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  1. TopTop #1
    farmerdan's Avatar
    farmerdan
     

    Palm Drive Truth or Friction

    There continues to be a fair amount of confusion surrounding Palm Drive Hospital including information in the newspaper that does not represent the facts as we know them. Here are some of the major topics:

    It has been represented in multiple places that Palm Drive lost $64 million over the last 13 years.

    The only reliable source of information for financial reports for hospitals is the Office of Statewide Hospital Planning and Development (OSHPD) that holds audited financials for all hospitals in California at : https://siera.oshpd.ca.gov/FinancialDisclosure.aspx

    Their data holds financials for Palm Drive from fiscal 2002 (July 2001-June 2002) to fiscal 2013 (July 2012 to June 2013), which is the last full year of operations for the hospital. Here is what their data shows:

    Year Net Revenue Profit/(Loss)
    2002 $16,024,405 $1,279,494
    2003 $18,591,347 ($1,654,641)
    2004 $20,290,573 $377,280
    2005 $21,498,803 $431,248
    2006 $20,727,125 ($2,746,031)
    2007 $19,504,502 ($3,504,508)
    2008 $26,837,974 ($2,238,851)
    2009 $28,746,720 ($174,013)
    2010 $35,649,069 $5,062,821
    2011 $32,175,917 ($83,035)
    2012 $32,426,726 ($466,695)
    2013 $33,543,151 ($1,425,624)
    Totals $272,473,161 ($5,142,555)

    What this shows is that the hospital made money in some years and lost money in others with an overall loss of $5 million on $272 million in revenue (not the reported $64 million.) This loss represents 1.9% of revenue for this 11 year period.

    We know that the large losses starting in 2006 were the result of closure of the ICU, a decision that was anticipated to save the hospital $1 million annually but ended up costing $3 million. This decision along with a few others drove the hospital into bankruptcy in early 2007. When the ICU was reopened in fiscal 2008 with Dr. James Gude, it sent the hospital on a growth path that resulted in a very small loss in 2009, a $5M profit in 2010 and a small loss in 2011. It wasn’t until 2012 and 2013 that the hospital got into serious trouble again.

    While this is obviously not a stellar record, it illustrates that good management makes the difference between profits and losses and that the decisions of hospital leaders are consequential to financial performance.

    It has been represented in multiple places that it will take ‘millions of dollars in building repairs and upgrades to reopen the hospital.’ Some newspaper opinion pieces have pegged this at $20 million.

    The sources for the information below are the facility manager for the district and the Foundation’s ongoing study of needed facility repairs and upgrades.

    The hospital facility manager testified in public session that after a study, he estimated the cost of facility upgrades to reopen in a similar condition as the hospital was closed to be ‘in the neighborhood of $250,000’

    The Foundation has had a study underway by two facility experts for the past 2 months working with the district’s facility manager to identify not only required repairs but desirable refurbishing and future facility needs. This includes new floors, cabinets, and paint for areas like the emergency room, which is not a technical requirement of reopening but a desirable upgrade. The final budget for facility capital improvements is still awaiting bids from contractors and subcontractors but the preliminary budget is somewhere close to $1 million in year one, well within the Foundation’s plans.

    Preliminary projections for future years are also in the $1million a year range for 5-7 years. It should be understood that these figures are also well within the anticipated capital improvement budget that the Foundation is developing and half of what the district would have available from tax revenue. They also do not reflect the possibilities for grants and other funding for solar, HVAC upgrades and other energy savings, all of which could lower costs.

    It has been proposed that all we need in Sebastopol is urgent care with lab and imaging.

    The source for the following information is the billing history for the Palm Drive Emergency Room physicians. (When a patient is treated in an emergency room, physicians bill their insurance based on the diagnosis of the patient so physician billing indicates whether the patient’s condition was of an urgent (low acuity) or emergent (high acuity) nature.)

