that West County residents who might be served by the hospital would want it to thrive and I certainly support that. But, as a person who lives close to River Road, I would be served instead by the new Sutter hospital in Santa Rosa, and I do not think I should be taxed to pay for a hospital that does not serve me. In my ignorance of all of the other candidates' positions, Jim Horn is the only one I know of who shares my view. I would be pleased to find other candidates who share that view, and perhaps I would vote for one of them instead of Horn.

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Posted in reply to the post by phredo:

I readily understand that West County residents who might be served by the hospital would want it to thrive and I certainly support that. But, as a person who lives close to River Road, I would be served instead by the new Sutter hospital in Santa Rosa, and I do not think I should be taxed to pay for a hospital that does not serve me. ...

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Phredo,

Please excuse the length and complexity of the answer to your question but here is the story behind this issue:

1) Detachment from the district will not eliminate the tax any time in the next 20 years. It will reduce it over time from $155 to something like $125 next year and then likely after about 5 years there would be another reduction to something around $80 for the next 15 years. The reason for this is that detached parcels are responsible for all of the district's debts at the time of detachment. I suspect that most people were led to believe that their tax would go away completely. What will go away is their vote! Once you are detached, you no longer get to vote for directors even though you may be paying taxes for 20 years.

2) Neither Jim Horn or any of the district directors has anything to say about whether the detachment goes forward. This decision is up to LAFCO, the Sonoma County Local Area Formation Committee. LAFCO has already indicated that they will approve the detachment so from that perspective, it is a DONE DEAL. Horn is simply using this as a ploy to get the votes of the River Corridor, a useful but duplicitous political move for him.

3) Even though Sutter is now closer to the River Corridor, about 15% of the current patients at Sonoma West Medical Center are from the River Corridor. This is down somewhat from the past, but still a significant portion of the people who are using SWMC. SWMC serves not only local residents, but tourists and visitors to the area and is an important part of the county Emergency Medical Services that would serve the entire area in case of fire, earthquake, floods, or flu epidemics. You might also want to know that Sutter routinely sends patients to SWMC because they do not have enough beds.

4) If the hospital closes, Jim Horn wants to continue collecting taxes for other healthcare related programs. This would prolong the taxes for the River Corridor (and the rest of the district.) Only Gail Thomas and Rob Cary have stated that if the hospital closes, they will close the district, sell the real estate and all of the taxes will be used to pay off debts at which point the tax would be eliminated. In Horn's close the hospital plan, only 50-60% of the non-River area tax would go to debt while 100% of the River Corridor taxes would go to debt. (Remember from above that assuming that the detachment goes through, the River Corridor would be paying less.)

So to sum this all up, Jim Horn saying he supports detachment (already a done deal) when he has nothing to say about it is just trolling for votes by giving misleading information. Gail and Rob are the only ones who say they will close the district if the hospital closes and minimize taxes for EVERYONE. You get to vote for 3 people. If you are going to vote for Horn, vote for Gail and Rob too.

I would agree with anyone who says we should not have to pay taxes to have a hospital in our community but the reality is that hospitals are forced to serve everyone regardless of their ability to pay and as such are not just money makers. Not having an emergency room close by can mean death or permanent disability so we chose to keep our hospital by supporting it. Unless and until we have a rational health care like Europe or Canada, we have to make sacrifices to have healthy communities. All that being said, we have to have a well managed hospital, which we have not had up until this point so people have a right to demand good management.

I don't have time to respond to all of the misinformation and personal attacks coming from Dan Smith and Jonathan Greenberg in other threads--fact-checking those two is like fact-checking Trump--but I'll try to hit the high points:

1. SWMC (the hospital) is nowhere near financial sustainability. The published operating loss for the month of September was $660k. If you adjust the income for some one-time accruals, the structural deficit is about $780k--or about $9.4 million a year. Patient utilization for August and September were the lowest since the hospital reopened and similar to the spring of 2014, just before the hospital closed.
   
   The only thing keeping the hospital open is Dan Smith's continuing donations. Smith has provided roughly 95% of the money to reopen the hospital and cover its operating losses--the rest of the community (including the doctors who apparently support other candidates), only 5%. That's simply not sustainable.
   
   
2. Neither the Palm Drive District nor the SWMC board can afford to maintain the hospital's physical plant. Just last week the new operator, Pipeline, presented a $4 million capital budget for the next four years. Pipeline (and Smith) want the District (still in its second bankruptcy) to borrow money to fund this budget--on top of the $28 million that District taxpayers already owe for past hospital losses.
   
   
3. Both the District and the SWMC board have proven themselves unable to run a hospital sustainably. Earlier this year, SWMC finally admitted that it had grossly underestimated the time, cost and complexity of reopening and running the hospital--something I've been saying for the last two years.
   
   In my view, the hospital's only chance for survival is to get it out of the hands of the District and SWMC and into the hands of a qualified operator with the expertise, resources and deep pockets to support it. At this point, the District and SWMC add only complexity and confusion to the tough job of actually running the hospital.
   
   
4. Many public healthcare districts have decided to lease or sell their hospitals to private operators. For example, the Petaluma Valley Healthcare District decided 20 years ago that it no longer wanted to directly operate its own Petaluma Valley Hospital (PVH). It negotiated a 20-year lease with St. Joseph Health (which operates Memorial Hospital in Santa Rosa) to run PVH. In addition to an initial $11 million payment to the Petaluma District, St. Joseph's provided more than $15 million in maintenance and upgrades to the facilities.
   
   
5. In general, parcel taxes can only be used to support items listed in the ballot measure--but contrary to both Smith and Greenberg, parcel taxes don't have to be spent on every item listed. The District can choose to use its funds to support "medical and physician services," as listed in Measure W, and not operate a hospital.
   
   In fact, the District has a long history of using parcel taxes for non-hospital uses. For example, it used tax dollars to create a skilled nursing facility (the Palm Drive Nursing and Rehab Center) and an outpatient physician clinic (the Palm Drive Medical Center). Unfortunately, like everything else the District has tried over the years, both lost money and eventually closed.
   
