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twitterUMC’s financial condition spurs talk of sale
It’s preliminary, but commissioners are looking at options for ailing hospital
Steve Marcus
Kerry Sanchez, right, a senior clinical lab assistant, confers with medical technologist Mike Hollister as she prepares blood for testing last week in the University Medical Center transfusion services department. County commissioners are studying their options for the hospital.
Friday, Nov. 27, 2009 | 2 a.m.
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With University Medical Center once again running tens of millions of dollars in the red, Clark County commissioners are considering ways to wash their hands of the public hospital.
It’s not the first time the county has broached the idea of divorcing itself from the hospital. Financial problems led the county to hire consultants who studied new organizational options, including a possible sale, in 2007. That study was presented to commissioners — and filed away.
But it was dusted off for a Nov. 9 meeting about UMC, where Kathy Silver, the hospital’s CEO, went over a list of options. Commissioners could set up a board that would be responsible for all governance and management of the hospital and its clinics but would report to the county, Silver said. Or commissioners could lease the hospital to another entity. Or they could transfer or sell it to a nonprofit organization. If they want to sell it to a for-profit, they would need a change in state law.
Commissioner Lawrence Weekly, chairman of the UMC board of trustees, said if he had to choose, he would appoint an advisory board that would report to the County Commission.
“We’d be making a real haphazard decision by just going to (the sale option),” Weekly said. Commissioner Susan Brager agreed.
Commissioner Rory Reid said an advisory board might be a “first step,” but he doubted that it would be enough.
Commissioners Larry Brown, Steve Sisolak and Chris Giunchigliani lined up more definitively against Weekly’s suggestion. Giunchigliani opposes giving power to people who aren’t elected, while Brown and Sisolak said it would do little to nothing to solve the problem.
All an advisory board would do is add “another layer of bureaucracy,” Sisolak said.
After the meeting Sisolak said he favors selling the hospital. But if too many of his fellow commissioners are opposed, Sisolak hopes the county can “lease it out, bring in not-for-profit operators or have the medical school take it over.”
Brown agrees that major change is needed because “UMC is becoming an obvious drain on all the other functions of the county.”
In the fiscal year ending June 30 the hospital reported an annual loss of $71 million. That same year the hospital provided $204 million in care for which it was never paid — an amount that has doubled from $102 million in 2005.
No one knows for sure how much it will lose in 2010. At the trustees meeting, Sisolak guessed $100 million.
But the county should not necessarily be looking at the bottom line when measuring the hospital’s value, said Tom Collins, the commissioner from the rural north. “I don’t think we treat the hospital the same way we do other county departments.”
Selling or putting a different entity in charge might save money for the county. But Collins says new management would seek lower salaries and good doctors would move away. “That would diminish all the good that (UMC) does, from trauma care to heart care to child care.”
But actual statistics on what happens when a public hospital goes private, especially research that addresses the bottom line, are hard find.
One study in 1999 looked at 52 acute care public hospitals that had been privatized, 37 to nonprofit organizations and 15 to for-profit companies. It found that on average, hospitals sold to for-profit companies cut the amount of care that went unpaid more than hospitals sold to nonprofit groups did.
But other than that, the Sun found little information that was on point.
A spokesman for the American Hospital Association said his group didn’t have much information about trends in privatizing hospitals. He referred questions to an association of hospital administrators.
That association referred the Sun to another.
When the Sun called Renown Regional Medical Center in Reno for background and the effect of Washoe County’s 1985 sale of its hospital to a private nonprofit corporation, the hospital responded with a one-paragraph statement. It said changing an organization is “very challenging” and “relies heavily on active cooperation from all parties involved.”
It also said Renown has “agreed to share lessons we learned during our transition from a public to private hospital” with Clark County commissioners and UMC.
That Reno sale was not without controversy. In 1995 a grand jury convened to look at the $12 million transaction. Though the sale was legal, an Associated Press story characterized the grand jury report as saying “the deal was not the best for taxpayers.”
At UMC, Silver declined to be interviewed for this story, saying it would be premature to discuss options for the hospital’s governance. Commissioners need to talk more first and give her their direction, she said.
Their next meeting about UMC is scheduled for Dec. 16.
They know that the proposed restructuring of the health insurance industry is a wild card. Those changes could either doom or save UMC depending on whom you ask.
Richard Tradewell, an adjunct professor in hospital administration at California State University-Long Beach, has written extensively on hospital privatization after working as a county hospital administrator in Los Angeles.
Any county hospital “on the edge now” is likely to see its financial woes grow if the proposed federal health care overhaul passes, Tradewell contends. He believes bringing millions more people into the health care system will result in decreased federal payments for that care.
The counterpoint to that, said Jon Summers, spokesman for Senate Majority Leader Harry Reid, D-Nev., who is shepherding the health care bill through Congress, is that hospitals will get something, whereas they got nothing before.
“There will be cuts in some payments, but the flip side is that the hospitals will also be compensated for the people they treat,” Summers said. “This will reduce the number of patients who get treatment without paying anything.”