    These data for 2013 indicate:

    Low Acuity High Acuity Total Visits
    (Urgent Care) (Emergency)
    1,111 6,226 7,337
    Ambulance Arrivals 1,243
    Arrive by Other Means 6,094
    Code Strokes 97

    What this data shows is that only 15% of emergency room visits were rated as urgent (low acuity) by the physician on duty. Also, only 17% of the ER visits arrive by ambulance.

    It also shows that 97 people were treated for possible stroke. (Not all code strokes turn out to be a stroke so we don’t know from this how many actual strokes there were.) It is also important to note that the prior year had only 76 strokes so more strokes were showing up at Palm Drive in 2013 likely because the word was getting around that Palm Drive had a nationally recognized stroke program.

    The important conclusion to draw from this is that an urgent care would only be appropriate for a small number (1,111) of the patient visits that the Emergency Room had in 2013. This also indicates that having an urgent care would not generate anywhere near enough traffic to support a lab or imaging department.

    This view is echoed by the proposal that Memorial Hospital offered to the district to run urgent care with a small xray outside of the hospital (no MRI or CT scan.) Memorial would want the District to provide $2.5 million in subsidies to run 24/7 urgent care, more than the taxes the district currently has available.

    It is generally understood that urgent care only works financially in an urban environment where there is a sizable population of patients who do not have a family doctor, a condition that does not exist in Sebastopol. But what is more important is that urgent care will not deal with the 97 code strokes, or the 1,243 ambulances or the 6,226 emergency cases. They would have to go elsewhere.

    It has been stated in various places that the Foundation is dragging its feet in presenting a financial plan to the District.

    Developing a financial plan to restart a hospital is a complex and time consuming process and one not to be taken lightly. The Foundation has had Paul Selivanoff, a CPA with many years of experience in hospitals both in start up and turn around situations working on this process for over 3 months.

    While many of the financial details that have been worked out give confidence that Sonoma West Medical Center will be a viable ongoing business with a positive bottom line, a number of startup questions remain to be finalized including:

    Pre-opening personnel requirements
    Medical and Laboratory Equipment start up costs
    The district’s bankruptcy settlement plan
    Timing of obtaining accreditation and Medicare billing
    Options for factoring Accounts Receivable

    Without reliable data for these and some other important questions, it is not possible to produce final, accurate start up capital requirements. While we are all anxious to see the hospital opened, it would be unwise to create the expectation that financial projections are complete until they actually are.

    It has been stated in opinion pieces in the press that the Electronic Medical Record software that the Foundation is proposing to use is not Meaningful Use certified.

    The HarmoniMD meaningful use 2011 certification is still active. The inpatient certification can be viewed at the following site: https://oncchpl.force.com/ehrcert/eh...ting=Inpatient

    The outpatient certification can be viewed at this site:
    https://oncchpl.force.com/ehrcert/eh...ing=Ambulatory

    It is the intention of EHRI Inc. to certify HarmoniMD under 2014 standards once there is acceptance of the plan to reopen the hospital and acceptance testing with the hospital medical team has been completed but this process costs $25,000 and there is no reason to do it unless the hospital is going to reopen and use this software, both conditions that remain to be finalized.

    However 2014 certification is not required for Meaningful Use Stage 1 as indicated in this link to CMS rules regarding certification under 2011 standards: https://www.cms.gov/Regulations-and-...ilityChart.pdf

    In this document, we see that hospitals can become certified for Meaningful Use Stage 1 with 2011 certified software systems. This would allow the hospital to reopen and be Meaningful Use Certified Stage 1 even if the software was not certified under 2014 standards though there is no reason to believe this would be the case.

    If you have read this far, hopefully you are a bit more educated about the hospital and plans to open Sonoma West Medical Center on the Palm Drive campus. If you would like additional information, feel free to email me or post here. I am happy to dialogue with anyone about this important subject.