   A sale or lease would require voter approval, so nothing can be done "behind the public's back." If voters approve a sale or lease, that would mean they understand we need real change, not more of the same.
   
   
6. I didn't oppose reopening the hospital two years ago, and I'm not trying to close the hospital now. But I have tried consistently to ask probing questions, do independent research, and carefully evaluate plans that appeared (and proved) unrealistic and unsustainable. I try to drill past all the "happy talk" and the wishful and magical thinking that dominates the most zealous hospital supporters. Unfortunately, in their binary world, "if you're not for us, you must be against us!"
   
   
7. I supported the detachment of the River areas because I believe their arguments are valid--not as a "duplicitous ploy" to get votes, as Smith suggests. And to my knowledge, detachment supporters were always truthful that River residents would still be liable for past District debts but not future ones.
   
   Smith states that I am "trolling for votes" by supporting detachment because it is a "done deal." He's wrong, and he knows it. To my knowledge, the District is still deciding whether to ask LAFCO to formally reconsider its vote or mount a petition drive to force a vote on detachment. My statements in support of detachment (which started with my ballot statement, written three weeks before LAFCO's initial straw vote), represent my honest opinion, not some Machiavellian ploy.

Follow the bouncing logic of Horn and you will see that he that despite his post repeating his deceptive logic, he will not refute his basic strategy to force our hospital to close, along with its life saving emergency room. He also threw out a lot his tired list of anti-hospital allegations without countering this simple premise behind our important grassroots effort to oppose him and his hospital closing allies: We pay the same taxes whether this hospital stays open or close.

Once voters understand this, nobody, except Horn and the political and financial beneficiaries of his illegal tax grab on behalf of West County Health Centers want to follow his toxic "leadership" and force our emergency room and hospital into closing, causing tremendous suffering to others in our community for no reason other than the political and financial gain of his benefactors.

Jim, is there a single inaccuracy in my column, here own Wacco, entitled Palm Drive Board Candidate Jim Horn's Campaign of Deception to Close Our Hospital?

And please, Jim Horn, share with the reading public whether there is anything inaccurate about this statement from my expose in the Sonoma Independent about your secret strategy to close our hospital?


Lately Horn is saying that he does not want to close the struggling hospital, which has in recent months moved closer to sustainability under the Pipeline Management group. He just wants to remove the $1 million subsidy it currently receives, and make the hospital pay the District Board millions of dollars per year that it does not have, as the market rate that the building would be worth to a private corporation that did not operate a hospital. Given the economic challenges of even breaking even with a tax subsidy earmarked for that purpose, even without paying rent, this would be impossible to achieve, as Jim Horn knows.

Jim Horn is employing the same political doublespeak that he did when he ran unsuccessfully two years ago: he plans to kill the hospital without saying that he wants to kill the hospital.

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Posted in reply to the post by JimHorn:

Despite misleading posts from Dan Smith, Jonathan Greenberg and others, I do not want to close Sonoma West Medical Center (SWMC). I do want to sell or lease it to a qualified operator (like the current operator, Pipeline) because both the Palm Drive District and the SWMC board have proven themselves unable to run the hospital effectively and sustainably.

For more information, please visit my website: https://hornforpalmdrive2016.com/
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Jonathan, what exactly is your plan to keep the hospital open? Can you answer that one simple question? Is the solution for Dan Smith to continue to throw good money after bad until he too is bankrupt?

If you don't mind, I will answer this question.

Joan and I are 69 and 70 and can't take it with us to the grave so we believe we have made a good investment in our community whether the hospital survives or not. (There is no bad money here.) We always knew that we had set out on an impossible task, but we also knew that if we succeeded people would benefit for years to come. We are not the only donors, many others gave generously of their money and time and are still doing so today.

But the hospital has to stand on its own now. The plan is, and always has been that the hospital is well managed and financially sustainable with $1M (25%) of the district's tax dollars, some annual philanthropy (as is typical for all hospitals), and other money that the fed and state provide to district hospitals. The fact is that the hospital is fast approaching this under the expert management of Luke Tharasri and the Pipeline Health team. (They are so good that even Jim Horn considers them capable managers.)

Before we set out to open the hospital, we had a number of healthcare financial experts analyze what it would take to make the hospital sustainable so we knew not only the challenges but also the opportunities. Will it succeed over the long term? We will only know by continuing to do the work.

The hospital has been open of one year now and saved many lives, put millions of dollars into the local economy, and kept the physician community in West County. It is now truly starting to hit its stride. But it had to go through some rapid changes and one challenge after another to reach this point. No one will say this has been easy or that we didn't make mistakes. (I could provide you a LONG list of my own.)

All we ask is that you grant us the grace to wait and see if the hospital can succeed rather than repeating the worn out story that it is failing. I can assure you that if you had visited today, you would have found nearly every bed full, surgeries under way, and a busy ER. Another life was saved this weekend and I am sure that for them and their family our efforts were well worth it.

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Posted in reply to the post by jbox:

Jonathan, what exactly is your plan to keep the hospital open? Can you answer that one simple question? Is the solution for Dan Smith to continue to throw good money after bad until he too is bankrupt?

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Posted in reply to the post by farmerdan:

If you don't mind, I will answer this question.

Joan and I are 69 and 70 and can't take it with us to the grave so we believe we have made a good investment in our community whether the hospital survives or not....

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Thank you, Dan, for this reply. Please understand I am not a critic of the hospital per se, but the problem I have is the intractable financial difficulties it continually finds itself in, year after year. Your philanthropy and dedication to the success of the hospital is an inspiration to the whole community, though it should be said you have do a vested interest in the ongoing development of your operating software as well. I sincerely hope Pipeline management can return the hospital to financial solvency. If Pipeline decides to go with a different operating software will you continue your current level of support?

