Supervisors Decry St. Rose CEO’s Lack Of Transparency Over Financial Status

BOS ROUNDUP
Mar. 14, 2012 | Alameda County Supervisor Keith Carson said the head of struggling St. Rose Hospital lied to the board last year about the financial status of the Hayward facility.

During a marathon five-hour board of supervisors meeting Tuesday afternoon in Oakland, it was also revealed St. Rose CEO Michael Mahoney was the person who first initiated contact with controversial Southern California health care provider, Prime Healthcare, to purchase the hospital if it were to fall into bankruptcy.

The board, though, unanimously approved allocating $2 million in funding to keep the doors open at St. Rose. Officials from the hospital said Tuesday without the infusion of cash, the facility had only weeks to live, but urged for a vastly larger pool of funding in the future just to break even.

Included was also approval for seeking a joint powers agreement between the county, St. Rose and the Washington Township Healthcare District in Fremont, despite continued frustration, the board said, with a lack of transparency emanating from St. Rose over the past nine months.

“Mike lied to us. He sat here and lied to us,” Carson pointedly said of St. Rose’s CEO Michael Mahoney. At a county health committee hearing last year, Carson recounted a specific exchange with Mahoney. “We asked him what the financial status was in the morning. It’s perfect. We’ve got money. We’re good,” said Carson. “That afternoon we got a letter saying we need money. We can’t make payroll.”

Supervisor Wilma Chan was less blunt, but agreed with the sentiment. “The leadership had said everything was going fine, the efficiencies had been realized,” said Chan. “Things were getting better. Things were going to be fine and yet after that we heard several times in private conservations–not in the public–that there were still huge operating deficits and there was a danger of bankruptcy or failure.”

“It has been frustrating to our board because of the lack of transparency and conflicting information that we have received about the financials,” added Chan. During a county health committee hearing on Monday, Chan asked for details on whom had reached out to Prime Healthcare. On Tuesday morning, Alex Briscoe, the director of Alameda County Healthcare Services, revealed it was Mahoney who had called officials at Prime on his own. Later, the chief turnaround officer hired by the county to fix St. Rose, testified the contact was made at the urging of a restructuring law firm affiliated with St. Rose. “I don’t think it was necessary to invite Prime to the table on that,” said Chan. “There are other ways of dealing with [potential bankruptcy]”

Despite a belief the inclusion of Prime Healthcare, an organization currently battling allegations it overcharged Medicare, is nothing more than an attempt by St. Rose to up the ante for procuring additional financing, the interim officials charged with quickly turning around the hospital’s fortune said Tuesday the facility is running on empty.

Mac Nakayama, a consultant tapped by the board of supervisors last January, said “My assessment is with its poor cash position with an inability to pay vendors just to operate normally, it would be very difficult for this hospital to continue beyond the next few weeks.” Tracy Teller, the interim chief financial officer at St. Rose said it would need between $17-$18 million over the next six months for payables, payroll and to make scheduled bond payments. Teller later said the facility is losing between $800,000 and $1 million per month.

“This partnership that we’re going to be putting together, of course, is very dedicated to keeping the hospital open,” said Chan, “but it doesn’t have limitless resources.” She later said the county nor any other known entity can afford to pay nearly $1 million-a-month to maintain St. Rose.

Even then, Nakayama said St. Rose’s future would still be clouded with a annual infusion of cash. “I believe operationally, even if we had everything running perfectly, this hospital would have a tough time breaking even. It will always need an infusion of cash from somewhere.”



Categories: Alameda County Board, Hayward, Keith Carson, Michael Mahoney, St. Rose, Wilma Chan

90 replies

  1. *To the post of: March 17, 2012 9:38 PM

    Regarding: “When the IT department is run by a DINOSAUR, yes she is old as dirt,”

    What REALLY happened to all those charges that were “lost” when the new system went live? If the reimbursement was never recovered due to the computer “glitch” then why wasn't the IT manager held responsible? Because St. Rose administration NEVER holds its managers responsible for anything.

    That old prune (IT manager) needs to MOVE ON!*

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  2. Right on To 2 post back!!!

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  3. Amen two posts up!

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  4. I think Mahoney's crony mentioned in the March 19 posting is in HR. The RN is in ER.

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  5. There are a couple of cony RN's….Foundation and C-Suite.

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  6. Wouldn't be the first time he lied, “We've stopped digging the hole deeper,” Mahoney said to the board last month. “Now its a matter of making sure we fill it in and hit our targets.” In addition, the hospital is monitoring its cash flow on a daily basis, Mahoney said, and does not foresee any dire financial straits, at least, for the next few months.

    This was posted on an article here http://www.ebcitizen.com/2011/12/eden-healthcare-district-says-st-rose.html

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  7. eden is the same marketing, er and foundation.

