Adventist Health slated to manage, lease TRMC

The Tulare Local Healthcare District’s Board of Directors at a Wednesday, June 27 meeting. Tony Maldonado/Valley Voice

Tulare Regional Medical Center’s (TRMC) future could be in the hands of Adventist Health, after the Tulare Local Healthcare District’s Board of Directors voted to enter into negotiations with the the nonprofit.

The board’s 4-1 decision in favor of Adventist came down to what it felt were more favorable terms — they say they’re able to reopen the hospital by October. Community Medical Centers (CMC) however, would require an extension of the hospital’s suspension along with the passage of a tower construction bond measure and a long-term lease measure before reopening services in 2019.

Both entities required a 25-year lease of the hospital’s property, and both had previously submitted management bids during the same process that ultimately saw Healthcare Conglomerate Associates (HCCA) the hospital’s former management company, take over care at Tulare Regional.

Adventist and Community were chosen by the district’s ad-hoc committee to present to the board. Dignity Health and the Kaweah Delta Heathcare District were also in the running to potentially manage TRMC, but were not chosen to present.

Senovia Gutierrez was the lone dissenting vote. She felt that Community could provide higher quality services, and more of them.

“CMC is offering right now, the possibility to have a hospital with all those services. Why not take a chance? I know that time is important, but it’s better to wait to have a good basis to open the hospital again,” she said. “CMC is offering us the opportunity to have something different. And I really would like to go to CMC because it’s the best for the community.”

Kevin Northcraft, the president of the district’s board, said that Adventist was just what the district needed — a partner ready to work to open as soon as possible and willing to work with the district.

“God works in mysterious ways. Thank God we got the chance to consider Adventist Health,” Kevin Northcraft, the president of the district’s board said, “and that they responded in such a compassionate, flexible, and confident way. Thank God they want us, too.”

 

Adventist’s Bid

Robert Beehler, Adventist Health’s Market Development, Mergers and Acquisitions Executive speaks to the Tulare Local Healthcare District’s Board of Directors. Tony Maldonado/Valley Voice

Robert Beehler, Adventist’s Market Development, Mergers & Acquisitions Executive, presented the nonprofit’s vision of a partnership — including a long-term lease — to the board.

He said that his organization’s timeline was aggressive, but their past experience in other markets shows their experience.

“We understand that it’s a very aggressive timeline, and there’s some risk we’re building into it — risk that we’re taking, by taking an aggressive timeline like that — but the district asked for certain things to happen, including opening the hospital as quickly as possible, and we’ve taken every step we can to accomplish that,” he said. “We’ve done it in other markets, we’ve done it in other transactions. It takes a little bit of faith on our team’s perspective, but we’re committed to do everything we can to get there, and putting our money up to do so.”

The organization’s California footprint spans as far north as Willits and as far south as San Diego; in Central California, Adventist operates hospitals in Bakersfield, Tehachapi, Hanford, Selma, Reedley, Sonoma and Lodi.

Adventist intends to open up the hospital before its suspended license expires, he said, and potentially as soon as September. They would still attempt to obtain an extension as a cautionary move.

“Being cautious, we would probably want to be sure that if something goes wrong, there’s an ability to move a little bit beyond that,” Beehler said.

They would also be willing to commit to Tulare Regional remaining an acute care hospital.

The company would also provide a $10m line of credit — potentially more or less, depending on what amount was needed and how the district budgeted the funds — to fund the reopening of the hospital. The amount would be treated as an advance of rent under a long-term lease arrangement.

The district would still be responsible for ensuring the completion of the tower — or that the hospital’s buildings are otherwise seismic compliant. According to the presentation, Adventist would be able to provide support for construction oversight and design.

Adventist would prefer to see a bond for the tower, Beehler said, but it was not a hard requirement.

“I think the intention would be to get the organization open and to rebuild the trust with the community — if the community had enough confidence in the work we’re doing, we would like to see the district fund the tower with a bond,” Beehler said. “We would hold the option open of seeking other financing if it absolutely came to that.”

They estimate a $40-45m cost to complete the tower based on discussions with the inspector of record. The hospital’s former management company, Healthcare Conglomerate Associates, had previously estimated a $57m cost to finish the tower, before additional fees.

