Special Feature

October 23rd, 2008

The Election for the Palomar Pomerado Health District

Normally, the election of board members for the Palomar Pomerado Health District is a “who cares?” election. In the past there have not been many issues, the candidates were not well known, indeed, the district was not well known, even though it encompasses an 800 square mile area.

Not so this election year. People are angry. They feel they’ve been lied to, that promises made have not been kept, and the money they approved in a $496 million bond issue has been frittered away, and that the new hospital being built on the western edge of Escondido is being trimmed back so much that the end result will not resemble what was promised. Further, they wonder where the money is coming from to even complete construction.

As a result, we have a number of candidates this year. Three incumbents, four challengers. In alphabetical order, they are:

Four Year Term

John Amodeo, retired business manager
Donald Brust, DVM, retired
Nancy Bassett, RN, incumbent
Linda Greer, RN, incumbent
Evelyn Madison, business manager and former board member
Marcelo Rivera, MD, incumbent

Two Year Term

Jerry Kaufman, Physical Therapist, former Escondido councilmember
Lee Thibadeau, businessman, former elected San Marcos city official

Based on observation, personal interviews, and returned questionaires sent to each candidate, here are excerpts from the expressed thoughts of the candidates:

John Amodeo:
I offer a fresh set of values, 38 years of experience in running public agencies, proven decision-making, compassionate treatment of employees, 38 years of dedication to the public. I am the only candidate, including sitting directors, that has the experience of running a California public agency. The purpose of the Board of Directors is to set the policies for the District staff to implement. The Board must provide oversight and broad policy for the paid professionals to implement.

I believe that the CEO should be compensated fairly for the responsibility he shoulders, however, if the District is hurting, the CEO should be the first one to step up to the plate. The Board must set goals and objectives for the CEO and monitor his progress periodically. My initial take of a salary of the magnitude of Mr. Covert appears quite high, especially if other provisions in his contract are very generous.

The CEO reports that morale is at an all time high. Physicians are not in agreement at all with this comment. When the public actually attends the board meetings, it is apparent that the Board members have access to more information than has been made available to the public prior to the open discussion.

The new hospital is neither on schedule, nor within budget. Prop BB funds were not sufficient, so the District sold Revenue Bonds to make up the difference between BB funds and what was needed. The public was not notified of the added $¼ Billion bond sale. While I believe all commitments will eventually be kept, all will be considerably over budget and completed later than promised.

Dr. Donald Brust, DVM, retired:
I offer the voters experience, leadership and integrity. I am medically trained and owned my own medical business for 38 years and was a school board member for 8 years. I was also a stem cell transplant patient with 100+ days in three different hospitals. I have been president of two different Rotary clubs. I served as a track and field official at the 1984 Olympic games in Los Angeles and at 1992 Olympic trials in New Orleans.
Dr. Don Brust, DVM, Retired

Criticism of the president and CEO indicates that evidence is mounting. His performance has major flaws which it appears will cost the District considerable tax dollars. Criticism is fair if one looks beyond the "glitz."
The actions of the Board need more transparency and increased comprehensive information from the PR department. Why pay a PR officer to blow your horn continually?

There are serious flaws in the Board's actions based on the financial pickle they find themselves in and their evaluation of hiring the current CEO. Financial repercussions to the District appear very significant which in the long run will reflect upon the delivery of medical care provided to the District's citizens.

Linda Greer, RN, incumbent:
I have four years of experience with this Board and CEO. I know our accomplishments and our need for improvement. I am independent, tenacious, I believe in transparency The public should have access to all information.

Our collective mission is to be the best place to service the sick in our district with the best nurses, best doctors and the best equipment available. Executive compensation must be earned. Executive compensation becomes out of line when it is not earned and if the district is in financial trouble. We are on schedule to complete the hospital in late 2011. So far, we have purchased five properties on Grand Ave., Valley Boulevard and East Valley Parkway. We have now met our commitment in the MOU, and the city will need to close down Valley Boulevard.

The city and PPH agreed it would cost approx. 19$ million to expand and retrofit Citracado to ensure great road access to the new hospital at ERCT. PPH gave the city $13 million to expand and the other $6 million would be collected from sales tax revenue from the purchases of all our medical supplies, which has given Escondido 1.4 million dollars in interest so far. In addition to the 5 properties downtown, we have purchased 2 buildings within the city of Escondido, 2227 Enterprise St. and 975 South Andreasen. There are 200 employees from the Carmel Mountain Ranch office to these two locations. The entire warehouse supply chain services for the district, the finance department and our Home Health department have arrived as well.

