HomeMy WebLinkAboutMINUTES - 12061994 - 2.4 2 .4
THE BOARD OR SUPERVISORS OF
CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on _December 6, 1994 by the following vote:
AYES: Supervisors Bishop, Torlakson, Powers
NOES: None
ABSENT: Supervisors Smith, DeSaulnier
ABSTAIN: None
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SUBJECT: Report of the Ad Hoc Committee on
Consultant Selection
The Board discussed the status report of the Ad Hoc
Committee on the selection of consultants and other actions
relating to the Merrithew Memorial Hospital Replacement Project.
Board members present agreed to continue this matter to December
13 , 1994, when the full complement of the Board would be present.
Therefore, IT IS BY THE BOARD ORDERED that considera-
tion of this report with the recommendations contained therein is
CONTINUED to December 13, 1994, with direction to staff to
address the concerns raised in the discussion this day.
I hereby certify that this is a true and correct copy of
an action taken and entered on the minutes of the
Boarf'of Supervi ors on the date shown,.`
ATTESTED: ',ZC' • l . /9 9 7�—
PHIL BATCHELOR,Clerk of the Board
of Supervisors and County Administrator
cc: Health Services Directorey
4�_"' Deputy
County Administrator
ti
Y
TO: BOARD OF SUPERVISORS Contra
Costa osta•�l -�
Ad-Hoc Committee on Consultant Selection
(Supervisor Tom Torlakson and Supervisor Mark DeSaulnier �±+r County
DATE: r�`�1 icitnr �r
December 6, 1994
SUBJECT:
Status Report on Selection of Consultants and other actions with Regard to
Merrithew Memorial Hospital Replacement
SPECIFIC REOUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. Approve the selection of Henry W. Zaretsky, Ph.D. as the consultant for
health care policy with regard to hospital and health care alternatives.
2. Approve and authorize the County Administrator to negotiate a contract
with either Peat Marwick or Ernst & Young for the financial component of a
study of alternatives depending on availability, timing and cost.
3. Approve and authorize the County Administrator to negotiate a contract
with either Orrick, Herrington & Sutcliffe or O'Melveny & Myers for the
legal component of a study of alternatives depending on availability, timing
and cost.
4. Approve the selection of Kaplan, McLaughlin & Dias (KMD) as the
consultant for architectural issues with regard to alternatives.
5. Authorize the Chairman of the Board to sign letters to all of the County's
State and Federal legislative representatives requesting assistance in
obtaining waivers for the use of SB1732 and eligibility for 855 funding
without a County hospital.
6. Direct that all district and private hospitals in the County be asked to
submit proposals for the care of County patients on the basis of the County
continuing to operate Merrithew Memorial Hospital and a similar proposal
with the assumption that the County does not continue to operate a County
hospital.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
1 HER Y CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) / AND CORR COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED 0 E MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON T DATE SHOWN.
ATTESTED
Contact: PHIL BATCHELOR.CLERK OF BOARD OF
CC: SUPERVISORS AND COUNTY ADMIN RATOR
BY UTY
J
7. Authorize and direct the Committee to meet with the Trustee in
Bankruptcy, John Connelly, for the Los Medanos Community Hospital to
discuss options for the County acquisition of the hospital asserts and the
skilled nursing facility.
8. Authorize Supervisor Tom Torlakson to continue with meetings with the Los
Medanos Hospital Board on reopening that facility.
9. Direct that the Board receive a report and recommendation on the
consultant findings by January 17, 1995.
BACKGROUND:
The Ad-Hoc Committee on consultant selection and a second opinion on defeasance
of the Merrithew Hospital Replacement Project financing met on December 1, 1994
with staff and members of the public to discuss the scope of consultant services with
regard to the alternatives for hospital services. Aside from Committee members and
County staff the following persons were in attendance: Kevin Degnan, Paul
O'Roark, Neal Gilbert, Grace Ellis and Paul Katz.
The Committee discussed the scope of duties for a health care consultant in relation
to alternatives for the construction of Merrithew and alternatives including all or
part of the Merrithew Replacement Project. Suggestions were made for expansion
of the scope to include a broad look at alternatives with detailed financial analysis.
Staff were directed to meet with the selected consultants and discuss scope, cost
and timing. The study scope was expanded to include contracting with other
hospitals in the County. The Committee asked that letters be sent to all hospitals
in the County asking for proposals for contracting for the care of County patients
under the assumption that the County would continue to operate Merrithew and with
the assumption that Merrithew was closed. The Committee directed that a completed
report be returned to the Board by January 17, 1995.
Committee members and staff reported on the most recent information available on the
decision process for disposition of the Los Medanos Hospital. It was reported that
the deadline for submittal of proposals to the Trustee has been extended to January
31, 1995. Staff were directed to arrange a meeting for the Committee with the
Bankruptcy Trustee to further discuss the County proposal and current actions as
well as the status of the skilled nursing facility.