    An enlightened citizenry is indispensable for the proper functioning of a republic. Self-government is not possible unless the citizens are educated sufficiently to enable them to exercise oversight… Thomas Jefferson

    Farmer Dan
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  3. TopTop #2
    Peacetown Jonathan's Avatar
    Investigative Reporter

    Jim Horn's $64 Million problem


    Thank you Dan for the work you do for the hospital reopening effort, in getting the real facts and figures into this transparent and important public forum.

    Quote farmerdan wrote: View Post
    There continues to be a fair amount of confusion surrounding Palm Drive Hospital including information in the newspaper that does not represent the facts as we know them. Here are some of the major topics:
    ...
    Last edited by Barry; 10-26-2014 at 01:57 PM.
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  4. TopTop #3
    farmerdan's Avatar
    farmerdan
     

    Re: Jim Horn's $64 Million problem

    Jonathan,

    I hesitated to post anything on Wacco because conversations turn into shouting pretty quickly.
    I had hoped that this thread would be one of information and dialogue, not politics.
    Your comments are not helpful to this process. Please use your own thread to hammer people.

    Farmer Dan
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  6. TopTop #4
    JimHorn's Avatar
    JimHorn
     

    Re: Palm Drive Truth or Friction

    Dan -- I agree that there is some truth and some fiction in what you wrote:

    “It has been represented in multiple places that Palm Drive lost $64 million over the last 13 years.”

    Since you don’t name a source, it’s possible some guy in Outer Mongolia has been saying this, but no one I’ve heard. I have been using the $64 million figure and saying something similar, with one very important difference.

    “The hospital lost $64 million in the last 13 years, and the District is in bankruptcy for the second time,” has appeared on my website (https://jimhornforpalmdrive2014.com/) and elsewhere. I’m talking here about the operating profit/loss for the hospital as a business, and not the overall income/expense of the District that includes tax subsidies and one-time payments. The number I use comes directly from the same OSHPD data that you cite, and I classify operating profit/loss the same way that OSHPD does. For example, for the 2009-10 fiscal year, the data show an operating loss of about $1.8 million (see attached page 2 of the 2009-10 OSHPD document). The $64 million figure comes from combining the $55 million total operating losses that OSHPD shows from 2002-2013 (12 years) and adding the District’s unaudited estimate of $8.9 million for the hospital’s loss in 2014. So, for 13 years, the operating loss is about $64 million. This is a measure of how well the Hospital operated as a business.

    Now, you’ve recently stated that Palm Drive’s parcel tax proceeds should be included as part of the hospital’s operating income, even though that’s not the way OSHPD sees it. You said that a public school, for example, survives almost entirely on taxes, so their entire budget is an operating loss unless you count the tax income. But public schools aren’t businesses. They’re forbidden by law from charging students for anything related to their education. So, a school’s “operating income” is almost entirely its tax receipts.

    Palm Drive Hospital, on the other hand, was primarily a fee-for-service business; and unfortunately, the fees and other operating income were always less than the operating expenses. The parcel tax was a nice bonus, adding roughly 12% to 14% to the District’s income, but it’s not operating income, and it could be reduced or perhaps even eliminated in the future. Unfortunately, about 45% of the parcel tax proceeds are being used currently to pay for old debt, leaving even less available to partially offset operating losses.




    “It has been represented in multiple places that it will take ‘millions of dollars in building repairs and upgrades to reopen the hospital.’ Some newspaper opinion pieces have pegged this at $20 million.”

    Again, that guy in Outer Mongolia must have been very busy, because no one I know has said that. What I’ve said is this: “The hospital building is 40 years old and needs millions of dollars of repairs and upgrades.” Notice the absence of the last four words in your quote: “to reopen the hospital.” We appear to agree completely with what I’ve actually said—millions are needed for repairs and upgrades, but not just to reopen the doors. Your estimate appears to be about $6 - $8 million ($1 million to open and another $1 million/year for 5-7 years).