“He’s there for every board, every piece of it — the number he threw out was $40-45 million to complete it,” Beehler said. That number purely came from the inspector, he said later.

“We haven’t spent any significant amount of time in that building. Our total engagement in this process since we got the RFP — talking about super-fast timelines — has been about a month and a half,” he said. “We have not dove into the tower, we don’t know what it’s gonna cost, somebody threw out a number to us — someone asked what it was, and I repeated what the number we heard was.”

Under Adventist’s administration, the hospital would reopen with the basic services necessary, as well as an emergency department, according to Andrea Kofl, Adventist’s President of the Central Valley Network. Obstetrics could take up to a year to reopen, but could reopen sooner as well.

“We want to make sure that we have everything there that we need — the doctors and nurses there to provide safe care,” she told the board.

Kofl told the Voice that Adventist’s staff, already rooted in the surrounding areas, would look to recruit physicians to the hospital and recruit back physicians who may have been jilted under HCCA’s administration.

Adventist had been watching the situation in Tulare “from afar” after their experience in bidding four years ago, and was driven to re-bid the community after noticing the void in services.

Their experience in the Central Valley and Tulare’s populations being in common with their other areas — including agriculture and a large Hispanic population — lead them to believe that they can provide service in Tulare just as well as they do at their other Central Valley hospitals.

“We’re passionate about care and the delivery of care, and doing it in a Christ-centered way,” she said.

 

Community’s Bid

In foreground, Aldo De La Torre, with Community Medical Centers. In background, Scott Wells, with Sante Health. Tony Maldonado/Valley Voice

Aldo De La Torre, Community’s Senior VP for Network Development and Insurance Services, presented for Community Medical Centers. Scott Wells, the CEO for Santé Health, accompanied him.

Community and Sante have been in the running to work with Tulare since last year; in October 2017, Tulare officials submitted plans to transition the hospital to Community’s management to the United States Bankruptcy Court and to the California Department of Public Health.

The organization operates Central California’s largest healthcare system, De La Torre told the board, with a combined 1,117 beds at Community Regional Medical Center, Clovis Community Medical Center, Fresno Heart & Surgical Center, Community Behavioral Health Center, and Community Subacute & Transitional Care.

“We serve the needs of many in the surrounding counties. We are the only Level One trauma center from Los Angeles to Sacramento, in between,” De La Torre said. “We provide more ER care than any hospital in the state — we go back and forth with a hospital down in Los Angeles called County/USC.”

Before continuing to the rest of the presentation — including Community’s terms and a timeline — De La Torre provided a disclaimer to the public regarding his organization’s thoughts.

“It’s not that we don’t desire to open your hospital — if we could, we’d do it tomorrow. We just think there are a lot of headwinds and barriers, and we think that rushing this may cause more harm than good. What we try to do is take a long term look at this,” he said.

Community’s officials had toured the facilities with a team of 30 people over two days, he said, providing some insight into what funding would be required to restore the hospital to a place where it would pass an inspection. Their view differed from others, and the timeline provided slated the hospital’s opening for the 3rd Quarter of 2019.

Officials were confident that an extension had a good chance of being granted, based on discussions with state regulators.

“We don’t think that the inspection agencies will reopen the hospital or permit us to unless we make repairs and accomodations. We’ve allowed money for that, and that goes into our analysis. The current cash flow statements suggest that there’s $800k available for that purpose. We think it [needs] significantly more than that,” he said.

Community’s bid promised up to 24-months of no-cost C-Suite management assistance and a $6m line of credit secured by the Evolutions building and adjacent land, while Sante would work with local Federally Qualified Health Centers to reopen at least one of the hospital’s clinics by October 29, 2018. TRMC would remain an acute care hospital as well.

Even if voters approved Community’s lease of the hospital, if they also rejected a bond measure to reopen the tower, Community would likely exit any lease or management agreement.

Based on Community’s analysis, it would take $75-100m to complete the tower, though if chosen, they would have commissioned a deeper analysis. That would include customizations for the company’s way of working in the building.

