County must keep an eye on Cambio
Oakland Tribune
Article Last Updated: Thursday, May 27, 2004 - 3:23:03 AM PST

THE Alameda County Medical Center's Board of Trustees has taken the unusual step of asking its turnaround consulting firm to hire interim staff and the permanent employees who will replace them, to the tune of $1 million a year for the salaries of top managers.

Given the abysmal performance of those overseeing the medical facilities in the past, it's probably not such a bad idea. However, the large amount of money the county is paying the firm does raise an eyebrow.

Cambio Health Solutions, based in Tennessee, was hired in February to find ways to make the centers more efficient and deal with the $71 million deficit. By March the firm had already identified some shocking lapses, including a huge number of claims being rejected by Medi-Cal and a minuscule return on the extensive services provided by the emergency room, one of the region's busiest. It even found the center was paying 37 cents to mail each bill rather than getting a bulk rate.

The inefficiencies resulted in $10 million wasted each year. That find alone made the firm's $3.2 million contract look like a deal.

Now, the board has decided to amend the contract so the firm can hire top temporary managers; the top four interim managers who were in the jobs, including the CEO and CFO, were fired. According to the amended contract, Cambio can spend $1 million on the top salaries, benefits and fees, amounting to $202,000 more than the previous managers earned.

Cambio's contract also includes a management fee as it finds permanent replacements for the interim positions; the fee decreases as the positions are filled.

The additional fee to Cambio and the added expense of the top managers comes just a month after the board of trustees eliminated 340 jobs to save between $14 million and $20 million a year. Understandably, union representatives questioned how the strapped health care system could afford more generous top management packages when it was laying off caregivers.

"Why not stick with the workers and let us work and take care of our patients?" asked La Verne Grant, a respiratory care technician at Highland Hospital in Oakland and a union steward.

The question resonates with us. However, given Cambio's demonstrated value in identifying lapses in the system, we think the firm deserves the benefit of the doubt regarding its ability to hire effective interim and permanent management.

Still, the board of trustees and the Alameda County Board of Supervisors must do a better job than they have in the past in overseeing the expenditures and finances of the centers. They must be vigilant in reviewing the turnaround and keeping an eye on how much money is coming out of the taxpayers' pockets.

The survival and health of our medical centers are vital to our community and desperately needed by our residents. The system must recover from the huge deficit and mismanagement that has endangered public medical care. If Cambio can help the system recover, the firm is worth the money taxpayers are paying. Still, we think the public and our representatives should keep an eye on how much the firm's services are costing us.