Medical center nearing crisis, grand jury says
Scathing report blames 'poor management and lack of oversight'
By Rebecca Vesely and Michelle Maitre, STAFF WRITERS, Oakland Tribune
Wednesday, July 07, 2004

Despite recent improvements in patient care, the Alameda County Medical Center's management and financials are in shambles and heading toward a crisis, the Alameda County civil grand jury concluded in a report released Tuesday.

"Many of the problems at the medical center are due to poor management and lack of oversight by the (medical center) Board of Trustees and the Board of Supervisors," the grand jury wrote, offering a scathing, 10-page assessment of the medical center, which includes Highland Hospital in Oakland and John George Psychiatric Pavilon in San Leandro.

Each year, the civil grand jury -- a 19-member body of citizens nominated by Superior Court judges -- investigates and reports on governmental issues in Alameda County.

This year's report highlighted programs in health, education, justice and government. But the grand jury reserved its harshest comments for the medical center -- placing the blame for a $62 million deficit and well-documented shortcomings squarely on the shoulders of elected and appointed officials and the center's management team.

Among the inefficiencies listed are a revolving door in management, with 10 CEOs in the past decade; loss of revenue by funneling paying patients to private hospitals; archaic billing and records; and lack of staff training.

Citing an example of buying a new mechanical pencil when a clerk runs out of lead instead of simply adding replacement lead, the grand jury found waste throughout the medical center.

But the grand jury did not advocate changing the medical center's controversial administrative structure -- the only one of its kind in the state -- where appointed trustees run day-to-day operations and the supervisors stay largely in the background.

Supervisor Gail Steele said the arrangement works, but the two governing bodies should work on communicating better.

"With all the rest the (Board of Supervisors) has to do, which is enormous, it's better to have other people doing the day-to-day stuff," Steele said. "But if there is any crisis, we should come up with an agreed-on plan on how we should work together. I don't think we've worked that out yet."

The panel recommended the Board of Trustees keep tight reins on Cambio Health Solutions, the turnaround firm it hired on a $3.2 million, 18-month contract in February.

Jeff Raleigh, spokesman for the medical center, commended the grand jury and said its recommendations are in line with the Board of Trustees' policies and intentions to make the medical center "an efficient and compassionate health care organization."

The situation is urgent because voters approved a half-cent sales tax in March to underwrite the medical center with about $68 million a year. The tax kicked in Thursday.

"If reform does not take place and if changes are not made in the way the medical center does business, this new source of revenue will be squandered and conditions will rapidly deteriorate into a far worse crisis," the grand jury concluded.

The grand jury's report also delved into the financial crisis plaguing several Alameda County school districts, including Emeryville, Oakland, Albany, Berkeley and, most recently, Hayward and Livermore. This is the fourth year in a row the grand jury has written about fiscal problems in East Bay schools.

But while past grand juries have been critical of the Alameda County Office of Education's fiscal oversight of the districts, this year's conclusions were less so.

"Once disaster strikes (or is brought to their attention), the ACOE takes decisive action," the report said, specifically referring to administrative intervention in Oakland and Hayward. "However, ACOE fiscal oversight does little to prevent disasters from occurring in the first place, even when districts have long histories of financial difficulty."

While ACOE officials have argued they have little authority to intervene earlier, the grand jury urged county education officials to question districts more thoroughly about their financial stability and to hire more fiscal oversight staff if necessary.

The report also called on the ACOE to band together with other county offices to "seek greater authority from the state" if officials feel they can't stop deficit spending before it happens.

The grand jury also:

Investigated the use of electronic voting machines in Alameda County during the March election. The report said only four of 4,000 machines failed during the election, but said 186 precincts experienced problems with encoded voter cards. The grand jury noted that the use of electronic voting has been reviewed at the state level, but nonetheless recommends more training for county poll workers, greater security of the electronic voting machines and urges officials to use only certified equipment.

County Registrar of Voters Brad Clark said many of the grand jury's concerns have already been addressed.

Said the sheriff's Eden Township Substation and the communications center, both in San Leandro, and the coroner's bureau in Oakland, are overcrowded and dilapidated and "in serious need of replacement as soon as possible."

Sheriff Charles Plummer said county officials are looking at a plan that would house all three departments in one facility. The building, with cost estimates ranging from $80 million to $120 million, would be located at the current site of the Fairmont Animal Shelter, Plummer said.

Urged both the county Board of Supervisors and the county Office of Education to investigate ways to broadcast their meetings on public-access television.

Steele said she supports the idea, but cost has been an issue.

"It's good to televise the meetings," she said. "We meet in the middle of the day and people can't come, so nobody has a clue what we're doing."

Staff writer Jill Tucker contributed to this report.