The Foundation is working very hard to help us achieve our goals. Our own staff, physicians and the public have been very supportive. The new state of the economy is very worrisome. The cost of the new hospital at ERCT is $773 million it is not $980. That cost is the entire cost of the Facilities Master Plan.

Evelyn Madison, businesswoman, former board member:
I offer first-hand experience, having successfully served on the PPH board previously. In addition, I have a business background with a degree in business administration, experience in multiple types of businesses, and am an advocate for the residents of the district, all of which make me one of the most qualified to fill a board position. My community involvement in leadership positions of many organizations for the past 40+ years contribute to my success, and would be an asset to the board.

As a publicly-elected board member, my mission is one of trust; trust to look out for the communities' interest and benefit in this hospital district, and make sure that quality health care is provided. The Board's purpose is to establish policy; effect changes in any areas where there might be considered mismanagement, gross extravagance, and arrogant disregard for accountability; and make sure that employees are appreciated, treated fairly, and do not feel intimidated.

Executive compensation should be based on experience and set from a salary schedule in line with those paid to other comparable professionals. I am not in favor of bonuses for doing the work they were hired and being paid to do. Executive compensation becomes out of line when it is much higher than others in comparable positions and big bonuses are given. Personally, I believe the present rate of compensation to be excessive. It is much higher than some comparable positions in San Diego County for other district health systems.

There appears to be an arrogant disregard for accountability; intimidation; and a sense of superiority, instead of an attitude of working together to solve any problem.

From first-hand knowledge, the criticism of the present management team is fair. Response is forthcoming only when it benefits them. My style is to have transparent and open communication with the public and media, an open door policy, if you will; listen, research information, and address concerns in a timely manner. One of my goals is to make sure that commitments are kept, particularly with regard to the current hospital site.

The Foundation is working diligently to raise money needed for completion of the facilities; in addition, it is my understanding that the doctors have been asked to contribute. The health system probably will need to "tighten its belt" and in order to save money look for needless expenses that could be cut and/or look into contracting with others to provide specific services.

It appears that some decisions were made that might not have been the most prudent in a business sense. We, the public, have no way of knowing if they have researched issues and policies and are doing a proper job. What we do know is that one of the board's most important functions is that of hiring and working with the CEO; and due diligence in that regard means researching all avenues before you hire someone to make sure they are credible and have the experience and knowledge that you need and want without any hidden baggage and agendas.

Neither Nancy Bassett nor Marcelo Rivera, MD., returned questionaires so they will not be profiled.

Jerry Kaufman, Physical Therapist, former councilmember:
I offer voters strong leadership, and 40 years of expertise as a provider of physical therapy services to thousands of people in hospitals, skilled nursing facilities, home health agencies and in three private practices which I built and sold. I also offer experience at the state level where I spent 9 years on the Physical Therapy Board of California, for the purpose of consumer protection in rehabilitation. My background includes working for the 2 largest private hospital corporations in the world, American Medical International and National Medical Enterprises.

I see my mission as serving the residents of this district as their representative on the board, and to pursue transparency and full disclosure by the hospital through honest and prompt responses to the peoples' concerns. Our purpose is to set policy, assure financial success through hiring of a competent CEO, evaluate the CEO for achieving goals and act as agents for the people of the district.

Total compensation needs to be evaluated based upon the base salary, bonuses, deferred compensation and retirement plan compensation. Based upon other public hospitals of similar size and revenue in the U.S., the current total compensation package would appear to be fair and reasonable.

The question as to ‘heavy criticism’ directed toward our president and CEO for his performance, has come mostly from your paper. Criticism is fair if the purpose is to achieve correction of the perceived problems, but not if it's goal is to cause dissension and division without working toward a practical solution. Any objective criticism should be reviewed by the board and discussed with the CEO for possibilities of resolution.

As a public entity, using public funds, the residents of the district should have full disclosure and accountability of the use of these funds over time. Transparency and full disclosure are issues affecting our district. When taxpayers are footing the bill, we have a right to honest answers from a public entity. If this is not forthcoming, the board has a responsibility to the taxpayers to get them the answers they are entitled to.

The initial year's delay in getting approval of the ERTC site followed by the general economic downturn has not been completely offset. Much of the land has been purchased for expansion and satellite clinics, and some developments are ahead of others, but we will see completion of the entire project.