I still would like Jonathan to answer the question though. He has advocated for the City of Sebastopol to pick up the tab for the water bill, I believe, and does a lot of cheerleading and mudslinging against hospital critics but seems to be a bit short on actual specific solutions.

jbox,

I will let Jonathan answer for himself but here is the (long) answer to the question you asked me:

Joan and my support was never tied to the use of HarmoniMD as the hospital information system.
(Though we did rightly believe that it would be the only affordable solution.)
Nor was SWMC Inc., the non-profit we started tied to being the manager.

We always knew that the community would best be served if a multi-hopsital operator like Adventists Health, Dignity, Prime or Pipeline would take over and that they would bring their own software platform. I can tell you that we tried very hard to make this happen, but no one wanted to touch a closed district hospital. We are very fortunate to have Pipeline now but we had to get the hospital up and running and they now have to make the hospital profitable to stay around.

I have made VERY clear to Pipeline (and all the other operators) before they came that if the want to run on an another software system they should start the process but that EHRI [company that makes HarmoniMD] will continue to support SWMC for five years for free if that is their choice. They may convert software at some point since their other hospitals run on McKesson Paragon but at least for now, they want to continue on HarmoniMD and I believe are relatively happy with it.

SWMC has been a very mixed blessing for EHRI. The company has learned a lot by supporting SWMC but it has been at a very high price both financially and PR wise. At present, EHRI is focused in Africa and Latin America where having a US implementation is only marginally helpful. (The company is not marketing in the US because it will need to go through another round of meaningful use and have to complete integration with a new revenue cycle management system in order to be marketable in the US.)

EHRI is doing pilot implementations in Kenya, Nigeria, and South Africa and anticipates a 22 hospital implementation in Mexico and some in Columbia and Panama. Like SWMC, these are either free or at cost in order to establish credibility in that country. Doctors from Uganda, want to see HarmoniMD here but most want to see it working in their own country because of the vast difference in informatics practices so the process is similar to SWMC in those countries. Fortunately, most have paid for out of pocket expenses through NGOs like Duke University.

It should be understood that supporting an implementation in a hospital is not like selling a copy of quickbooks and walking away. There have to be people on duty 24/7 to help new users or solve issues. There is a constant process of new requirements from Medicare, Medi-Cal, CDPH, and billing for reporting. As well, there are regular updates for the other software vendors like pharmacy, imaging, lab, and billing that integrate with HarmoniMD. This can run into the millions of dollars a year for larger hospitals and would likely cost SWMC $100,000 a month, which it currently does not have. EHRI has had to bear these costs itself.

Will EHRI ultimately benefit from implementing at SWMC? I certainly hope so because at this point SWMC does not have the millions of dollars it would take to convert to another platform and is therefor dependent on EHRI at least in the near term. EHRI needs more capital (since I have given most of mine to the hospital) and income from somewhere other than SWMC in order to continue to support SWMC for free.

I would say that instead of worrying that EHRI might make money from other hospitals, we should all worry that it might not make enough to keep supporting SWMC for free. This is the real risk we face at least in the short term. If the hospital becomes very profitable, other options are available.

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Posted in reply to the post by jbox:

...If Pipeline decides to go with a different operating software will you continue your current level of support?...

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My consistent advocacy for a City Council that actively supports our hospital and life saving emergency room, and my consistent criticism of those like Jim Horn, and the City Council members who have endorsed him, for supporting a position that results in the closing of our hospital, is not, by any definition I have seen, "mudslinging."

Instead it is the time honored, democracy-boosting American institution of whistle blowing: holding our elected officials, and candidates, accountable to the public interest.

To answer the question of what our City Council can do:

1) First, do no harm. During the last election, every member of our City Council, that means Robert Jacobs, John Eder, Una Glass, Sarah Gurney, and Patrick Slayter, endorsed Jim Horn for his failed campaign for Palm Drive District board, despite the grassroots outcry to reopen our hospital, despite the challenges and expense that the closing was creating for public safety and our emergency service providers, despite the suffering caused by the closing to the sickest, and oldest, and youngest among us, and despite Horn's platform of paying off the bankruptcy first and not allowing the Foundation plan to open the hospital to proceed.

This year it is Nancy Dobbs' close friends Robert Jacobs and Una Glass, as well as Marsha Sue Lustig's husband John Eder, who are openly endorsing Jim Horn and his platform of forcing the hospital to close. Although he is not saying this, and protesting my saying it, Jim Horn and anyone who takes the time to understand the challenging financing of this hospital, knows full well that Horn's position of removing the hospital's $1 million in annual parcel taxes and then charging SMWC money that they do not have for the privilege of using the hospital building will result in the closing of the hospital.

Mayor Sarah Gurney and Patrick Slayter have not made any endorsement, suggesting that they are indifferent as to who is on the Palm Drive Board: candidates Rob Cary and Gail Thomas, who will work to keep it open, or candidates Jim Horn and Eira Klich-Heartt, who will force it to close.

2) Provide water and sewage for free. If the hospital closes, there will be no water income from the closed building. Providing free water and sewage is a way for our city to help its largest employer without spending a dime from our general fund. Water and sewage are billed from and to a separate city fund, which runs at an ample surplus, especially with recently increased rates. Our city does not buy water and there is no incremental cost of supplying it, or sewage costs, to the hospital. This will save the hospital about $60,000 per year. Not a lot, but something, and, more importantly, it demonstrates "skin in the game" to other potential governmental and institutional funders.

3) Assist and support the District Board and hospital in seeking funding and program support from County, State and Federal agencies.

The notion that a small community hospital that must, by law, provide costly services regardless of compensation to anyone who walks through its doors, without government funding, is absurd. Most counties, as well as states and the federal government, assist public hospitals, in a similar manner as they chip in to assist mass transit, which, like hospital emergency rooms, has a demonstrated public benefit.

West County Health Centers provides an excellent service to its patients and runs at a surplus not because it is so much better managed than our hospital, but because it ONLY sees patients it receives pre-arranged and specified reimbursement for, and these reimbursement rates, from the County, state and federal governments, are far higher than the cost of providing those services.