    The $20 million figure comes from a 2013 study prepared for the District by KMD Architects, a firm with substantial hospital design and construction experience. That study looked at costs for repairs and upgrades to the hospital along with reorganizing and expanding some departments to alleviate cramped conditions and accommodate growth. The District’s facility manager, Clark Austin, recently revealed an error in that study’s cost summary. However, after the error is corrected, the total remaining is still $19.9 million—or about $20 million.

    Once again, no one I know has ever said that $20 million was required to reopen the hospital. In an article published in Sonoma West earlier this month, Sebastopol City Councilman John Eder did say the following: “An estimated $20 million in infrastructure repairs/upgrades to the hospital have been identified. Some are required to reopen, with most capable of being deferred. They will need to be funded at a future date, however, with a likely increase in cost.” Clearly, John does not say that $20 million is needed “to reopen the hospital.”

    But is $20 million still a reasonable ballpark estimate of needed repairs and upgrades over time? Actually, yes it is—if you accept the KMD study’s premise that the emergency room, the operating rooms and recovery room, and the ICU would need to be remodeled and expanded to accommodate growth. And, in fact, the Foundation’s proposal includes growing the hospital’s business in these areas. For example, the proposal anticipates increasing ER traffic by 40%, which would bring it to near 11,000 visits per year. The KMD study says that the existing facility is undersized at 8000 visits per year. Their estimate for this work alone is an additional $3 million.


    “It has been proposed that all we need in Sebastopol is urgent care with lab and imaging.”

    Again, you don’t say who’s doing this proposing. I’m not—my position is to reopen the hospital “in a fiscally responsible and sustainable manner.” If that’s not possible, I do support providing urgent care services in Sebastopol and in the River area, which has been woefully underserved by the District in the past. I think we should provide the best health care services we can afford, even if less than we hope for.

    Since I haven’t seen the data, I can’t comment on your statement that only about 15% of our ER cases qualified as urgent care in 2013. However, I do know that back in April, Dr. James Gude proposed turning Palm Drive Hospital into an urgent care center that would be “less expensive and as good as an emergency room for 95% of the presenting cases.” He also stated that “the major demand of West County residents is having available urgent care 24/7.” A copy of Dr. Gude’s April 2014 proposal is attached.


    “It has been stated in various places that the Foundation is dragging its feet in presenting a financial plan to the District.”

    Again, I haven’t heard or read anyone say the Foundation is “dragging its feet,” although I’m sure some people are thinking it. But we both agree that the Foundation has not provided a financial plan to the District, and without that plan, it’s impossible to evaluate whether its proposal is financially responsible and sustainable.


    It has been stated in opinion pieces in the press that the Electronic Medical Record software that the Foundation is proposing to use is not Meaningful Use certified.”

    You’re correct that HarmoniMD’s 2011 certification is still active. However, unless recertified under the stricter 2014 standards, I believe that the 2011 certification will be insufficient next year, when the Foundation proposes to reopen the hospital and actually begin implementing HarmoniMD. The CMS document you reference clearly states that it applies only to “Program Year 2014.” I’m attaching another CMS document that shows requirements after 2014.

    In case WaccoBB readers are unaware, “Farmer Dan” is actually Dan Smith. Mr. Smith and Dr. Gude own and market HarmoniMD through their companies OffSite Care and EHRI. In addition, OffSite Care provided ICU coverage and hospitalist (in-house doctor) coverage to Palm Drive Hospital under contract with the District.
    Attached Files
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  8. TopTop #5
    farmerdan's Avatar
    farmerdan
     

    Re: Palm Drive Truth or Friction

    Jim,

    Thanks for your response.
    For the record, I don't know anyone in Outer Mongolia.

