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Chairman Takes County Hospital Consultants to Task Over Lack of Savings

"You're six months into your contract. Why are we not seeing more benefits?", board Chairman Jeff Stone asked Jill Olsen, senior director of Chicago-based Huron Consulting Inc. "Our hospital is in an emergency situation."

An aerial view of the 517,000 square-foot complex, located in Moreno Valley. Photo courtesy: RBB Architects Inc.
An aerial view of the 517,000 square-foot complex, located in Moreno Valley. Photo courtesy: RBB Architects Inc.

Dissatisfied with the apparent slowness with which cost-saving measures are being implemented at Riverside County Regional Medical Center, the chairman of the Board of Supervisors this week demanded answers from consultants hired to return the hospital to fiscal health.

"You're six months into your contract. Why are we not seeing more benefits?", board Chairman Jeff Stone asked Jill Olsen, senior director of Chicago-based Huron Consulting Inc. "Our hospital is in an emergency situation."

Stone's displeasure stemmed from a biweekly update provided by Huron and RCRMC CEO Lowell Johnson showing the hospital's cash shortfall at the end of the current fiscal year only declining by an estimated $1.2 million -- from $83.2 to $82 million.

The chairman noted that Huron was in the process of "launching" initiatives intended to save the county up to $58.1 million, but had not actually implemented any of them.

"We chose your firm because we believed it would be the one to help us get back on track again," Stone said.

Olsen explained that the "launched" category represented "a trajectory of where we're going to be" and that it would "take two to three weeks" before the consultants could begin factoring which initiatives would translate to actual savings -- and the likely amount -- in the current fiscal year.

RCRMC Chief Financial Officer Chris Hans defended Huron's strategy, pointing out that efforts had already netted $9 million in savings on salaries and benefits. He said factors out of the consultants' control included a quarterly loss of "patient traffic" that Hans attributed to Obamacare.

"We don't have a handle on that exactly (but) we think it's because people have more choices now; they're trying other hospitals," Hans said. "We're hoping that with the improvements we're putting in place, they'll come back."

According to the CFO, the dip in patient traffic has resulted in $12 million less revenue.

Stone reiterated concerns he raised last week regarding the Moreno Valley hospital's unresolved treatment authorization requests, or TARs, which are submitted to private insurance companies, as well as Medi-Cal and Medicare, to receive payment for services rendered to patients.

Documents provided by Johnson indicated there was a backlog, accumulated since January, of 782 TARs, representing $61.4 million in outlays. Johnson apologized for the logjam, informing the board "the wrong person" had been in charge of managing patient authorizations, but that individual had been replaced.

Lowell's update to the board Tuesday noted that "the (TARs) backlog has not yet stopped growing," prompting Stone to call on the Executive Office to reassess the hospital's billing practices and take "appropriate steps to obtain reimbursements" from insurers.

Stone, a licensed pharmacist, sympathized with county staff trying to procure payments from Medicare and Medi-Cal.

"These agencies are changing billing codes intentionally," hoping a year will pass and they will no longer have to issue payments, Stone said, though still insisting that more should be done to clear the backlog.

A progress report released by Huron in February indicated RCRMC would be put on a path leading to eventual amortization of its nearly $50 million in annual red ink, thanks to changes in labor usage, lower-cost pharmacy programs and implementation of a host of other operational efficiencies.

Both Johnson's $1.2 million contract and Huron's $26 million contract are slated to expire at the end of next year, though the county has early- termination clauses that can be exercised at any time.

LAKE ELSINORE RESIDENT April 23, 2014 at 01:33 PM
I believe Jeff is doing a bang up job as a County Supervisor and he doesn't need to go to the Senate. Jeff please stay put on the BOS.
Rae Anne Resident April 23, 2014 at 02:30 PM
Jeff is probly the best policticlian we got in this area. I noed that his ideas to have Califonia do the succession and to make Califonia into a bunch of littel power less states instead of one power full state is still my faverite ideas that he has gotted. he almost as smart as my all time faverite policticlian in the world sarah palin. those two would be my dream ticket for president and vise president.
Paul Jacobs April 23, 2014 at 03:33 PM
Stone opposes and will work to repeal ObamaCare, according to his web site http://www.jeffstone2014.com/issues/. If Stone believes in the free market and that government should stay out of health care, why does the County not walk the talk and get out of the health care business? Why has the County expanded government with 5 conservatives at the helm? The County just borrowed $2 million from the Worker's Compensation Fund for sewers in wine country -- a project that is only half funded -- but the local press doesn't find that story newsworthy.
Ken Mayes April 23, 2014 at 06:42 PM
All this ballyhoo about a county facility that went deeper into debt during Mr. Stones tenure on the Board of Supervisors. Where has he been since 2004. It took years to get this bad and he wants it fixed NOW.

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