That SWMC has not received directed programs and funding from county, state and federal agencies, in my view, reflects a false narrative that it somehow needs to stand financially on its own, like a private business, while providing one of the most important public services that exist: an emergency room that sees and helps and saves the lives of anyone who walks through its doors. Memo to Jim Horn and his hospital-closing allies:

A public hospital is not a for-profit business producing wine or widgets.

It is EXACTLY the sort of service that taxpayers have paid for since the founding not our County: the first public hospital to provide emergency medical care for indigent people was started in Sonoma County in 1859. It was one of the very first thing that our county government did.

The absence of governmental assistance at SWMC is the result of a hospital management, District Board, AND City Council that have never worked together to find this funding.

What I am suggesting is that this is a very important way that Sebastopol's City Council can, and should, be part of the solution. Our City Council needs to create a sub-committee to assist with this important effort for our collective future. If elected, I would be honored to serve on it.

These three specific suggestions work in tandem with one another. Other government agencies need to see that a local hospital has local government support before committing to provide county, state or federal support. And the District Board and hospital need to see that the Council truly supports its existence, and future.

I believe that Sebastopol's City Council can, and should, do more to provide this support. It is one of the main reasons that I am running for office, and one of the main deliverables I will work to provide if I am elected.

Quote:

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Posted in reply to the post by jbox:

...I still would like Jonathan to answer the question though. He has advocated for the City of Sebastopol to pick up the tab for the water bill, I believe, and does a lot of cheerleading and mudslinging against hospital critics but seems to be a bit short on actual specific solutions.

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Three days ago, in response to Jim Horn's protests (below) about my misinformation and criticism of his policy (which he, and his supporters, characterize as "personal attacks") , I publicly called the candidate for the Palm Drive District Board out and asked that he respond to this single question, below in blue. We, the voters of West Sonoma County, are still waiting for an answer. The reason why I think we will keep waiting for this answer is because my critique of his secret plan to close the hospital is absolutely true.

Jim Horn knows little about running a hospital, but he has learned quite a bit about rhetorical deflection and accusation. He continually refuses to acknowledge what he knows to be the outcome of his planned policy: the closing of our hospital. He knows full well that every hospital group in the region has been offered the opportunity to run this small community hospital, WITH the $1 million tax subsidy, and WITHOUT the rent or purchase cost that he now says an outside manager would need to pay. Indeed, they were offered this with millions in philanthropic dollars to assist.

And yet all refused. Every one of them.

That's because the hospital-haters narrative, that this is a for profit venture that would make money "if only" it had better management, is purposely deceptive. This is a PUBLIC community hospital which by its nature needs public assistance to thrive. That's why we voted for this tax, that's why it is open and saving lives as I write this, and that's why our community, in my view, is going too have to stand together to support SWMC and why our City Council will need to assist the new hospital in attracting additional county, state and federal funding and programs.

Here is the question that Jim Horn is not answering:
Jim Horn, share with the reading public whether there is anything inaccurate about this statement (below in blue) from my expose in the Sonoma Independent about your secret strategy to close our hospital?

from the story: Palm Drive Board Candidate Jim Horn’s Campaign of Deception to Close Our Hospital
Lately Horn is saying that he does not want to close the struggling hospital, which has in recent months moved closer to sustainability under the Pipeline Management group. He just wants to remove the $1 million subsidy it currently receives, and make the hospital pay the District Board millions of dollars per year that it does not have, as the market rate that the building would be worth to a private corporation that did not operate a hospital. Given the economic challenges of even breaking even with a tax subsidy earmarked for that purpose, even without paying rent, this would be impossible to achieve, as Jim Horn knows.

Jim Horn is employing the same political doublespeak that he did when he ran unsuccessfully two years ago: he plans to kill the hospital without saying that he wants to kill the hospital.

Quote:

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Posted in reply to the post by JimHorn:

...
In general, parcel taxes can only be used to support items listed in the ballot measure--but contrary to both Smith and Greenberg, parcel taxes don't have to be spent on every item listed. The District can choose to use its funds to support "medical and physician services," as listed in Measure W, and not operate a hospital.

In fact, the District has a long history of using parcel taxes for non-hospital uses. For example, it used tax dollars to create a skilled nursing facility (the Palm Drive Nursing and Rehab Center) and an outpatient physician clinic (the Palm Drive Medical Center). Unfortunately, like everything else the District has tried over the years, both lost money and eventually closed....

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Quote:

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Posted in reply to the post by Peacetown Jonathan:

Three days ago, in response to Jim Horn's protests (below) about my misinformation and criticism of his policy (which he, and his supporters, characterize as "personal attacks") , I publicly called the candidate for the Palm Drive District Board out and asked that he respond to this single question, below in blue.

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seems fair. I agree there's nothing personal or even attackish*. It's not a trick question. Nice way to clarify the arguments.

(*)well, maybe 'political doublespeak' is "ish". I don't really think so, doublespeak in politics is just a tactic, not a sign of lack of political ethics.

To better understand the problems facing the Palm Drive Healthcare District, we need to ask the right questions.

But first, I believe we need to conduct a civil discussion of the issues. Unfortunately, Mr. Greenberg seems unable to disagree with someone without insulting and demonizing them. He did exactly the same thing two years ago. He’s accused me of being deceitful, deceptive, and duplicitous, among other things, and he’s Photoshopped my face onto clipart of a burglar stealing tax dollars. Really?

I’ve served on the Gravenstein Elementary District board of trustees for 14 years, and I’m now in my fourth term. My colleagues on the board, including Sebastopol Chief of Police Jeff Weaver, have selected me as board president nine times. In 2000, my wife and I were selected as Sonoma County School Volunteers of the Year.

So enough of the personal attacks, please.

Back to asking the right questions about Palm Drive: Greenberg demands to know if I would continue a $1 million District subsidy to the hospital if elected. Wrong question. In fact, none of the candidates will do that, regardless of what they may say publicly, because the District won’t have the money to give. Let me explain.

