The Facts Behind the HCCA/Tulare Regional Medical Center Partnership

A lot has been written in this publication lately about Tulare Regional Medical Center, and unfortunately much of it isn’t true. We appreciate the opportunity to relate the facts about the hospital and it is our hope this publication will start to verify facts before publishing stories filled with mistakes, unattributed opinion and rumors.

The verifiable facts

Here are the facts – all verifiable by public records. At the end of 2013, we almost lost Tulare Regional Medical Center. That would have been a devastating blow to the community, causing more than 500 people to lose their jobs and forcing tens of thousands of people to drive to outside cities for emergency medical services. It would have caused irrecoverable economic devastation to Tulare.

The hospital was on the verge of bankruptcy, losing more than $1 million per month, with less than 30 days of cash in the bank, a construction project in complete disarray, and no plan to turn things around.

The Board of the Tulare Local Health Care District was tasked with finding a solution.

After an exhaustive search that lasted months, and its recognition that none of the other interested parties could do the job, the Board took a step that saved our hospital: It entered into an agreement with HealthCare Conglomerate Associates to manage the hospital. When HCCA stepped up and presented a plan that allowed the hospital and its assets to remain publicly owned yet have its operations run like a private business, the Board said it had finally found the right partner.

This unique public-private partnership has infused Tulare Regional Medical Center with fiscal responsibility and strong leadership, while leaving full ownership of its assets in public hands. Bottom line: HCCA provided the best – and frankly the only – opportunity to turn the hospital around and set it on a path to a sustainable future.

Rather than the District filing bankruptcy and laying off hundreds of people, HCCA re-hired the entire staff and gave them pay raises. Management empowered the staff to make key decisions and these improved patient care, and the hospital’s overall performance.

Tulare Regional Medical
Center’s Dramatic Turnaround

Tulare Regional Medical Center has now completed 24 consecutive months of profit and had an annual return last year better than in the past twelve – all confirmed by not one, but two financial audits and an upgrade by the national firm Fitch Ratings. Coming on the heels of three straight years of financial losses, and the closures of other hospitals in California, the turnaround here in Tulare has been nothing short of remarkable. In fact, it has been recognized nationally and HCCA leadership has been invited to national hospital conferences to discuss this incredible success story.

Beside the financial turnaround and the saving of hundreds of jobs, there have been many other accomplishments. In March 2015, HCCA re-opened Lindsay Medical Office, providing that community with access to much-needed, close to home, medical services. HCCA also opened the West Street Medical Office and launched a permanent school-based community medical office in Earlimart, the first of its kind in Tulare County.

Led by Chairman Dr. Benzeevi, HCCA created an environment at the hospital that empowered team members to make decisions to improve the hospital and apply their full potential.

There were other changes that made a difference. HCCA streamlined the hospital’s management structure, renegotiated vendor contracts and set Tulare Regional Medical Center on a path to success.

The road has not been easy and some recent changes made to improve the hospital’s performance and the quality of patient care led to resentment – and caused some negative news coverage.

Doctors’ Leadership Reform

In January, the Board voted to end its affiliation with its prior medical staff organization and affiliated with a new medical staff.

The same 130 doctors who served the hospital before retained their exact same clinical privileges to practice at TRMC. The only significant difference is that there is a new group of doctors leading our team of dedicated physicians.

The old group of supervising doctors had not been acting in the best interests of the hospital and community for years. They had taken many steps that hindered the hospital’s progress, including filing a frivolous lawsuit against the Board’s chairwoman – a lawsuit that was quickly thrown out of court. A judge ordered them to pay her legal bills.

When the board chose a new medical staff leadership group, the old leaders did what they do best, create disruption and distraction, and file yet another lawsuit. They asked the court to immediately return them to power. However, here again, Tulare County Superior Court rejected their request, stating in a well-reasoned opinion that, based on the evidence, it was unlikely they would prevail at trial.

In recent weeks, this newspaper has published a few articles that sought to discredit the progress that we’ve seen at TRMC. These articles, especially those authored by David Adalian, were tainted by sloppy mistakes, factual errors and bias, rendering them effectively meaningless.

One of these articles erroneously described the medical staff change this way: “Tulare Hospital Board discharges entire medical staff.” This is inaccurate in that not a single doctor was discharged in the change. All doctors retained the same rights they always had to practice at the hospital.

Setting the Record Straight

The most recent of these articles, titled “Deal Gives HCCA Exclusive Right To Buy Medical Center,” contained so many errors that it leads to the conclusion that the author is either inept or deliberately biased. For reasons that are frankly unclear to us, that author has chosen not to follow standards of fairness and ethical journalism that other newspapers follow.

This article, erroneously stated that the contract between the District and HCCA was “largely kept concealed.” In fact, the contract and all associated documents were available for the public to examine before the Board voted on it, was described in detail by the Board’s attorney during an open public meeting, and was on the hospital’s (TRMC) public website for no less than 9 months afterward. Even now, all these documents are available upon request to any member of the public.

That same article wrongly said the contract gave HCCA an exclusive right to buy the hospital at a future date with “no restrictions.” In fact, the contract states that the right cannot be exercised without prior approval by the District’s voters – the public, who own the hospital. The article states that voter approval is not required. That’s a false statement of the law.

Even if the voters approve the sale, the hospital must be sold for its full market value at that time (which includes all value added by any construction project.) As owners of the hospital, the public always retains the right to sell its assets. Should the public ever vote to sell the hospital (at fair market value at the time of the sale), HCCA retains the right of first refusal.

The article contained another error, falsely stating that HCCA charges the District a 30% surcharge for employee salaries and is allowed to “bank” the “over-payment.” In reality, HCCA uses that amount to cover employee benefits, including health insurance.

Here is the answer that HCCA provided to Mr. Adalian, which he to this day has failed to include in the online version of the story: “The 30% is being used to pay employee benefits, including health insurance, and is not being banked to purchase TLHCD assets. … This is an excellent deal for the district as typically companies charge a 30% surcharge for leased employees above and beyond the salary and benefits.”

The article left the impression that HCCA has set itself up to steal the hospital. Nothing could be further from the truth.

To be clear, HCCA has zero intention to buy the hospital. And if it ever did, the deal would have to be approved by the registered voters in the district and sold at its full market value at that time.

The false statements in these articles are not harmless – they cause real damage. They do not “inform” the public, but rather they misinform the public. They do absolutely nothing to enhance our community and, in fact, harm our ability to ensure sustainable emergency care to our community. We strongly urge the paper’s publishers to carefully consider their responsibility to the public and to our community to publish fair and accurate stories. A good start would be including both sides of the story, and making a basic effort to verify allegations before reporting them as fact.

Kathleen Johnson is Vice President of Marketing for HCCA/Tulare Regional Medical Center.

The Valley Voice in no fashion agrees with the above—in any assertion—but rather seeks to clarify a thorny situation. The Voice and its staff bear no ill will either toward TRMC or HCCA. It is the opinion of the paper that, in allowing this response, the purpose is to allow clarity. The Voice can only report on facts presented to its staff, whether someone reaches out to us, or we reach out to others. Being that HCCA representatives have not returned several calls, we have not always been able to present their side in our reporting. It is unfortunate that they have lowered themselves to such an uncivil tone.