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home : opinions : opinions May 22, 2015


1/23/2013 6:01:00 PM
COLUMN: Get rid of the doctor's on-call and directorship pay
John Lemay-Humble


You have reached the 11th hour

It is time for the Board to start governing and quit playing favorites. I will give you a history of PVH (Palo Verde Hospital) from 2006 to date.

On Jan. 1, 2006, the PVH was turned back to the District. There were rumors that PVH would not survive without a Parcel Tax. That failed and PVH lived on.

Let me regress a little. I went to OSPD (Office of Statewide Health Planning and Development) website and download PVH's reported financial data. It proved that PVH was capable of generating approximately $1 million net dollars a year (that was the average for the prior 10 years). Note, they did not pay on-call or directorships during those 10 years but they did have administration pay.

Getting back to 2006, we survived and actually were doing well. Then, unbeknownst to the general public, the board in a closed session decided to retroactively pay the doctors some of that windfall by giving them on-call pay and directorships totaling almost 1.3 million, which is less then what they are being paid today.

That did not last as by mid-2008 we were in turmoil and discussing bankruptcy. All on-call pay and directorships were eliminated and a new Board came on. By mid-2009 we were doing well and inherited $2-plus million from a Medicare audit. That $2-plus million was because of the turmoil of 2007-2008 and the closure of surgery and OB.

By mid-2009 the new Board then felt they were flush with money and again gave over $2 million a year in on-call and directorships, this time even more then was given in 2006.

Remember now earlier in the letter I told you that the prior 10 year average of net income for PVH was $1 million and PVH did not pay on-call or directorships during those prior 10 years. So history tells us we will again fail because we are paying out in on-call and directorships more money then history says we can make!

Remember in 2008 there was an uproar because we were paying AHM about $1 million to manage PVH and today we are paying basically the same dollars for administration. Granted, I too feel we are paying a little more then what would be normal for a viable and normal functioning small hospital, but we are not normal nor viable!

We seem unable to control revenues so the only alternative is expenses. Believe it or not I once worked for a hospital that was on the brink of failure. We decided to cut staff pay 10 percent and administration 15 percent. This was with the caveat that if we again became viable (we did), we would repay those monies first to staff then to administration. Of course at that time we had never heard of on-call or directorship pay. Well we came back with a vengeance and all monies were repaid and with a bonus.

What if we change the structure of on-call pay to be more in line with what other small hospitals pay, which is zero, or better yet, at least become reasonable.

The whole idea of on-call pay is not to support a physician (that is illegal in California) but make it so it pays a reasonable stipend for staying in the area which 90 percent of the time they are here anyway because they have to see their patients and they live here. Say for surgery and OB, $500 per day, and on the occasion they are called in for a patient that is indigent (someone who cannot pay) they get an extra $1,000 but limit it to only one extra $1,000 per day. If they get called in for someone with insurance, then no extra pay as they will be paid by the insurance company. Reduce the directorships except the one that we are required to have to stay in compliance with our license.

Prior 10 year average net income for PVH (prior to 2006) was $1 million and no on-call or directorships were paid out in those 10 years.

Mid 2006 - AHM and Board in closed session gave Doctors On-Call and Directorships totaling over 1 million dollars (more that average prior 10 year net income).

2008 were on the brink of bankruptcy and eliminated the on-call and directorships. Mid 2009 we are flush again and receive from Medicare $2.4 million from an audit.

Latter 2009 the Board feels generous again and reinstates on-call and directorships but at greater amounts then before for just over $2 million (That is twice our historical average net income).

By 2012 we are again showing the strain of not making enough money to cover our bills and to add to that the state has changed the way prisons pay and are sending prisoners to other facilities (our loss).

2013 we are in court again (this is not the first time) revenues are down, discussion about closing by mid summer if revenues are not back up.

Well with Obamacare, Medicare changes, prison changes and reduced revenue, we cannot continue to pay the high on-call daily pay and give every doctor that has privileges $3000 a month for a directorship. We need to reduce that now, get the hospital stabilized and off life support. Then when we are stable, address administration.

These are just two ideas to help stabilize the free fall PVH is experiencing. I know it is not likable to everyone but neither is closing PVH. Our own government is struggling with the deficit and high expenditures. In the end I bet we reduce the military expenditures whether we feel that is right or wrong because they have the greatest dollars to pull from. Board members and staff had better start making decisions for the benefit of the hospital and not those that benefit your friends or yourself!

Anyone who actually read all my letters to the editor and opinion columns know that I wrote not only about the doctors but the Board and the administration. I played to no favorites. I always attempted writing for the hospital and its employees only.

My last word on this subject in this letter is, stop with the digs, they get you nowhere. Just present ideas that will keep the hospital viable even if it does not benefit you in the short term or even at all!

If giving exclusive contracts will provide better services at a reduced cost, then do it. If not, then don't. Look at everything as a new idea and make the decision that will save PVH.

If you do not, I am sure you will be looking at the demise of Palo Verde Hospital!




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Reader Comments

Posted: Thursday, January 24, 2013
Article comment by: @Phantom Nose

What about Sam Burton? You left him out. He just rubber stamps it all, just like the "twins". He is culpable, regardless of his occupation.

Posted: Thursday, January 24, 2013
Article comment by: @ john lemay

John why don't you look into why the prison pulled out of the hospital and what was done under the last board to bring that business back. Did you know that as of only a couple of months ago we had a board and an administration (note that it was right before an election with sitting board members up for re-election) that the hospital was in good financial shape. The last board had no handle on expenses whatsoever. The new board is already looking into changing how the finances are being handled at the hospital and changing the system to where all expenses get itemized and warranted in order to give more clarity. (deleted) The new board is also looking to start commitees that will include board members, doctors, staff and community members to give more of a voice to all factions that are involved. (deleted) Everyone needs to give these people a chance whether they like them or not.

Site Administrator's note: A portion of this comment has been removed because it violated our Terms of use Agreement.

Posted: Thursday, January 24, 2013
Article comment by: just me

The three are not going to request the mec to give up 50cents of thier pay.That would be sinful.And of course put them on his blank list.It's all about S.Not true patient concern.

Posted: Thursday, January 24, 2013
Article comment by: Phantom Nose

A very good analysis. But, it misses the point. The twins are into payback and anger. That has blinded them so they cannot see what they and the MEC are doing to our community. It is very sad.


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