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  1. TopTop #1
    Peacetown Jonathan's Avatar
    Investigative Reporter

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

    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.

    In 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.


    (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 as the number two man and Executive Vice President of a major San Francisco public relations firm called Gauger & Associates, which lists, 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, 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.


    Dan Smith
    Dan 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 imprudentlyI 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)

    “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.



    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.

    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.


    Michael Sweet and David Heaslett

    Heaslett is an independent, small town attorney 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.

    Jonathan Greenberg is founder and CEO of Progressive Source Communications and a Huffington Post blogger. An author and investigative journalist, his work has appeared in the New York Times, The New Republic, GQ, New York Magazine, Forbes and Money. Jonathan resides in Sebastopol.
    Last edited by Peacetown Jonathan; 06-07-2014 at 08:23 PM.
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  2. TopTop #2
    Peacetown Jonathan's Avatar
    Investigative Reporter

    How A Bondholder-Friendly Shutdown Playbook Secretly Sunk Palm Drive Hospital

    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/showt...879#post179879
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  4. TopTop #3
    unclebillballadeer
    Guest

    Re: How A Bondholder-Friendly Shutdown Playbook Secretly Sunk Palm Drive Hospital

    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-...01495476670626 .

    Here is the link to the the other related FB page:
    https://www.facebook.com/PalmDriveHealthCareFoundation?fref=ts

    Thanks again...
    "Uncle"Bill
    Last edited by Barry; 05-23-2014 at 04:18 PM.
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    scamperwillow's Avatar
    scamperwillow
     

    Re: How A Bondholder-Friendly Shutdown Playbook Secretly Sunk Palm Drive Hospital

    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

    Click the link above to see the article.

    Last edited by Barry; 05-23-2014 at 04:41 PM.
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  8. TopTop #5
    Peacetown Jonathan's Avatar
    Investigative Reporter

    What Would You Do In Their Shoes?

    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.



    Quote scamperwillow wrote: View Post
    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.
    Last edited by Peacetown Jonathan; 05-24-2014 at 02:08 PM.
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  9. TopTop #6
    farmerdan's Avatar
    farmerdan
     

    Re: What Would You Do In Their Shoes?

    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
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  10. TopTop #7
    Sara S's Avatar
    Sara S
    Auntie Wacco

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

    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
    Last edited by Barry; 05-23-2014 at 04:20 PM.
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    Dianala's Avatar
    Dianala
     

    Re: What Would You Do In Their Shoes?

    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.

    Quote Peacetown Jonathan wrote: View Post
    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...
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    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.
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    farmerdan's Avatar
    farmerdan
     

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

    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
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    Dustyg's Avatar
    Dustyg
     

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

    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!

    Quote farmerdan wrote: View Post
    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
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  20. TopTop #12
    droffeld's Avatar
    droffeld
     

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

    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".

    Quote bikegal50 wrote: View Post
    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.
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  22. TopTop #13
    Jim Wilson's Avatar
    Jim Wilson
     

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

    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.
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  24. TopTop #14
    Gus diZerega's Avatar
    Gus diZerega
     

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

    Well, if they did I missed it as well.

    Quote Jim Wilson wrote: View Post
    ... 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.
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  26. TopTop #15
    tommy's Avatar
    tommy
    Supporting member

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

    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.

    Quote Jim Wilson wrote: View Post
    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.
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  28. TopTop #16
    sebastopolian
     

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

    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.
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  30. TopTop #17
    Gus diZerega's Avatar
    Gus diZerega
     

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

    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.
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  32. TopTop #18
    farmerdan's Avatar
    farmerdan
     

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

    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
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  33. TopTop #19
    Dianala's Avatar
    Dianala
     

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

    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.


    Quote farmerdan wrote: View Post
    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. ...
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  35. TopTop #20
    Sarina Ferguson
     

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

    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.

    Quote droffeld wrote: View Post
    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".
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  37. TopTop #21
    cynctysings's Avatar
    cynctysings
     

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

    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.
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  39. TopTop #22
    farmerdan's Avatar
    farmerdan
     

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

    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
    Last edited by Bella Stolz; 05-27-2014 at 12:29 PM.
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  40. TopTop #23
    newclay's Avatar
    newclay
     

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

    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?

    Quote sebastopolian wrote: View Post
    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.
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  42. TopTop #24
    theindependenteye's Avatar
    theindependenteye
    Supporting Member

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

    Quote newclay wrote: View Post
    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
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  43. TopTop #25
    Jim Wilson's Avatar
    Jim Wilson
     

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

    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.
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  45. TopTop #26
    farmerdan's Avatar
    farmerdan
     

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

    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
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  47. TopTop #27
    PDines's Avatar
    PDines
     

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

    Quote Jim Wilson wrote: View Post
    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.
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  49. TopTop #28
    Barry's Avatar
    Barry
    Founder & Moderator

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

    There's a thoughtful opinion article in the Sonoma West from May 7th entitled "Palm Drive Foundation proposal not the answer" 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.
    Last edited by Barry; 05-27-2014 at 06:34 PM.

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  51. TopTop #29
    newclay's Avatar
    newclay
     

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

    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'

    Quote theindependenteye wrote: View Post
    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...
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  52. TopTop #30
    peggykarp's Avatar
    peggykarp
     

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

    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.
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