It was recommended that a letter be sent to all of the County's state and federal
legislators requesting their assistance in obtaining waivers for the use of health and
hospital revenues to allow more flexibility in their use. Waivers would be needed so
that SB1732 reimbursement could be used for acquisition rather then just for
construction and SB 855 funds could be obtained without operating a County
hospital.
Attached to this report are materials prepared by staff outlining ideas for a study
scope and an executive summary of the options with pros and cons of each as has
been discussed in prior reports and studies. These items as well as others
discussed by the Committee including review of operational costs for the various
alternatives will be discussed with the consultants.
The next meeting of the Ad-Hoc Committee is scheduled for December 15, 1994 at
3:00 p.m. in the office of Supervisor Mark DeSaulnier.
Contact: DeRoyce Bell 646-4093
cc: County Administrator
Health Services Director
Auditor-Controller
County Counsel
CONTRA COSTA COUNTY
HEALTH CARE POLICY CONSULTANT SCOPE OF -SERVICES
LOS MEDANOS REVIEW
12/1/94
Los Medanos Hospital located in East County is currently
closed. Potentially, two major options may exist: A. Continue
with the replacement project and utilize Los Medanos as an
ancillary campus of Merrithew in conformance with the master
building plan; or B. Close Merrithew and utilize Los Medanos
as the full service County Hospital. From a strategic planning
perspective:
1. Review past studies which have been conducted on the
future of publicly-sponsored health services in Contra
Costa County.
2. Review the County's programmatic plan for use of Los
Medanos as an extension of Merrithew.
3. Assess the impact of the State's Managed Care Initiative
-under both options.
4 . Determine the Hospital needs of the anticipated
population to be served based on demographic
characteristics, economic status, and health status.
5. Assess the marketability of the Contra Costa Health Plan
under both options.
6. Render an opinion as to the viability of both options.
CONTRA COSTA COUNTY
FINANCIAL CONSULTANT SCOPE OF SERVICES
LOS MEDANOS REVIEW
12/1/94
The County's financial plan for Capital Construction is based
upon revenues from three sources: The Hospital
Construction/Renovation Reimbursement Program (SB 1732) , Medi-
Cal Disproportionate Share Hospital Payments (SB 855) and
Medicare capital.
1. Provide an analysis of the three revenue sources with a
risk assessment regarding the probability of the funding
continuing over the life of the project.
2 . Determine if SB 1732 can be used for Acquisition through
a Capital lease or through an out right purchase.
3. Determine through a nation wide search if waivers have
been granted regarding the manner in which SB 855 funds
can be or are available e.g. through contracted days.
The cost of defeasance (project abandonment) is estimated at
$25 million.
4. Determine if SB 1732, SB 855, or Medicare reimbursement
principles consider project abandonment costs as a
reimbursable expense.
5. Identify any other third-party revenue source which could
be utilized to offset the cost of defeasance.
CONTRA COSTA COUNTY
ARCHITECTURAL CONSULTANT SCOPE OF SERVICES
LOS MEDANOS REVIEW
12/1/94
Final plans for the replacement 144 bed medical surgical
facility have been completed. If a change to these plans is
required:
1. Determine the cost of re-programming the facility to
include 46 acute psychiatric beds and reducing the number
of medical/surgical beds.
2. Determine the time to accomplish the re-programming.
3. Determine what if any savings would occur if 25
medical/surgical beds where "shelled in" rather than
fully constructed.
4 . Determine what steps are necessary to accomplish item
o3n
CONTRA COSTA COUNTY
LEGAL CONSULTANT SCOPE OF SERVICES
LOS MEDANOS REVIEW
12/1/94
The County's ability to utilize Los Medanos is contingent upon
securing the physical asset free from legal entanglements. _
1. Determine/describe the steps required by the Bankruptcy Court
in selecting a new operator of Los Medanos Hospital.
2. Determine/describe the role of the court-appointed Receiver.
3. Determine/describe the role of Cal-Mortgage
4. Determine/describe the role of the Elected Hospital District
Board vrs. the Los Medanos Hospital Corporation Board.
5. Identify any significant legal barriers or concerns the County
should address in the event acquisition is desired.
CONTRA COSTA COUNTY
CONSULTANTS
LOS MEDANOS REVIEW
12/1/94
HEALTH CARE POLICY
o Henry W. Zaretsky, . Ph.D.
o Henrik Blum, M.D.
o Robert Tranquada, M.D.
FINANCIAL
o Peat Marwick
o Ernst a Young
ARCHITECTURAL
o Kaplan, Mc Laughlin, Diaz (KMD)
LEGAL
o Orrick, Herrington a Suttcliff
o O•Melveny & Meyers
TIME FRAME
Thirty (30) Days
COST
$5,000 - $10,000
i
County Administrator Contra Sowd of Supeirvtoom
Tom Powers
County Administration BuildingI st District
651 Pine Street 11th Floor Costa Jell Sndth
Martinez,California 94553-12292nd District
(510)$46-4080 County
FAX:(510)646-4098 G"11"Op
3rd District
Phil Batchelor ...........
