Hospital chief’s job may be on line

Adrienne Packer

Thursday, Nov. 14, 2002 | 11:19 a.m.

A turbulent year during which University Medical Center plummeted $40 million into debt has left chief executive officer Bill Hale's future with the hospital up for discussion, Clark County sources said.

Hale's contract, which makes him the highest-paid public official in the state at $240,000 a year, expires in February 2004.

Clark County commissioners recently agreed to have Hale report to county manager Thom Reilly as administrators and financial experts work to halt the financial hemorrhaging at Southern Nevada's only public hospital.

Until a complete assessment shows whether mismanagement or a poor economy contributed to the hospital's financial woes, Reilly said Hale will remain UMC's chief.

"In the next three months we'll specifically look from top to bottom to see how UMC operates," Reilly said. "Part of that determination will be what role Bill would have now and in the future."

Commissioners, who also serve as the hospital's Board of Trustees, criticized Hale for putting off updating them about the mounting debt. Now county officials must drum up $37 million from this year's budget to help the hospital pay its past-due bills.

An influx of uninsured patients and only partial Medicaid reimbursements from the state triggered the downward spiral in April. The trend wasn't detected until the post-quarter analysis in August, Hale said.

Hale said it's likely that people who were laid off after the Sept. 11 terrorist attacks saw their health insurance lapse. Medicaid patients cost UMC about $4 million to $5 million a month; the state's payments averaged around $2 million.

"Maybe I can be faulted for not realizing sooner the hospital was deteriorating as quickly as it was," Hale said. "I didn't know how bad it was until we analyzed that quarter. I understand the board's concern they weren't told sooner, but I'm not sure based on what happened I could have told them sooner."

A preliminary report regarding the hospital's financial situation was delivered to the board in August. Hospital administrators pinned the debt at $9 million; the estimate has since grown to $37 million.

The board agreed to a one-shot $20 million subsidy to help UMC catch up on vendor bills and at least another $17 million to cover monthly deficits that have hovered around $2 million.

The subsidy essentially depletes the county's major projects fund. Consequently a $3 million Sunset Park improvement project is expected to be delayed as well as plans to spend $5 million on new child welfare offices.

Reilly, Hale and Finance Director George Stevens have met twice since Deloitte and Touch delivered a grim report on the hospital's financial status. The three are drafting methods to cut back on expenditures.

Deloitte and Touche, the Lewin Group, Price Waterhouse Coopers and the county's internal audit are conducting a complete assessment of the hospital.

Other county projects might not have suffered had the board been told of the hospital's struggles sooner, Commissioner Dario Herrera said. It won't be determined what happened until the assessment is finished, but Herrera suggested that Hale might shoulder some of the blame.

"We'll have to have to have a candid discussion about whether or not the CEO is as effective as he could be," Herrera said. "If the answer is no, we need to consider all options."

Yvonne Atkinson Gates, vice chairwoman of the hospital board, also said the county should explore its options when Hale's contract expires.

Commissioner Mary Kincaid-Chauncey is most upset that construction of community centers and parks will be postponed because of the hospital's need to be bailed out. She too was stunned the board wasn't kept apprised of the growing deficit.

"We're going to find out exactly what happened," Kincaid-Chauncey said. "Somewhere along the line it had to be poor management."

During a UMC board meeting earlier this month, Public Administrator Jared Shafer blasted commissioners -- and Hale -- for mishandling the hospital.

"If I ran a hospital or any other business and lost this kind of money, you would fire me," Shafer said. "You guys aren't the experts in running a hospital and neither are the people running the hospital, obviously."

Hale, who said criticism accompanies a job like his, said the troubled year is due to special circumstances that have affected public hospitals nationwide.

"I've been in this business for 30 years and I've been doing things this way," Hale said. "I've been successful until now."

Finances weren't UMC's only troubles this year.

The hospital's trauma center closed for 10 days after souring medical malpractice insurance rates drove surgeons to resign. A subsequent UMC-sponsored newspaper advertisement urging insurance reform was deemed illegal because it offered one side of a political issue.

Earlier this year, county administrators directed Hale to cease waiving hospital employees' co-payments. Unbeknownst to county leaders, the practice had been ongoing for 20 years. Stevens said there is no way to track how much the hospital has lost during the last two decades. He estimated that in 2001 the waivers amounted to about $100,000.

The federal government also sued UMC for $1.2 million. The lawsuit involved fraud charges that stemmed from UMC requesting higher reimbursement rates from the federal government for Medicaid patients.