    And actually, the title I used says 'friction' not 'fiction.'
    I appreciate your taking responsibility for some of these statements including:

    About your statement: “The hospital lost $64 million in the last 13 years, and the District is in bankruptcy for the second time,”

    I believe this statement appears on your ballot argument, your direct mail piece and your website.
    This post is the first time I have seen you make the statement that these are operating losses, not overall losses. That being said, there are a number of points that you may not be considering including:

    a) Bond interest has been included in operating expenses, but tax revenue is in non-operating revenue. Therefore, operating losses are overstated in your equation by the amount of bond interest so your figure of $64M is overstated by the total of bond interest. I don't know what the number is because other interest is included with bond interest.
    b) Non-operating revenue includes many things besides taxes. For example donations, Government subsidies, etc. These are revenues generated because there is a hospital, not because there is a district so removing them from the equation as you have done is not reflective of the hospital's finances.
    c) Most hospitals depend on philanthropy, taxes, grants, and other revenue to support the delivery of care. Hospitals like Memorial receive large sums every year from non-operating revenue.

    If you said "The Hospital lost $48 million (I'm just guessing what the interest from bonds is) from operations and the District had a $5 million loss", I would have no argument with your statement (though the average person would have a difficult time discerning the district from the hospital given that the hospital is the only operation the district ran.)

    Certainly, you and I appear to agree with the fact that the hospital has not been well managed 'as a business' something I have tried to point out for many years. I guess my nuance is that it doe not have to be badly managed and did much better in the years it had good management.

    I agree with your analysis that the hospital is unlike a school in the respect that it is a 'fee for service' business. However to the extent that a hospital provides services free to those who cannot pay (something every hospital does) and to the extent that its mission is to save lives like a fire department or police department, it is more like a school. The voters decided to tax themselves twice because they took the view that emergency services close to home was a civic need, not just a fee for service business.

    About your statement “The hospital building is 40 years old and needs millions of dollars of repairs and upgrades.”

    Thank you for clarifying that you are not referring to startup costs, which has not been clear from your earlier statements.

    About your statement: "But is $20 million still a reasonable ballpark estimate of needed repairs and upgrades over time? Actually, yes it is—if you accept the KMD study’s premise that the emergency room, the operating rooms and recovery room, and the ICU would need to be remodeled and expanded to accommodate growth."

    Nothing in the Foundation's review of the facility indicates the need for additional floor space being added to building, which were the primary costs estimated in this study. Also, there is no indication that additional Operating theaters or more ICU beds would be needed. As a matter of fact, there is adequate bed capacity in the ER to double traffic using a 'No Wait' ER service model by including the PT space for vertical bedding and lowering door to doc times.

    The Operating Rooms were normally in use only 4 days a week and at far less than capacity. Before one thinks of building a new OR, it is obvious that using them to capacity and adding evenings and weekends makes a lot more sense.

    What puzzles me is why anyone would have assumed in 2013 that the operations would be growing to the extend that more square footage was needed. For that matter, what figures are you using that lead you to believe that the hospital will grow beyond capacity? I know of no such study nor can I even imagine one. None of the experts we are working with has this view.

    About your statement: Since I haven’t seen the data, I can’t comment on your statement that only about 15% of our ER cases qualified as urgent care in 2013.

    I believe I provided the data and the source. As a district board member, you have access to it so you can check it out.

    About your statement: 'I’m not—my position is to reopen the hospital “in a fiscally responsible and sustainable manner.” If that’s not possible, I do support providing urgent care services in Sebastopol and in the River area, which has been woefully underserved by the District in the past.'

    Glad to hear that we agree that the hospital should be reopened 'in a fiscally responsible and sustainable manner.' We have no argument here. I know of no one who wants to open the hospital in a fiscally irresponsible and unsustainable manner.

    I don't agree that the River area has been 'woefully under served' given that the data indicated about 400 ambulance trips a year from the river area and many river residents served in the hospital emergency room.

    I am not saying that the district could not and should not have done more, for all of the outlying areas and if you look at the Foundation plan, there is $500,000 that the district would have to accomplish these things.

    You did not comment on the viability or cost of urgent care for Sebastopol or other areas or the fact that ambulances, strokes and emergency cases cannot be served in an urgent care center. I'd be curious how you view this in light of the proposal from Memorial Hospital.