The District receives about $3.7 million in parcel taxes each year and spends about $1.7 million of that to pay off its secured debt (bonds and such). This debt won’t be repaid fully until 2035. The remaining $2 million a year ($3.7 million - $1.7 million) is the District’s “disposable income.”

But once the detachment of the River areas become final this coming spring, that figure will drop by at least 40%, because the detachment area comprises somewhat more than 40% of the parcels in the District. So, instead of having $2 million in disposable income, the District will be down to about $1.2 million (or less) a year. (The detachment areas must still continue paying a proportional share of the secured debt and the bankruptcy—see below.)

But there’s more. As everyone knows, the District is still in bankruptcy (its second) and owes unsecured creditors about $8.3 million. The District submitted a bankruptcy plan earlier this year that placed most of the repayment burden on the secured creditors rather than the District itself. Not surprisingly, the creditors rejected the plan, and the District has since withdrawn it.

If we assume the District ends up paying only half of the bankruptcy debt out of its own coffers (call it $4 million) and stretches payments over ten years, this still requires $400k annually. The detachment area would be responsible for 40% of this amount; the rest ($240k/year) would come from the District’s disposable income.

So now the District’s income will be down to about $960k/year. And that money has to cover many costs:

• The cost of running the District (which now stands at $900k/year, but which the District claims it can reduce to $350k per year by the year 2021).

• The cost of maintaining the hospital’s physical plant (which Pipeline estimates at $4 million over the next four years, or $1 million/year—and since the hospital is the District’s only asset, proper maintenance is crucial).

• The cost of saving some money to build a modest reserve, rather than living hand-to-mouth.

• And the cost of any other healthcare initiative the District might want to support.

The careful reader will notice that there is nothing left—actually, less than nothing—to subsidize the hospital’s operating losses. Any candidate who says differently is dreaming. That’s just one of the reasons I propose selling or leasing the hospital to a qualified operator with deeper pockets.

And please note that Dan Smith also favors selling or leasing the hospital to another operator. In a related post, Smith said he always favored Adventist Health as an operator, but that’s never worked out. Dan himself told me after a District board meeting this year that he hoped to sell the hospital, stating that it was "worth more open than closed." Both the District and SWMC have been trying desperately for most of the year to find someone to take over the hospital; Pipeline, apparently, was the only taker. Selling or leasing the hospital is a necessary step, not a radical (or deceitful) idea.

That leads to Greenberg’s claim that I want to sell or lease “to the highest bidder.” I’ve never said that—he simply invented it. But California law requires that a public healthcare district charge at least “fair market value,” determined by an independent appraisal, for a sale or lease to a for-profit entity (like Pipeline). It can charge less to a nonprofit entity. But because the District has so much debt and such limited disposable income, my first choice as a responsible director would be a fair market sale or lease to a qualified hospital operator.

It’s also important to remember that any sale or lease, whether to a for-profit or nonprofit entity, would require approval of District voters. And a sale needn’t be a cash sale—the District could offer affordable terms as long as fair market value is obtained.

Greenberg also claims that “We pay the same taxes whether this hospital stays open or close [sic].” That’s up to the voters. If the hospital were to close again because of its huge operating losses and mounting debt—which is quite possible—District voters would have a choice.

They could decide to keep the $155/parcel tax and use the money for other legitimate healthcare purposes. (Greenberg claims this is illegal, but he’s wrong.) I think the District can do a lot of good supporting more cost-effective community health programs (which Greenberg thinks is stealing tax money, but again, he’s wrong).

Or the voters could decide to dissolve the District altogether—a reasonable choice, though not my first one. But remember, the District’s debt still must be repaid. For just the secured debt, that would require a parcel tax of $71/parcel or so. A bankruptcy settlement would add to this depending on the final terms—perhaps another $17/parcel for the $400k/year settlement I discussed earlier. This would be the same for detachment and non-detachment area residents, for as long as it takes to retire the secured debt and bankruptcy debt.

On the other hand, with a fair market lease or sale to a qualified operator, the District would have more options. The District could use the proceeds to either to pay down debt and/or to supplement disposable income. And the hospital likely would be in better hands, with a better governance structure, than the status quo. Then voters can choose to keep the parcel tax in place or dissolve the District, as discussed above. But in either case, the District would have less debt and more disposable income.

These are all items worthy of public discussion, not derision.

I think my illustration of Jim Horn's tax grab of earmarked tax dollars for a purpose different than the one which the voters passed a tax measure for is both informative and appropriate.

So is my characterization of Jim Horn's position during this election, and two years ago. That's when I wrote that Horn had emerged as the leading opponent of reopening the hospital during his campaign against the Doc and the Cop. Also accurate, as proven below, is my characterization of Jim Horn's current position as also being deceptive, and duplicitous.

Let's start with the fact that Jim Horn does not dispute the accuracy of my statement (in blue) below, or my conclusion, that Jim Horn is employing the same political doublespeak that he did when he ran unsuccessfully two years ago: he plans to kill the hospital without saying that he wants to kill the hospital.

Instead, what he continues to do, is explain WHY, if elected, he will remove the dedicated tax dollars for the hospital and at the same time insist upon rental/ lease payments, thereby forcing it to close.

Notice, readers, that Jim is not denying that he will do this if we are stupid enough to elect him.

Instead, Horn is justifying why he feels that this will be necessary to do.

Horn certainly has a strong and clearly articulated opinion about why he thinks this is the case. He makes this case here in his campaign website. He writes that he wants to sell or lease the building, he says, to a group Pipeline Management, making them pay money they do not have for the privilege of operating OUR public hospital, and then get the District out of the hospital business. Implying that the hospital can survive without the tax subsidy, while paying millions of dollars in leasing fees that it does not currently pay.

Jim Horn knows this will not happen. But he suggests to the public that it will. The appropriate term for this is deception.

