Santa Paula Tiimes

10/22/03

SPMH, VC correspondence centers on financial disclosure, service fears

By Peggy Kelly

When Chief Assistant County Counsel Noel Klebaum notified Santa Paula Memorial Hospital last week that it was releasing correspondence regarding affiliation negotiations, the memo noted that two "redactions" - a fancy word for blacking out information - stemmed from "proprietary information of SPMH for which it claims trade secret protection."

The "Hospital on the Hill" is starting to slide down towards bankruptcy and although the non-profit community-owned facility has no trade secrets, its management firm, Quorum Health Services, certainly does.

The fact that the hospital remains loath to fully open its books - following the refusal to do so for the community it was hoping would donate $600,000 and for the Ad Hoc Committee appointed to find ways to save the hospital - is a troubling pattern revealed in the correspondence.

Even during negotiations with the County of Ventura, revealed in the series of letters between the negotiation parties released to the media under the Public Records Act requests, money, or actually where the money was going and who it is owed to, was a major sticking point.

The hospital has been negotiating with the county for about five months after announcing in December 2002 that it was close to shutting down after spending reserves and a downturn in users.

The county found another cause for alarm in SPMH operations and urged in an Oct. 10th letter that the hospital temporary close to allow time "resolve its financial obligations and finalize negotiations for affiliation, while minimizing the ever-increasing risks inherent in continuing to operate the hospital under the current circumstances."

During a September report to the City Council, Rodney Fernandez, a SPMH director, was asked about rumors that the hospital had been turning away patients. Fernandez confirmed the reports noting that ambulances had been turned away from the facility, which is seeing a shortage in both personnel and supplies.

The correspondence between SPMH attorney Michael McQueen and David Henninger, retained by the county for the negotiation, didn't start leaving a paper trail until early September, when McQueen presented a new term sheet.

McQueen wrote that rent for the facility, one of the only three built entirely with community donations in the state, would be fair market value, "in no event less than the SPMH's operational and debt servicing obligations plus a reasonable profit margin."

When it came to the SPMH staff pension plan, McQueen wrote that SPMH will "have the right to modify the existing plan for cost reduction and other purposes" and once the county took possession would be responsible for its management.