“Some of the cost estimates included in Community’s number include redesign of the existing layout of the tower, because it doesn’t work for us. We fundamentally need to build a tower in a manner that will maximize the use of automization and minimize the use of labor,” Wells said. “That’s how we run the hospitals in Fresno. Under the old deal with the old management team, they didn’t really have an economic desire to reduce labor — their contract stipulated that they would get more money if they threw people at it.”

“If you wait, and Community comes in, in Tulare, you’re going to have a hospital like the four in Fresno, that I know you’ll love, you’ll be awesome, you’ll be proud of them,” Wells said. “But in order to do that, you have to accomplish certain things.”

Community officials said they would reopen with all of the hospital’s services it previously offered. De La Torre told the board that he’d like to expand services from there.

“This is a secondary market for us today. We would like to make it more of a primary market, and extend the resources we have to the residents of Tulare,” he said. “Many of you access our care today, and we find that if we can bring that locally, that would be a greater value to you.”

 

A Fraying Partnership

Kevin Northcraft, President of the Tulare Local Healthcare District’s Board of Directors. Tony Maldonado/Valley Voice

Before the final vote, Kevin Northcraft said that he and Mike Jamaica had been in talks with Community and Sante as far back as a year and a half ago. They had committed to working exclusively with the hospital group, he said, and Community had previously offered the district loans while the hospital was closed.

Before the hospital had closed, Tulare officials submitted plans to transition the hospital to Community’s management to the United States Bankruptcy Court. In January, Northcraft said he had offered to work with them on a long-term lease if the organization was able to get the hospital up and running as soon as possible.

Community’s “as soon as possible” didn’t match up with the board’s definition, though.

“I really like the Community staff, I like the facilities, I like the reputation that they have, they’re great people — and for over a year, I thought that this is our future, this is where we’re going,” he said.

The hospital group’s statement that an immediate opening was unlikely — an opinion shared by the Kaweah Delta Healthcare District — soured the relationship with them. Their rationale was solidified in a June 18 letter signed by Tim Joslin, President/CEO of Community.

“…CMC has determined that significant capital is required to replace aging equipment, finish construction projects, address seismic compliance, and complete critical safety and infection-control repairs,” Joslin wrote.

A delayed reopening — and the requirement to pass a bond before even entering into an agreement — was unacceptable to Northcraft.

“Given that history, in my mind, that proposal is just unworkable and infeasible for us to proceed,” Northcraft said.

Tulare would be a secondary hospital under the stewardship of Community or Kaweah because they would focus on their main areas, he said.

“As much as I’ve enjoyed working with Community, as much as I’ve committed for over a year exclusively to Community, I’m here to tell you that that was not a wise choice,” he said.

Xavier Avila, a board member, echoed Northcraft’s view to the Voice.

“The big factor is what they said is — they want a bond and a lease in the same vote, in the second quarter; so, we’re going to go from now, ‘til February-March. We don’t know. No certainty,” he said. “That’s not fair to this town, and it’s not fair to these people. What happens if it doesn’t pass? What do we do?”

Joslin’s letter said that Community would continue to be interested in a long-term lease or acquisition of the hospital if Tulare’s other opportunities fell through.

Avila said he’d support entering into an agreement with Community if things fell apart with Adventist, though the board would likely also reach out to Dignity Health.

“Without a doubt,” he said.

Watch the public comment section of the meeting below.

In Depth: Tulare Regional Medical Center

36 thoughts on “Adventist Health slated to manage, lease TRMC

  1. .. you have a well known quality hospital CRMC telling you what we all know is a fact that the equipment , safety and infection control is in need of repair and it will take significant capital…. which shows they have quality standards but you won’t entertain them because you want to reopen ASAP? Well I for one am not interested in having what we had before and neither should anyone in Tulare . Did it ever occur to you that high level of care patients are transferred to CRMC from all the local hospitals and you have a chance to have them here in our backyard and you don’t even look at them because you just want it running before oct when 2019 is months away but your still going to ask for an extension just in case? Something doesn’t smell right to me . Nothing against AH but CMC is A whole different ballgame.