Candidate Jim Horn does not have the integrity to tell the truth to the public, which is simply this: that he prefers to reallocate our tax monies to his benefactors at West County Health, and an escalated, legally unnecessary pay down of bankruptcy debt, INSTEAD of keeping the hospital and its life saving emergency room open for our community.

If Jim were saying to the public during his campaign that if elected he will do what it takes to force the hospital to close because he thinks that is what is necessary, then I would not be blowing the whistle on his duplicity and deception. I would simply disagree with him. And I would do so in a more civil manner.

But we all know that if Jim Horn was telling the truth about his intention, he would have no chance to get elected. So instead, he is once again running a campaign of deflection, duplicity and deception.

Just llike two years ago, Jim is saying, "of course" he wants to see the hospital survive, and IF it can, as the for-profit business that he believes it ought to be, after removing OUR tax dollars and reallocating them for services other than those we voted for (which happen to be offered by his political benefactors at West County Health Centers --hence the whistle blowing tax grab narrative) and IF they can do that after paying "market value" for the building, THEN OF COURSE he would allow it to stay open.

And, of course, Jim Horn knows full well that:

a) It is not profitable to operate a public hospital with an emergency room that provides costly life-saving services to anyone, regardless of their ability to pay.

b) that SWMC and Palm Drive's management have solicited every hospital operator in the region and gotten no takers (even WITHOUT charging for the building and WITH the subsidy money).

c) if he and Klich-Heartt and Lustig can form a Board majority and force their position upon the rest of us, our hospital and emergency room will be forced to close.

Jim Horn did the same exact thing two years ago, and I called him on his true intention then. He protested, and continued to deflect, and deceive, about it then, as he does now.

Back in 2014, he stated that he was all for reopening the hospital that he had just voted to close (rejecting the foundation led plan as hopeless and inadequate), as long as it could be done in a "fiscally responsible" manner.

Jim Horn wrote this in his ballot statement and repeated this as his mantra, knowing full well that he had already come to the conclusion that in his mind, it could NOT be done in a fiscally responsible manner. But NEVER stating this. (the accurate term for such a strategy, Jim is duplicity).

It was about three months after the grassroots uprising (that I am proud to have been part of) which helped the Doc and Cop get elected and form a new Board majority that would reopen the hospital, that Horn appeared in front of the District Board during public comment and actually told the truth about his position.

“I do not think we should reopen this hospital until we have completely paid off the bankruptcy,” he said. Translation: NEVER.

I was in the room when he said this, and thought to myself: Wow, I wish Jim Horn had the integrity to state this belief while he was running for office. There would have been no need to blow the whistle on his deception and duplicity. He would have lost the election without a contest.

But that’s not the way Jim Horn rolls.

So it is not my lack of civility that Jim Horn really objects to. It is the transparency-powered effectiveness that whistle blowing brings when someone is as duplicitous a candidate for public office as Jim Horn was in 2014, and remains today.

Horn, along with his politically influential backers, also object that I do not couch my whistle blowing in less dramatic terms. But I feel that the consequences of a closed emergency room, to my family and my neighbors and the sickest and oldest and youngest among us, are very dramatic. That the lives of some of us are at stake is not an exaggeration. Whistle blowing when the stakes are this high merits a very loud whistle.

It baffles me, and many that I speak to, that someone would run for a District Health Board in order to undermine and destroy the hospital that the Palm Drive District Health Board was specifically created to support.

I understand the altruistic motivation of leaders like Dan Smith, Joan Marler, Richard Powers, Dennis Colthurst, Jim Gude, Gail Thomas and Rob Cary, to donate money and time to save lives as they work on the incredibly challenging task of sustaining the only community hospital in modern American history to close and then reopen.

I do not understand, nor do I trust, the motivations of Jim Horn.

Why on earth does he not just get a job with West County Health already and help them with general health services if that’s what he is so intent upon doing?

And leave the rest of us to do the hard work of sustaining this life-saving community hospital.


from the story: Palm Drive Board Candidate Jim Horn’s Campaign of Deception to Close Our Hospital
Lately Horn is saying that he does not want to close the struggling hospital, which has in recent months moved closer to sustainability under the Pipeline Management group. He just wants to remove the $1 million subsidy it currently receives, and make the hospital pay the District Board millions of dollars per year that it does not have, as the market rate that the building would be worth to a private corporation that did not operate a hospital. Given the economic challenges of even breaking even with a tax subsidy earmarked for that purpose, even without paying rent, this would be impossible to achieve, as Jim Horn knows.

Jim Horn is employing the same political doublespeak that he did when he ran unsuccessfully two years ago: he plans to kill the hospital without saying that he wants to kill the hospital.

Quote:

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Posted in reply to the post by JimHorn:

To better understand the problems facing the Palm Drive Healthcare District, we need to ask the right questions.

But first, ...

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Here is what is wrong with Jim Horn's response:

1) Horn's entire argument is based on the false premise that someone will lease or buy the hospital 'at fair market' yet he is fully aware that there is no operator ready to do that, not Pipeline, Prime, Dignity, Adventist Health, St Josephs, Sutter, or any of the other hospital chains in California, all of whom have been approached. You can judge for yourself if this is duplicitous.

2) He can't add. (Or in this case he can't subtract)
The district gets $3.7M a year in taxes as he has suggested below.
The district currently uses $1.7M to service bond debt (as he has suggested below.)
Refinancing of the 2010 bonds, which is underway would save at least $200K/year
This would leave the district with $2.2M in 'discretionary funding'
Let's assume that the district applies $800K/year for 5 years to settle it's bankruptcy
(Horn's idea of paying $400K over ten years will never fly with creditors I can assure you.)
The district now has $1.4M in 'discretionary' income.
Now let's subtract the income from the detachment (40% of 1.4M = $560, 000)
This leaves the district with $840,000 to operate the district and maintain the hospital.
The operations of the district could be brought to less than $200K.
(Pipeline has already offered to administer the district for no additional cost but there are costs for audits and legal expenses.)