Discussion: 14 comments so far…
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if they sell umc...
that would undercut the stupid pathetic lying republicans stupid pathetic fictitious argument that everybody can get health care these days...
how stupid and pathetic is that...
when you have cancer and need chemo can you just walk into the emergency room and get chemo treatment???
which lie is worse...
that one...
or...
calling end of life counseling "death panels"...
what a bunch of maggots...
who the hell would want to join the stupid pathetic lying republican party these days???
only l-o-s-e-r-s!!!
Well I have one question.... Where will all of the Mexicans that are not here legal going to go if they do not have UMC. Mexico does not want the problems back, rich folk hospitals are not gonna take them...
Here is an Idea send them to the Summerlin hospital. or to St. Rose.. Then it will not be a UMC problem, but EVERYBODYS problem,,, ( Rich white Folk Dont want that I am sure )
Free health care model does exist, it is UMC. UMC WILL not be the first hospital to go broke coddling the illegal immigrant population. VOTE OUT THE INCUMBENTS before they bankrupt everything and ask you and I to pay for it. Close UMC to stop the bleeding, force the illegals to seek another state to get free medical and social services in and focus on the legal citizens and our needs. We are the government, do not forget it.
maybe dubai will buy?
UMC is the provider in Southern Nevada touted by former Republican Governor List as a stop-gap to insure Nevadans without health insurance get treated.
Some, not all, Republicans believe the issue is not cost structure, but tort reform and opening markets to big insurance across state lines.
They are wrong on both.
Cost structure requires competition, and most private insurance companies providing private insurance, and many also contracted services to self insured corporations, do not have much competition in the regional or local markets in which they operate.
The public option, not as written in this healthcare bill, but down the road, will provide the competition.
Allowing big insurance companies to compete across state lines will lead to buyouts, mergers and a more consolidated insurance industry, within an industry exempted from anti-trust oversight by the McCarren legislation.
Where does one think that would lead? How has bundling in the gaming industry benefited labor, cost structure, debt structure, community, influence-control in public policy and taxation, and here's an oldie but goodie, "customer experience".
One could even argue at this point that bundling has not benefited shareholders, certainly those not well off enough or in the right age in life to benefit later 8-10 years down the road.
Goodness, what bundling would do to healthcare costs and delivery.
Mr. Sisolak is correct. If something is costing money, and is not working, things have to change. Patterns of problem outcomes do not go away on their own.
UMC is government health care. It doesn't even work on a small scale. A profit making company would want to lower salaries? DUH? That's what you do when your losing money. Government might take a hint.
Hey bird, you use that word maggot too often. You don't see anyone else talk about their food , do you?
There have been many articles explaining the problems at UMC. The main problem which our government officials are sweeping under the carpet is that illegals using UMC for their health problems are bankrupting this hospital. Our government will pay for any citizens medical bills, but will deny paying for any illegals medical bills, and instead of correcting the problem, they make laws stating that any patient that comes into these hospitals, must be treated no matter what country they are from or if they are a citizen or not.
It is pitiful that our hospitals must give medical attention to people who are in our country illegally knowing that they will never get reimbursed for their services and will eventually have to close down some of the services if not all of them that are helping our citizens. Would any one of you want to buy this property with the knowledge that it is set up for failure?
This is a lose, lose situation. Our government knows about it and are doing nothing to stop it.
Solve the problem of illegal immigration and health care reform and these problems go away.
Who would want it?
Rory Reid did a great job of running both Clark County and UMC straight into the ground and now he wants to take that same experience to the governors office so he can run the entire state of Nevada straight into the ground. LOL
Anyone around UMC can see what's wrong instead of burying your head in the sand the way the county comission does. Horrible contracts that ignore local physicians and the Univ of Nevada Medical School. Dept heads who are incompetent and still get promoted. Millions of dollars in income driven away because they are driving surgeons away that brought millions of money from insured patients. Horrible morale. Nurses that are insulting patients.
If you need a recipe for failure just look at UMC. The comission is incapable of running the place. Find a formula that let's a private company run the place and get rid of the cronyism. There is a skeleton that is place that can be built on to make it a better place.
UMC is a great facility and to sell it means this community has lost it's healthcare safety net. The biggest problem for the public hospital is that the greed in Clark County government prevents them from financing the hospital as it should be financed. If they allocated the proper funds for the hospital instead of hiding money in their pork funds then most of the problems would be resolved. But that would mean Commissioners wouldn't have $$ for their district for whatever they fund to help them get elected. Let's see, do I want a hospital that, heaven forbid, I lose my job and health care coverage that will treat me and make me better or do I want that money used to build some park close to my house........hummmm, it's a no brainer for me. Public hospitals were not "built" to make money, but rather, to make sure that every person who enters is treated. The folks at UMC have worked wonders under the financial perimeters that Clark County has mandated. Sell the hospital? NOT! Fund it properly for a change. Has everyone forgotten the gentleman who went to Sunrise ER was "treated" and instructed to follow up at UMC if he had any other problems? He left and dropped dead on their lawn. Or years ago the "uninsured" man with a knife in his chest that was at another private hospital in town. They "stabilized" him by securing the knife in his chest so it wouldn't move around while transporting him over to UMC....NO way, I will support UMC til the day I die. Wouldn't be treated anywhere else in town and I HAVE INSURNACE! Wake up Commissioners and do your job..thank you Commissioners Collins for saying it correctly~you can't treat the hospital the same way you treat other County departments!