Prop BB Bonds were never intended to cover the entire cost of future development. PPH West and related projects will be completed by managing capital costs, raising 200-300 million in revenue bonds (not paid through taxes), philanthropic donations and private investment opportunities. Some of the downtown improvements will most certainly be accomplished in cooperation with private developers.

I was not involved with the hiring of Mr. Covert and have no inside information on how diligently the board researched his prior performance record. If something should come to light that would make it impossible for the CEO to perform his responsibilities, it would take 4 members of the board to make a change.

Lee Thibadeau, businessman, former San Marcos Mayor and councilman:
Palomar is in the process of implementing Prop. BB, a $496 million dollar bond measure approved by the voters in 2006. The initial budget for the promises made the voters exceeded $1 Billion dollars … it has since been pared down to $980 million. They plan on bonding a minimum of $796 million, but their budget goes from an annualized 2008 budgeted income (profit) of $12,612 million to a 2009 projected income (profit) of $25,103. How do they get there ? Even if correct, that will not make the required bond payments.

I have a proven track record of financial successes for the City of San Marcos as well as my profession. Palomar’s existing Board is composed of medical professionals, not business people. I believe my proven record of taking a ‘near bankrupt’ City to becoming one of the financially strongest cities in the State will go a long way toward putting Palomar in stronger, safer financial footing.

My mission would be to provide expertise and creativity in finding ways to ‘stop’ the pending ‘bleeding’ of its financial position and turn it around by better utilizing current and future assets to provide a positive cash flow. The Board’ s purpose is to ‘over-see’ and guide the District in providing the best health care in the most reasonable cost effective manner. If this means ‘speaking out’ or effecting change, then that is what must be done. I don’t believe the Board can continue the ‘status quo’.

Compensation should be compared with both the health industry and the private sectors (real world). Many times tax supported organizations will set themselves up to feed off itself/each other …. In other words, compare its executive compensation with its peers, where convenient. For example look at ‘other’ executive compensation packages in same industry that is at the ‘top’ end of the scale and say, “ …. Gee, we need to be ‘more’ competitive or we will lose this executive to the ‘other guy’…” and they raise his compensation to a higher level than his peers as he is always better, then the peers come along and use his to increase theirs and the cycle goes on ….

My gut and ‘real world’ experience says Mr. Cover is probably ‘over-compensated’ by at least $300,000 to $350,000. We also have to remember, this is taxpayer money and if you put his pension, medical, automobile, etc. all together, what is his real compensation and is it fair for the taxpayer.

My experience with the CEO so far has sent up several “red” flags. Conventional wisdom says where there is smoke there is fire, I would want to spend some time digging into this…. Including ‘confidential’ time with employees and employee representatives.

I am very much concerned about the lack of transparency. For example, Palomar raised rates 8% in the past year, why has it not been reported in at least the written media? Was it because it was ‘slipped’ thru as a report item that did not get discussed in public? The increase may have been more than justified, but it should have been ‘aired in public’. I have also experienced a ‘lack of responsiveness’ in the recent past. This needs to be corrected and monitored by the Board of Directors … diligently and openly. The Palomar Pomerado Health District is far too committed financially and demonstrate little ability to meet the financial commitments, let alone the physical commitments.

If elected, the first thing I would look to is the $1,068,591,000. Yes, you read that right, it is ONE Billion ($1 billion) sixty eight million of what is referred to in the budget recap as “Bad Debt” …. With a total or Gross Revenue of $1,499,232,000 (One Billion, four hundred ninety nine million, two hundred thirty two thousand dollars) how do you lose a Billion plus dollars? I would look at why that amount is so high, where it comes from and why it disappears …. A CEO making $676,000 plus a year should have already ‘plugged’ that hole, or certainly most of it. The challenge for me is to ‘totally’ understand this number as soon as possible, then immediately work on resolving this unexplained “Bad Debt”.

From what I’ve observed thus far, and the questions that have come up regarding both the ‘Capital and Operating Budgets’, I suspect either the Board or the CEO or both has not done their job. That is why they need a strong Board member with no potential for conflicts of interest with a ‘proven’ background in financial and economic expertise.

Based on the answers to the questionaire, personal interviews and observations of their work, The Paper has endorsed, for the four year term:

Donald Brust
Linda Greer
Evelyn Madison

For the two year term:

Lee Thibadeau

Note: As a matter of full disclosure, we wish to advise the voters that Evelyn Madison is associate publisher, and columnist, for The Paper.

This year we have a very important election for a number of offices and a number of bond issues and or propositions. We urge you to study the issues and be sure to vote on November 4th.

Next week, in our October 30th issue, we will list all of our endorsements.