Sunne WrIght McP"k
County Administrator Am District
x. Torn Tortakson
Sin District
DATE: November 30, 1994
TO: Mark DeSaulnier
District TV-Supervisor
FROM: Phil Batchelor
County Administrator
SUBJECT: Executive Summary of Options Regarding Merrithew Replacement Project
In response to your request for an Executive Summary of the different options available to
the County regarding replacing Merrithew, I have outlined in the attached the various pros
and cons associated with each significant option.
Attachment
OPTION 1 -- REPLACING MERRITHEW
PROS CONS
1. Capital financing secured. 1. Political resistance.
2. Centrally-located facility. 2. Empty beds at District Hospitals.
3. Maintains residency program. 3. Inpatient services centralized.
4. Maintains disproportionate share 4. Possibility for legislative changes to
funding. alter financing scheme.
S. Keeps health care Wtem intact.
6. County maintains control.
7. Title VI challenge defeated at
administrative & judicial levels.
8. Proven experience in &
commitment to serving poor.
9. Hospital busy & popular with
target population despite
dilapidated conditions.
10. Consolidation of inpatient services
in central place preferable for
economic and quality reasons.
11. Staff-model HMOs universally own
& operate their own facilities (e.g.,
Kaiser).
12. No large county without U.C.
Medical Center has closed its
county hospital.
13. Ensures continued viability of
trauma care system.
13. likely to attract new members to
CCHP.
Ewcutive Summary— County Hospital Options Page 1
OPTION 2 » CONTRACTING WITH DISTRICT HOSPITALS
PROS CONS
1. Available beds. 1. Historical and current unreliability
in contracting (witness-the:recent
2. Potential long-term savings. cancellation of contract with
Delta). -
3. Districts interested in contracting.
2. Costs to defease bonds for =
4. Regional hospitalization available Merrithew project.
to County patients.
3. Labor/employee rights issues.
5. 5g services are & should be
contracted out, as is the current 4. County employee layoffs.
practice.
5. Potential legal challenges (e.g.,
Legal Services)/Beilenson.
6. No District Hospital is currently
operating in East County.
7. Potential financial exposure.
8. Barriers to medical staff
integration.
9. Uncertain physical/financial
stability of District Hospitals (e.g.,
Brookside has been noted as a
going concern).
10. Patient care issues.(e.g., no
neurosurgery, ENT, & other
specialty services available at
Brookside).
11. Imprudence of contracting for all
services.
12. Assuming no change in
governance, high risk involved in
surrendering control to institutions
with limited understanding of
current & future market trends.
Ewcutive Summary— County Hospital Options Page 2
OPTION 3A -- BUYING LOS MEDANOS FOR USE AS THE COUNTY HOSPITAL
PROS CONS
1. Facility currently available. 1. Too small.
2. Possibility of local community 2. Experience as acute care facility a
support. failure/low East county census.
3. Non-central location.
4. Defeasance costs.
S. County employee layoffs.
6. Merrithew project funds
unavailable to purchase facility.
7. Preferences of creditors (4000+) &
corporations with a voice in
disposition of facility uncertain.
8. Potential for labor clash between
former LMCH employees & layed-
off County employees.
9. Lack of support from physician
community.
Erec uove Summary— County Hospital Options Page 3
OPTION 3B .- BUYING LOS MEDANOS OR OTHER FACILITIES
FOR USE AS PART OF THE COUNTY HEALTH CARE SYSTEM
PROS CONS
1. Permits transfer of inpatient 1. Purchase costs unknown.
psychiatric services to improved
facility. 2. Community concern about
rceived risks associated with
2. Permits relocation of ambulatory transfer of psychiatric services and
care services to improved loss of ER.
facility/saves funds otherwise
needed to update outmoded
facility.
3. Recycles existing inventory of acute
care beds to better meet health
care needs of community.
4. Community support likely.
5. Los Medanos facility currently
available.
6. Potential for increased CCHP
enrollment.
Executive Summary— County Hospital Options Page 4
OPTION 4 » CONSOLIDATION OF THE THREE HOSPITAL DISTRICTS
PROS CONS
1. Establishes uniform administration. 1. Fierce resistance from District
Hospitals certain.
2. Potential cost savings. _
3. Better regional health planning.
4. Greater consolidation of specialty
services.
S. Can be initiated by LAFCO.
6. Supported by Contra Costa Times
editorial staff.
7. May receive strong community
support.
8. Potential for increased enrollment
of Medi-Cal recipients in CCHP.
9. Access to inpatient care closer to
home for some patients.
Ewcutive Summary— County Hospital Options Page 5
OPTION 5 -- JOINT POWERS AGREEMENT
PROS CONS
1. Establishes uniform administration. 1. Governance issues.
2. Potential cost savings. 2. Some resistence from District
Hospitals likely.
3. Better regional health planning.
4. Greater consolidation of specialty
services.
5. Potential for strong community
support.,
8. Potential for increased enrollment
of Medi-Cal recipients in CCHP.
Executive Surnmary— County Hospital Options Page 6