  2. I wasn’t happy with the timeline but CMC lost me with saying we had to pass a bond and they would back out if we didn’t. We are still paying a previous bond and have no idea what happened with the money. To expect 2/3 of the town would vote so soon for another bond is crazy. Kevin, Mike and Senovia said they would only ask for a bond if it was the last resort when they were running for hospital board. Senovia voted last night for the hospital that made it clear we had to have a bond when their is another great option available. I was disappointed in her but happy to see we will have a chance to have our hospital back with a great partner like Adventist

    • The community may get behind another bond only if the audit reports were made public as to who and how 84M was misappropriated and then charges brought against those who were involved.

  3. Both organizations spoke well of one another, bosting great operations, staff and the ability to manage our hospital. Adventist Health is not a “Mickey Mouse” operation by far. They are a successful, reputable, ethical, business savy, honest, and beyond capable hospital that is willing to bring much needed healthcare to our community now. We have been pushing our luck by not having a hospital. Thank heaven we have not had industrial park major catastrophes, or extreme highway accidents on Hwy. 99. Hundreds, possibly thousands, are going without hospital care because they simply cannot go to KDHCD or elsewhere. We are in the service of healing those in need. AH is going to help us do that. While CRMC would also do a great job – we cannot wait another day without our hospital open. Its about the people we serve, who deserve healthcare now in their own city. AH is going to do a tremendous job and I for one as a citizen, am excited to see all the new specialties that will be here in due course. Keep the faith people – we’re almost open. TULARE STRONG!

  4. Fingers crossed! I hope a reasonable lease can be obtained (not like the one with HCCA). I have heard nothing but high praise for Adventist Health (as well as CRMC) so that is something to hang our hats on. I am cautiously hopeful.

    • Yes Barbara, I believe everyone will be overly cautious when negotiating the lease, but I believe AH will be fair and honest, and ALL WILL BE TRANSPARENT. Refreshing….

  5. The board meeting was very long, but worth it. The board had a very hard decision to make after both presentations. I truly think they made the correct choice. The hospital has now been closed for 8 months. Long enough. CRMC would have the hospital stayed closed until July of next year. Too much of a risk for the community.

  6. While CMC is the best one could hope for, Adventist has a strong, proven track record and a genuine interest in smaller community hospitals. Neither of these places is remotely like the lying, cheating criminals of HCCA. Kaweah Delta is lucky CMC didn’t move in. It works severely undercut their business in the Valley.

  7. Would TRMC be a stand-alone Adventist site or will it get incorporated into the Central Valley Network (Hanford, Selma, Reedley)?

  8. I bet KDDH is glad CMC is not coming and glad is an understatement! If your going to ask for an extension…… just in case it falls through, and if it does you will be looking at the CMC timeline anyway. I’m with Senovia on this one, she is the only one to see the big picture. And why the big rush on such a big issue? I would also like to know who was on the ad hoc committee,were there any medical members to give input outside the staff that is there now? A hospital is only as good as it’s Doctors and staff. I feel having Sante and CMC would have elevated the care to this community to a level it has never had in the last few years, again I’m sure AH is a fine hospital with good intentions however even they identify themselves as using more of a rural hospital model, I was hoping for more than that. I wish the board would have looked more into the future of possibly having a stand alone CMC one day. The citizens of Tulare will be asked at some point to approve a bond anyway. Yes I understand the community feeling an urgency to have “something “ here now and employees wanting to come back to work or keep their jobs if they are working there now , however sometimes for the greater good of the community tough choices need to be made and I certainly hope that was not one the considerations this board used in making their decision. I’m cautiously optimistic and do wish AH much success in this endeavor.

  9. Please just google Andrea Kofl and DOL issues and you’ll find out how a president of an organization has done in the past to embezzle money of employees. Good luck tulare

  10. This is the organization which can do mediocre medicine at the best. Too bad tulare board compromised for a bad option as Adventist is there to stay. Even in hanford the public is scared to go to the hospital as they are not sure if they’ll come out alive. It was the chance tulare could have taken the leap and made the right decision.

  11. Adventist is faith based. yuk yuk. Their modus operandi is to squeeze money from their many rural clinics with their federal dollars, thats where the money, um, faith is.