    I appreciate your quoting Dr. Gude, but I believe he would not agree today with his earlier statements nor would any of the other physicians in town so this is a bit of cherry picking on your part. Every physician I have talked to says we need an ER, not urgent care.

    About your statement: 'You’re correct that HarmoniMD’s 2011 certification is still active. However, unless recertified under the stricter 2014 standards, I believe that the 2011 certification will be insufficient next year, when the Foundation proposes to reopen the hospital and actually begin implementing HarmoniMD. The CMS document you reference clearly states that it applies only to “Program Year 2014.” I’m attaching another CMS document that shows requirements after 2014.'

    Thank you for acknowledging that the HarmoniMD system is still certified.I guess our friend from outer Mongolia was the one saying it wasn't, not you.Do you have a basis in fact for your statement 'I believe that the 2011 certification will be insufficient next year' or is this just a personal belief? We have been in consultation with experts on this and they are actually saying they believe the standards will be lowered, not raised. But either way, we will be upgrading certifications as I indicated in my post if the decisions are made to reopen the hospital and use HarmoniMD.

    About Your Statement: In case WaccoBB readers are unaware, “Farmer Dan” is actually Dan Smith. Mr. Smith and Dr. Gude own and market HarmoniMD through their companies OffSite Care and EHRI. In addition, OffSite Care provided ICU coverage and hospitalist (in-house doctor) coverage to Palm Drive Hospital under contract with the District.

    Since you feel this is important information, some clarity might be helpful:

    OffsiteCare Inc., led by Dr. James Gude, the renowned intensivist is a telemedicine company that provides ICU, hospitalist, and specialist physicians to Northern California hospitals including Fort Bragg, Petaluma Valley, San Leandro, Clear Lake, Willits, Arcata, and others. OffSiteCare was not providing hospitalist services when Palm Drive closed, but was providing stroke, pediatric critical care, dermatology, and other services to the Palm Drive ICU and Dr. Gude was the ICU director. These were paid services but Dr. Gude also provided free continuing education and other services at Palm Drive. Under the foundation plan, OffsiteCare would resume these services and possibly provide additional specialists. OffSiteCare Inc. is owned by physicians and provides services to hospitals under contracts. Obviously, you can't provide physicians to a hospital for free. You can find out more at:

    Electronic Health Records International (EHRI) is the maker of HarmoniMD, a cloud based Electronic Health Record (EHR). I am a minority investor and it's current CEO, (a position for which I am paid $1 per year whoo hoo!) EHRI is focused on providing affordable, cloud based EMR systems to the developing world. We are working in a number of countries now and are in the early stages of implementation for hospitals and clinics.

    We have proposed donating HarmoniMD to Sonoma West Medical Center including training and implementation in order to reduce the normally significant cost EHR for at least 5 years. Having said this, the final decision on what system to use will be left to the management and physician staff after a more thorough review of the hospital's needs can be performed.

    I know our friend from Outer Mongolia has made claims of conflicts of interest about all of this, but I wish he would show us how you make money by donating services, I have never made that work!If we try to rule out working with everyone who was ever paid money by the hospital, there would be no doctors, no nurses (including your wife), no administrators, no vendors and no hospital. Please think this through!

    Summary

    As stated earlier, I appreciate your responding and taking credit for some of what is being spread as it helps make more clear what your position is and helps define the issues. As you pointed out, you are not the only person making these statements, which is why I did not assign them to you in the first place. At times, I do not know who is making them, but hear them repeated from conversations.


    Best Regards,

    Farmer Dan
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  10. TopTop #6
    Peacetown Jonathan's Avatar
    Investigative Reporter

    Thank you both for adding insight into the public debate

    I want to thank both Jim and Dan for adding such useful and well articulated information to this critical public debate. I see that my political contextualization and opinion belongs on its own thread, and I will delete my earlier post and post my own views on all this tomorrow.
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  12. TopTop #7
    farmerdan's Avatar
    farmerdan
     

    Re: Thank you both for adding insight into the public debate

    Jonathan,

    Thanks for removing your earlier post!
    I appreciate that Jim responded so that we can have further clarity in these important matters.