This leaves $640,000 to support the hospital in years 1-5 (while the bankruptcy is settled) and $1.2M after the bankruptcy is paid off. (To get to this calculation you have to reduce the income from the detachment area for the $800K that is paid to the bankruptcy. This frees up only $480,000 a year after year 5, not the full $800,000.)

3) Jim also ignores other income and advantages that health care districts have, which include
IGT funds: The hospital is currently waiting for $165,000 IGT funds.
Grants: The hospital is receiving $750,000 a year for 5 years.
USDA Grants: USDA will pay 15% of capital improvements as a grant
Loans: The state will lend money at 2.2% for capital projects (including major medical equipment)

4) A refinance of 2010 bonds can free up some reserve capital (at no cost to the district.)

Summary: Assuming that the detachment goes forward (there is still some doubt in my mind about this), the district would be able to provide $640,000 in tax subsidy to the hospital in year 1-5 and $1.2 in the following years. (This would also increase in time as bonds are paid off.) SWMC Inc. is already taking steps to build in this level of support and keep the hospital sustainable.

But more importantly, the district has the opportunity to get money from a variety of sources that can support the hospital. Already this year, this is over $1M in funding from that comes to the district because it is operating a hospital and would not if the hospital was not operated by the district.

Having a community owned hospital also makes it more attractive to donors. Over the past year, the hospital has received many millions of dollars in donations. Other community hospitals like Healdsburg and Sonoma Valley receive millions of dollars each year. While this money does not come from the district, it is vital to maintaining a hospital.

Having said all of that, Jim is correct in saying that I support leasing or selling the hospital to a qualified operator, when and if this keeps the hospital viable, not before. If JIm has an operator ready to do this, let's move forward but the district already issued an RFP in 2014 and there were no takers other than the foundation. Petaluma Valley has just gone through two years of RFP process and has no operator to take over at present.

What I don't support is his plan to withhold financial support to the hospital by spending tax dollars on 'any other healthcare initiative the District might want to support' . Once again, you can judge if it is duplicitous to say that the district can't provide support to the hospital because it wants to spend its money elsewhere.

I should also make clear that I do not have a problem with the district spending grant money on other programs than the hospital as is the case with the Prime grant that the hospital has received. Some of this money goes to integrating with West County Clinics. This program is paid for by the state and is helping people transition from the hospital to home care, a very important service. But these programs need to be coordinated with the hospital.

At Barry's suggestion, I am editing this post to include my endorsement of Rob Cary and Gail Thomas for the district board. My reasons are very simple, nothing Jim Horn has done or said over the past years has demonstrated that he is at all committed to having a hospital.

By contrast, Rob Cary volunteered for many months as the project manager for getting the hospital opened and has developed plans to make the hospital more energy efficient. Gail Thomas has devoted herself to raising awareness and money for the hospital for many years. These are the people we need on the board.

Again with the personal attacks? Please see my comments in blue below--and this is my last response to the Smith-Greenberg tag team. If any actual candidates for the District board (i.e., Thomas or Cary) want to start a discussion, that would be great.

Jim Horn

Quote:

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Posted in reply to the post by farmerdan:

Here is what is wrong with Jim Horn's response:

1) Horn's entire argument is based on the false premise that someone will lease or buy the hospital 'at fair market' yet he is fully aware that there is no operator ready to do that, not Pipeline, Prime, Dignity, Adventist Health, St Josephs, Sutter, or any of the other hospital chains in California, all of whom have been approached. You can judge for yourself if this is duplicitous.

I know that the District/SWMC approached other potential hospital operators, but I have no knowledge of the proposed terms or conditions. No one in the public does, because the District discussed these matters in closed session using a "trade secret" exemption to the Brown Act. As a result, I don't know if potential operators were asked to sign a management agreement, or actually buy or lease the hospital. I certainly don't know if "fair market value" terms were discussed with anyone.

2) He can't add. (Or in this case he can't subtract)

Smith makes different assumptions than I did, then says I can't add (or subtract) because my results are different than his. That's illogical and another personal attack.

The district gets $3.7M a year in taxes as he has suggested below.
The district currently uses $1.7M to service bond debt (as he has suggested below.)
Refinancing of the 2010 bonds, which is underway would save at least $200K/year

This is Smith's WAG ("wild-ass guess," a time-honored engineering term) as to what refinancing will yield. The process has just started, and no one knows if or under what terms refinancing may occur.

This would leave the district with $2.2M in 'discretionary funding'
Let's assume that the district applies $800K/year for 5 years to settle it's bankruptcy
(Horn's idea of paying $400K over ten years will never fly with creditors I can assure you.)

$400k/year for 10 years isn't my "idea," it was just an assumption used for purposes of illustration. I'm happy using Smith's assumption, although it results in even less disposable income for the District.

The district now has $1.4M in 'discretionary' income.
Now let's subtract the income from the detachment (40% of 1.4M = $560, 000)
This leaves the district with $840,000 to operate the district and maintain the hospital.

This is actually less than I had estimated using my assumptions ($960k/year)

The operations of the district could be brought to less than $200K.

Again, this is Smith's WAG. I don't know anyone else who thinks this.

(Pipeline has already offered to administer the district for no additional cost but there are costs for audits and legal expenses.)

Pipeline cannot administer the District; it would create obvious conflicts of interest and loyalty, although I know that Smith doesn't take such things very seriously. Also, if something seems too good to be true (i.e., administrative services"for free"), it usually is.

This leaves $640,000 to support the hospital in years 1-5 (while the bankruptcy is settled) and $1.2M after the bankruptcy is paid off. (To get to this calculation you have to reduce the income from the detachment area for the $800K that is paid to the bankruptcy. This frees up only $480,000 a year after year 5, not the full $800,000.)

If by "support the hospital" Smith includes maintenance and replacement of the physical plant and equipment, then I agree that's a priority for the District for as long as it owns the building. But that's not the same as subsidizing the hospital's operating losses.