    Oh btw, quality is not an issue. the quality at hanford hospital is horrid, they have been listed as the worst in california on several occasions. Better to have bad medicine than no medicine ? I dont think so. Have faith, Tulare !

  12. I don’t have a problem with AH being a faith based hospital, what I have a problem with is the quality and expertise of the Doctors and services they offer. Is AH going to recruit from their Pool of doctors, reading the reviews of AH I certainly hope not
    , but I feel that is what is going to happen. Its very difficult to recruit to these rural hospitals, however if you were aligned with a large city hospital that has its own pool of Doctors (Sante) I guarantee the quality would improve and competitivenes is always a good thing in regards to healthcare. Remember good quality health care is driven by your physician if they demand the ones implementing their orders be of a certain standard then the bar is raised for every facet of your care. However here we sit not knowing what was agreed to and why, the only thing we do know is that according to the board time was the essence, the truth is we are not a community that has absolutely no health care to draw from ,yes you might have to wait in the ER but many of you complain about that with HCCA anyway. This area has paramedics all very capable of stabilizing a patient in route to the hospital. In a large city it’s not unusual to be 20-30 min from the nearest hospital accounting for traffic. The one issue that should have been foremost with this board is QUALITY! Not the opinion of employees of AH who state it’s a great place to work for, (which I have heard also and believe) but in regards to how that translates into quality of care is another story. Hcca was left in deplorable condition as noted by CMC and to bring it up to their quality standard it was going to take money and time, which the board was not willing to wait for. So I ask you in 2 months ( and it ain’t going to happen folks) how is AH going to magically whip that place into shape for the doors to open when CMC AND dignity clearly stated in not so many words, it’s a mess! I hope they can do it , if not you can expect more of the same. So so sad a great opportunity for this community was cast aside.

    • I don’t know about the whole company but Sante caused more problems than solutions with their involvement in the Tulare hospital. We are better off with Adventist

      • According to who, Kevin Northcraft’s ego. He failed to recognize the importance of physicians and the most valuable role Sante provides to CMC’s success. Physicians drive the volume, always have and they always will. Are we now stuck with getting Kumar back.

  13. I agree Freddy. Initially I used to feel bad for Tulare for all the years of bad luck and pirates who ruled the land but I am now more convinced that it’s their own doing that is catching up with them. I dunno what else will wake u up Tulare!

  14. This would have been an ideal situation to initiate competition. Dignity would have been perfect or CRMC as that would have created a wedge between KDH and Adventist kingdom. That’s what we need in the area. Competition. No one should have ultimate control.

  15. Both CRMC and Adventist will require a bond to complete the construction. At least CRMC was honest up front. After this Kumar/Bensleasy mess that we will be paying on that Binds forever. I think it will not ever pass for another one. What will we do then? Not getting answers other than “Will cross that bridge when we come to ut”. #WORRIEDINTULARE

  16. Linda is right as usual. Adventist only picks up road kill. They want that license that comes with Hillman clinic. Freddy is right – The govt give them a fat check for each walk in they get. Most likely they would turn the hospital in to a clinic as they proposed 4 years ago. No money to be made running an ER or ICU.

  17. If Adventist is smart they should run it like a hospital as TRMC has huge potential due to it’s ideal location on 99 compared to the rest 3 which are in a middle of nowhere. But knowning them, they are just coming in for tapping on medical of Tulare county. They by no means will improve the quality of care. I hope and wish our board and people will change their mind and give CRMC or dignity a chance.

  18. “If you wait,and community comes in,in Tulare,you’re going to have a hospital like the four in Fresno,that I know you’ll love,you’ll be awesome,you’ll be proud of them,” Wells said. “ but In order to do that, you have to accomplish certain things.” Well that sounds pretty honest and upfront and Im pretty sure we all want a hospital to proud of, but instead we are getting AH with a 2.5 rating, It would be easier to pass a bond with the citizens of Tulare if the Hospital taking over was of CMC’s stature, but I’m sure Tulare will be ok passing a bond for mediocre care. Maybe Tulare has been so beaten down lately that it thinks that’s all it deserves.