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  8. Excuse me! I as a St Rose employee have every right to comment on here. Yes this hospital is my main source of income,but why should that stop me from saying SOMETHING! I'm tired of being in the dark as to what the hell is going on around the hospital. Back to the postings ,Who really knows the whole 'glitch' story? I mean really? With that we start calling people 'old prunes'?? c'mon that is not only unprofessional,but also totally immature,I have a pretty good idea who posted that comment and all I have to say is,your not much better than she is,so you might want to take a glance in the mirror yourself. Many of you have been at the hospital longer than need be,so if you aren't making positive contributions,which obviously you aren't,then I recommend shutting your traps and backing the rest of the team.
    Ok so Mahoney lied,the hospital is screwed..now what?
    Two choices are clear..we either shut up and hang in there and see what happens or.. jump ship..but
    Bashing employees and sh*t talking will get us nowhere..

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  9. To all you St. Rose & Eden Bashers who have taken this forum and used it as a personal vendetta against others: Bitter. Party of ____

    Focus on the problem and not the people.

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  10. To the post of:

    “March 22, 2012 12:50 PM Reply

    Excuse me! I as a St Rose employee have every right to comment on here. Back to the postings, Who really knows the whole 'glitch' story? I mean really? With that we start calling people 'old prunes'?? “

    The reason employees are being “bashed” is due to the years of FRUSTRATION at the lack of leadership and the thousands of excuses that have been given to cover for a host of inefficient, ineffective managers. There are a few decent managers at SRH but precious few. SRH directors and managers have not been taken to task in the past as they are now. It has been an oppressive environment and the employees have been without a voice all these years. Now there is a forum and the voices are being heard. Wake Up. It's called Free Speech!

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  11. Post 4:40pm People are the problem fool.

    You are one of the do nothing employees we are talking about.

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  12. Post – March 22, 2012 12:50 PM

    Why not name names? Why not identify who you really are as employees since you wanted for so long to speak? Why hide behind your computers? If you are going to assume who is saying what why not come out and accuse them and not say take a look in the mirror? Shouldn't you all be doing that?

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  13. when they closed SNF I thought things were going to look up that we would have a better cash flow,,,I guess not!

    Now we have a meeting about the pension plans, I guess that will be next to go.

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  14. Does it really matter who says what?
    Unfortunately by saying who you are you will be retaliated against.
    I don't really care who is saying what, it's nice to know there are a lot of people with the same feelings I have had for a very long time.
    Oh and by the way why haven't you identified yourself.

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  15. Anonymous 4:40 pm. OMG you are the queen herself the do nothing 5 hour a week employee.

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  16. Sexual favors party of two you and _____

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  17. Mike Mahoney has always been a problem.He ran St Rose like it was his personal fiefdom. Arbitrary decisions to show his power. He played on peoples fear of losing their job to increase his power. This included random firings that did not make sense and lying about his reasons to a board of directors. He developed a board of directors that rubber stamped his policies and always used his glib vocal abilities to distract from real issues. It would be prudent to check into some of his financial activities, -specifically, attempts to cook the books in order to make himself look successful and continue his $450000 salary.
    From someone who knows

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  18. Closing the snf should have improved the cash flow, but when the manager and pet staff are simply shuffled off to NEW positions, then the purpose is kind of defeated. So post 440: again PEOPLE creating the problems….take your cliche's elsewhere.

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  19. she's been using that cliche for years that's how we know who she is.

    we are so tired of her BS

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  20. I take it that most of you are stellar employees who have helped make both of these hospitals so “successful “. Letter face it, if you're not part of the solution, you're part of the problem. If you took all this hatred-spewing energy and turned it towards trying to make real changes in your workplace, you might actually be useful. Unless you happen to be disgruntled former employees who were let go for your lack of usefness in the first place.

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  21. So many experts here. I suppose you are all stellar employees who have made both hospitals so “successful.” You know what they say, if you are not part of the solution, you're part of the problem. It would be more useful to turn this hateful energy into positive change. Or perhaps many of those lashing out are disgruntled ex-employees who lost their jobs because they were neither useful nor competent.

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  22. Maybe the problem is the same tired management with their same tired 31 year old solutions. Their same tired friends running things. Maybe both hospitals have boards or Sutter who have turned their heads away from the incompent leadership, maybe we're all just tired of it. Maybe we are writing here cause no one has listened for so long. At least here we are heard and have a voice.

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  23. I guess its much easier to rationalize away these postings with comments such as above, assuming they originate from disgruntled and or ex- employees who are useless and incompetent. In doing that, you have joined ranks with the E team, you must be reading from their playbook.

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  24. Too bad these comments aren't from disgruntled, ex- employees. Let's take a roll count: I'm not disgruntled, nor an ex- employee. I read these comments and sadly, they do indeed, speak of truths.