3) Jim also ignores other income and advantages that health care districts have, which include
IGT funds: The hospital is currently waiting for $165,000 IGT funds.
Grants: The hospital is receiving $750,000 a year for 5 years.

The total of both these items is about $915k/year. The hospital is currently suffering operating losses of over $9 million/year, or ten times that amount.

USDA Grants: USDA will pay 15% of capital improvements as a grant
Loans: The state will lend money at 2.2% for capital projects (including major medical equipment)

I don't know many voters who want the District to INCREASE its debt load.

4) A refinance of 2010 bonds can free up some reserve capital (at no cost to the district.)

Again, a WAG...

...
Having said all of that, Jim is correct in saying that I support leasing or selling the hospital to a qualified operator, when and if this keeps the hospital viable, not before. If JIm has an operator ready to do this, let's move forward but the district already issued an RFP in 2014 and there were no takers other than the foundation. Petaluma Valley has just gone through two years of RFP process and has no operator to take over at present.

Petaluma Valley had at least one offer to BUY the hospital, but it chose to pursue another lease with St. Joseph (who run Memorial Hospital in Santa Rosa). The negotiation with St. Joseph recently broke down, but the purchase offers may still be viable.

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Jim,

Thanks for responding one last time, though you might recall that this is your thread, we are responding to you.
And sorry if I was too personal by saying you can't add! I am sure you are excellent at math of all kinds.
And I certainly appreciate that you have never said anything personal about me, though I seem to recall...

I know that you don't want to reply, but here are some things others might want to think about:

1) What Jim terms 'wild ass guesses' are nothing of the kind, they are based on analysis of the facts. In the case of the bonds, the bond market has dramatically changed since 2010 with much lower rates. That being said, the district has to raise its bond rating, which is a more lengthy discussion. In the case of the district's operations I think you will find $200K to be an average of the years when the district was operating the hospital. I might be off some but even Jim's figure of $300K does not change the picture much.

2) There is no inherent conflict for the CEO of the hospital to administer the district. Jim, I am sure, is well aware that the CEO of the hospital is a public employee by law no matter who writes his check and as such has a primary fiduciary responsibility to the district. When Brim managed the hospital for the district, their CEO and CFO administered the district. Every hospital CEO before and since has administered the district. We have to understand here that we are talking about administering, not making decisions. This involves distributing agendas, keeping minutes, bookkeeping, and other tasks at the direction of the board.

3) If Jim assumed $960,000 of discretionary funds and $300,000 of district operations, he got to the same point that I did; that the district can afford to provide $640,000(my number)-$660,000(Jim's number) to the hospital in year 1-5. What he said in his earlier post was that 'there was no money' to support the hospital. This was simply not true unless you assumed that the district would spend it on other things.

4) Jim continues to repeat the operating losses from startup knowing that these were primarily startup costs, were covered by donations and that Pipeline is on track to make operations profitable. Please be aware that to open a hospital, you have to have everything and everyone in place for months before you get licensed. Then, you have to operate it for many months with no income at all! And, it takes many more months to get insurance contracts, some of which are just now being completed.

5) All of the money that the district has provided to date has been spent on the building and medical equipment but there is no reason that the district can't fund programs that benefit the community. The MSA is VERY clear on this point. Jim agrees that the district should maintain the building and equipment 'as long as the district owns it.' The only way for the district to sell the building at this point is to close the hospital so continuing to improve it's own assets is the responsible choice for the district.

6) Jim says 'I know that the District/SWMC approached other potential hospital operators, but I have no knowledge of the proposed terms or conditions.' I seem to recall that Jim was present when SWMC presented Pipeline as a possible manager of the hospital and explained in great detail the discussions that we had with other hospital systems. (If I recall correctly, this was in two different public meetings.)

7) Jim chose to ignore everything I said about the district being the recipient of other funding to support the hospital, a very important point.

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Posted in reply to the post by JimHorn:

Again with the personal attacks? Please see my comments in blue below--and this is my last response to the Smith-Greenberg tag team. If any actual candidates for the District board (i.e., Thomas or Cary) want to start a discussion, that would be great.

Jim Horn

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When the River Area withdraws from the district do they get to withdraw from the debt that was incurred when they were part of the district?

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Posted in reply to the post by Goat Rock Ukulele:

When the River Area withdraws from the district do they get to withdraw from the debt that was incurred when they were part of the district?

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The short answer is no, they are obligated for debts of the district. The long answer is as follows:

They will continue to pay taxes to cover all debts of the district that have accrued up to the date of detachment.
This includes bonds, bankruptcy and any other debts (I am not sure if the district has any current payables, but these would also be included.)

They will not be responsible for any debt of the current hospital operations itself because the non-profit is responsible for any hospital debt. (Nor will any other taxpayers.) While Jim Horn has claimed that the district would be responsible for debts of the current hospital operations, this is completely false and has been confirmed by multiple attorneys in writing (which Jim is well aware of).

This is really important to understand: The hospital has been opened with over 90% donated money and the tax payers have no liability for its debts if it closes. This is a great deal for the community!

Depending on how the district settles its bankruptcy, my estimate is that after detachment, the detacher tax will go to about $125/parcel/year (from the current $155 note: this is just an educated guess, it could be some less) for about 5 years (until the bankruptcy debts are cleared.) Then, their tax will likely go to about $85 (or so) until the bonds are fully paid off. (This will actually happen in a couple of steps since the 2005 bonds will pay off before the 2010 bonds.)

There are other possible outcomes. If the hospital was to close, the rest of the district might detach or LAFCO might get rid of the district. In this case, the bond holders could have the right to accelerate their payments and collect the full $155 until they are fully paid off (about 8-10 years depending on how the bankruptcy is settled.) In a case such as this, the detachers would be in the same boat as everyone else and have to pay the $155 (though for the much shorter period.) There are a couple of other possible outcomes but these are more obscure at present. Sale of the hospital real estate would reduce the period of payoff if the hospital is closed if the proceeds were applied to debt.