  19. The horrible tongue lashing Kevin Northcraft gave to CMC at the end was an embarrassment. He failed to recognize the opportunity it would have been to get them in Tulare. It would have raised the quality bar of all the hospitals in the area by having them at TRMC. CMC’s mistake in the presentation was being brutally honest with the board and expecting a bond right off the bat. Would be much easier to pass being open under their leadership. Now the board is going to need to pass it with a glorified clinic system that is Adventist – good luck with that.

    Egos have gotten pretty large on the board and they seem to have bought into their own belief system, such as loss of 500 jobs or people dying because TRMC is closed. Open your eyes board, 500 people should have never been employed with the previous hospital volume. Hopefully most of them aren’t back – HCCA was not able to get the cream of the crop staff.

    It looks like the board listened to the handful of employees that believe they can get the hospital open along with the old guy from Wipfli. The same guy that gave false information to the board on the robotic machine they were going to sell for dirt cheap. The same guy that for months has been saying that the hospital couldn’t get an October extension on the license, now they suddenly can and Adventist says they should apply. The same old guy that has worked with Adventist in the past and was pushing for them from one of his first board meetings from what I recall watching.

    $10 million is a drop in the bucket for what is going to be needed. Shoot probably half will go to pay attorneys and Wipfli.

    Tulare is destined to be second rate, the board had an opportunity at excellence and they blatantly snubbed that opportunity.

  20. Leapfrog, who compares the quality of hospitals and to whom this community gave so much attention to when TRMC was given an F grade, gave CRMC a “C” in safety and Adventist a “B” in safety on its most recent survey. Please explain to me how you can say that CRMC is such a quality organization.

  21. I’d rather take my chance with CRMC which TRMC,AH , Porterville and KDDH transfer their Neuro and high level critical care patients to. Let’s face it NO hospital in the valley is a UCSF or Cedar Sinai, however for this area their the best. Thank you Senovia for at least trying to knock some sense into the board. And I agree with reality check Tulare is destined to be second rate until we start voting people into positions that want more for this community than crumbs and that goes for the city counsel too! And by the way, in the last seven months what exactly was accomplished by Wipfli? I would sure like to know.

  22. Adventist got in mostly as the present “non working medical staff” became their voices to pacify the board to secure their positions. I hope they or their loved one gets admitted in Adventist hospital and face what the rest of us will face. What goes around, comes around.

  23. Do you know that Adventist health is the rock bottom hospital in California. They charge the highest that any hospital charges with very poor staff. All they care is money , and soon people from Tulare would realize that they have been cheated in a big way , way more than the prior group.The best option to have a quality hospital running this place where people in Tulare like me deserve better healthcare. The reputation of Adventist is extremely poor where they have hired lot of poorly educated people who run the hospital as committee chiefs and harass those who really work hard for the people and care for their patients. I feel this is worst step taken by the board which is notoriously known to take all bad steps which have harmed the interests of people of Tulare.

  24. I would die in a gutter than to take treatment from this highly competent medical care from most Mediocre physicians in California. Does anybody in board looked that they Adventist is worst hospital in California and it consistently did so. All I are is to have enough money so that they can fly me by helicopter to some good hospital in San Jose , Los Angeles , PALO alto or San Francisco. I do not want to die like a guinea pig and neither I am an experimental animal.

  25. Loser mentality nets loser results. The same group would be on here complaining they can’t go a year until CMC comes in and won’t find another bond.
    Losers can’t be choosers.

  26. Another bond is on the way people!They cannot even figure out where the money went to with the last bond. This is all too fishy. Somebody is the true driver of all of this chaos to close the hospital and get us to be so desperate to reopen the hospital with an unfavorable management company and now Adventist. I do not trust these board members. It went from bad to worse.

  27. I feel the board as usual bungled and made terrible choice of selecting Adventist health. I strongly feel it is too dangerous to continue this board and immediately start the proceeding to call back this board. It is just too dangerous to let them continue a single day as they keep repeating the mistakes one after other and follow wrong with terrible decision. Why can’t they contact stanford to start their setelite facility to have quality care.

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