    Hopefully the dialogue will continue.

    Dan

    Quote Peacetown Jonathan wrote: View Post
    I want to thank both Jim and Dan for adding such useful and well articulated information to this critical public debate. I see that my political contextualization and opinion belongs on its own thread, and I will delete my earlier post and post my own views on all this tomorrow.
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  13. TopTop #8
    farmerdan's Avatar
    farmerdan
     

    Re: Thank you both for adding insight into the public debate

    Jim,

    Having just reread part of your post, I see that you added the unaudited 2014 numbers to the OSHPD data, something I did not comment on earlier. This is clearly a further distortion of the facts since the cost of closing the hospital cannot be considered operational costs in any real sense.

    One of the great tragedies is that it would have been many millions of dollars less costly to keep the hospital going instead of closing and reopening it. (Which is why we worked so hard to put together a plan in 7 days.)

    Best regards,

    Farmer Dan
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  14. TopTop #9
    rossmen
     

    Re: Palm Drive Truth or Friction

    together these two presentations of the dead hospital's financials create a far clearer picture than either one alone, thanks to you both. my question is about the estimated loss for this year, why so high? was it really so much more empty for the first few months(when it was open), that it spent 9 mill more than what came in vs 1.5 mill loss for the whole of 2013? or is it a combination of closing costs and continued expenses with no further income that explains the final financial bloodbath? perhaps a combination of one or both of these plus some accounting dissimilarities from dan's yearly figures explain the bleed-out?

    another question; are the former staff still owed money? and if so how much?
    Last edited by Bella Stolz; 10-27-2014 at 12:34 PM.
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  16. TopTop #10
    farmerdan's Avatar
    farmerdan
     

    Re: Palm Drive Truth or Friction

    Rossmen,

    Thanks for reading all the way through!
    I know this is a complex matter and anyone who works to understand it is gold in my book.

    There are basically two answers to your first question:

    a) Losses accelerated in fiscal 2014 (July 2013 - June 2014) as the hospital began to implode from lack of cash. However, it is not likely that the total losses prior to the announcement of closure would exceed $2 million so the remaining 6 million is likely attributable to after announcement. Once the announcement is made, however, patients and doctors head for the hills, business falls completely apart.

    b) There were huge extraordinary costs as a result of the decision to close (many millions of dollars.) For example, there have been over $1.5 million in costs from consultants and attorneys alone. Another example is $320,000 to store medical records.

    I cannot give you an accurate spread of these since there has not been a complete accounting of closure costs but I can say that the vast majority is closing costs, not operational costs. Even after the hospital was closed, it had to retain staff in many areas to wind down operations, including CEO, CFO, CNO, and other support staff. There were also big write offs for physician loans ($760,000 for one) and other items with no revenue coming in.

    The former staff are owed something over $1 million. This figure is still being adjusted but it is primarily due to employees who had Paid Time Off accrued, which was not paid when they were laid off. Also, under the Warn Act, the hospital was required to give 60 days notice of layoffs, but only gave 28 so employees were due a month's salaries if they did not take other jobs.

    It should be noted that there are still questions about how much of the PTO can be thrown into the bankruptcy and the Warn Act money should be owed outside of the bankruptcy.

    Hope this helps!

    Best Regards,

    Farmer Dan


    Quote rossmen wrote: View Post
    together these two presentations of the dead hospital's financials create a far clearer picture than either one alone, thanks to you both. my question is about the estimated loss for this year, why so high? was it really so much more empty for the first few months(when it was open), that it spent 9 mill more than what came in vs 1.5 mill loss for the whole of 2013? or is it a combination of closing costs and continued expenses with no further income that explains the final financial bloodbath? perhaps a combination of one or both of these plus some accounting dissimilarities from dan's yearly figures explain the bleed-out?

    another question; are the former staff still owed money? and if so how much?
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