In these scandal-weary times, the alleged scandal isn't even the big news. Fired CEO Lacy Thomas is accused of passing out contracts like compliments, funneling contracts to his homies running businesses in Chicago, ignoring requests to submit monthly financial reports to his boss, County Manager Virginia Valentine, and underreporting UMC's financial woes by a mile. That UMC finds itself in almost the same situation as four years ago, when it needed a $33 million taxpayer-funded bailout, is the bigger news. Shortly after that cash grab, there were talks about changing UMC's structure. Should it be private? Can it attract well-heeled clientele? How do we prevent a repeat of this?
In other published reports and in comments to the Weekly, county officials have said that, no, the commission wasn't asleep at the wheel, that system worked well. If it didn't, they argue, we wouldn't have caught wind of this chicanery. Whether or not you buy that—disgruntled former UMC employees probably deserve most of the credit—ethicist Craig Walton says county government bears ultimate responsibility for this fiasco.
"Ethics-in-government laws don't have provisions that say you've got to do your job responsibly and there aren't exclusive passages [in these laws] that say you have to have good oversight, but these things are understood," says Walton, a UNLV professor and founder of the Nevada Center for Public Ethics, which is pushing 11 legislative bills designed to put teeth into state ethics laws. "The people in charge of UMC have the authority to act on behalf of the community because it was delegated to them by the commission. And they [commissioners] are supposed to watch the people they delegate to. You're always going to have some surprises, but they should've set up some reporting system [a long time ago] that would've let them keep their hands on the system so that we don't have these big surprises."
There are more pressing matters than assigning blame. Like determining if the scandal compromised patient care and how, and if, UMC will ever be break even, much less be profitable.
Valentine says the current situation hasn't negatively impacted patient care: "There are 4,000 hardworking and dedicated professionals at UMC" who are committed to providing the best care. Valentine insists the systems were in place to detect chicanery. But you can have all the procedures in place, "if people are not following through, it won't help you."
As the Valley's lone public medical facility, UMC is in the unenviable position of treating all entering its doors—be they underinsured, uninsured or indigent. The Charleston Avenue facility is home to the state's lone Level 1 trauma center, treating everyone from car-accident survivors to gunshot victims. So closure is out of the question. If outgoing commissioner Yvonne Atkinson Gates is to be believed—she resigned the same day Thomas was fired, raising eyebrows because of their friendship; on the same day, police raided UMC on suspicions of fraud and misconduct—then UMC, as its structured, will never make money.
Thomas talked big but failed to deliver on his promise of making UMC a hospital of first choice, attracting paying clients who'd presumably bypass the gleaming new facilities popping up in nearly every corner of the Valley. Odds are, if you live in Summerlin, you'll go to Summerlin, Mountain View, Southern Hills or even Spring Valley hospitals before considering UMC.
Presuming that taxpayers will eventually tire of bailing out UMC, maybe it's time to explore privatization in some form.
Between 1978 and 1995, the number of government-owned acute care public hospitals declined by one quarter, according to 1996's "Public Hospitals—A Prescription for Survival." A 2000 survey by the Washington, D.C.-based National Association of Public Hospitals and Health Systems found that half of its 100-plus member hospitals were operating in the red. Back in 2003, the Washington Post reported that from 1985 to 1995, nearly 300 public hospitals converted to private, for-profit ventures. Last year, the Martin Luther King Jr./Drew Medical in south Los Angeles failed a crucial federal inspection and lost $200 million in funding. Jim Lott, executive vice president of the Hospital Association of Southern California, told the LA Times the only way to save the hospital was to hand it over to a private chain "lock, stock and barrel."
So far, this hasn't been put on our table.
Charles Brecher, an NYU professor of public and health administration and co-author of 1995's widely cited Privatization and Public Hospitals, says UMC fits the mold of one of two kinds of hospitals currently under pressure to privatize: research-intense facilities affiliated with universities and medical centers and public outfits run local governments and intended to serve the needy. He says hospitals in the latter category, like UMC, have benefited from creating autonomous public benefit corporations. Municipal leaders select the members and deputize them with ability to run the hospitals with an eye on improving fiscal strength. Such systems exist in New York and Arizona's Maricopa County.
"What's worked best is a form of privatization not in the sense of turning the hospital over to a private firm, but contracting out management," Brecher says. "In New York and other places, there is a merit structure, which spells financial incentives and is focused on maximizing revenues. In New York, the mayor and city council appoints this board. There's screening for the process and the members have fixed terms that overlap the mayor's so they're not beholden to the office."
What UMC becomes—research and teaching institution with centers of excellence vs. dedicated county hospital focusing on the indigent, public vs. private vs. semi-private—is up to county commissioners, Valentine says, and the public. She expects commissioners to revisit 2003's discussion on alternative operating models. "It's a complicated discussion and more than simply about going private or not."
Of course, creating another layer of bureaucracy can do more harm than good and there's no guarantee that privatization can save money or expand medical services and improve indigent care. If privatization isn't an option, maybe county commissioners, state lawmakers, or our federal representatives can explore Maryland's blueprint, where a state commission collects fees from profitable hospitals to help support facilities like Prince George's Hospital Center.
Something must be done, lest we find ourselves, four years from now, again digging in our pockets to save a hospital many of us don't—and won't—use.