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  25. I am not disgruntled. I am an ex-employee but because of my own doing. I gave many years of service to St Rose,and that hospital is FULL of dedicated, loyal, hard working people who make personal sacrifices just to work there. By personal sacrifices, it means working FOR less, WITH less. That is the St Rose tune, and I don't think anyone who works there(aside from admin and most managers) would say they don't sing that tune- you have to if you want to survive there. I left because I couldn't afford to “sing the tune” anymore. I have been watching with sadness, how the leadership has broken this hospital.

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  26. Nor am I a disgruntled employee I have have work here many many years
    I could have gone elsewhere like many others for better pay better benefits better retirement. It's with a heavy heart that I see the hospital in a downward spiral.
    Hopefully it's not too late.

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  27. Look where this hospital is located. Do you really think that a person with full health care benefits is going to go there? HELL NO! Like a commenter said before, they get the Highland over flow, Which means they are not getting paid to treat most of their patients.This man had to do whatever had to be done to keep his hospital open. If that means lying, then so be it. I give the man credit for trying to provide a service for the community adn to keep his employess working.

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  28. I think the CTO, now interim CEO, acknowledges that this was an inevitable outcome for a hospital such as STR. However, it shouldn't have happened in the manner it did – one moment it's good, then the next, we can barely make payroll???? The downward spiral started long ago, and it seems that egos might have gotten in the way of us seeking handouts before it got this far. Let's not forget the other innocent victims – THE PATIENTS!

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  29. I agree most private insured pts do go elsewhere. We have always been referred to as highland south I wouldn't trade our pts for anything. For the most part they are very appreciative and thank full. We will never have the status as a Washington or Eden. Which is ok we do serve a purpose.
    HOWEVER administration could have sought better funding for the uninsured.
    As I recall didn't Mahoney reject a private insurance co recent contract.

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  30. I think it was Aetna

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  31. It'll be even more difficult to attract pvt pts. When Eden opens their new facility

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  32. You will have plenty of patients when sutter closes the doors on SLH

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  33. St. Rose Hospital is the most economical in the bay area. Mahoney is the lowest paid CEO. The Volunteer Board eats and sleeps ways to keep the mission alive. Does anyone here appreciate their efforts?

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  34. they have failed. You have failed. Move on.

    We need new leadership. what they did was not enough.

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  35. To the people who are posting that Mahoney is the ” lowest paid CEO” …..what is your point? Do you feel sorry for him because he was paid a measly $350,000? Does this measly salary excuse him from running the place into the ground? Of COURSE he's the lowest paid! St. Rose generates the LEAST amount of money! It is ridiculous that this man gets to abandon the ship he sunk with a hefty sum of money and a party to boot. All the kiss-asses will be there boo-hooing it. The phoniness is nauseating. Let's continue getting rid of friends of friends who were hired and do nothing all day. We don't need a “Physician Training Expert” for the crappy computer system and we don't need a “Customer Service” manager writing cutesy memos on what words are “rose words” and what words are “thorn” words. We are not in kindergarten.

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  36. OMG please don't send that idiot over to eden, we've already got that rah rah shit here and it's a big failure.

    It's always the well paid and do nothings that go around preaching that crap. They should be happy, they work a shortened week, get the big salary and bonus.

    I'd be happier if it were me.

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  37. After reading all these posts, all I can say it is so sad. I believe that there are many legitimate comments from highly dedicated people working hard on the front lines. You may see things more clearly than some of those who lead. It was and is this dedication that kept St. Rose going as long as it has and hopefully will continue. That being said, is it possible that many things came together to create the perfect storm.
    1. Large loan
    2. 5th floor expansion opening in a downturned economy.
    3. Bad economy since 2008. Many job losses in the area resulting in patients who would normally be insured no longer contributing to the + side of the equation but joining the under insured/no insurance taxing the hospitals revenues even more.
    4. Lastly, hindsight 20/20. Some decisions could have been made differently and bought the hospital some more time, but the fact remains the patient mix does not bring in the revenue it needs to serve them.
    Solution is a higher percentage of paying patients to off set this. or secure more funding to pay for it. should have seen it coming? Probably, but it looks like a case of the compound effect reaching its tipping point.

    In the end it is still a noble cause and you people who stand on the front line and serve this community are heroes.
    I pray for St, Rose to make it.

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  38. Thank you for the above kind words regarding the “front-liners”. We know who they are, and who they are not. Unfortunately, why are all the decisions made by those who don't have a clue?????
    I pray for St Rose too because we sure have dedicated and committed ourselves to this hospital and the community it serves.

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  39. Did Jeff Gruer write this?? this person is not qualified to do his job. He was in the food business(a bakery)!!

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  40. The truth is Micheal French took most of the money. He did this by authorizing the purchasing of equipment that never materialized but went into his pocket. He also got kickbacks for equimpment that was really purchased. He authorized checks for non-existent employees that ended up in his personal bank account. How about the “rebate”on computer software? Where did that money go?

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