Very specific failure

A reader sent in this link from our current county judge’s web site:

It is a reprint of an El Paso, Inc. article titled  Proposed children’s hospital: the pros and cons.

She offers no comment but we have to think that she likes it, otherwise it would be relegated to obscurity and certainly not still on her web site.

From the article:

The Children’s Hospital, Valenti claims, will help address the pediatrician shortage. To staff the hospital, Thomason is dedicating $18 million over the next three years to work with the pediatrics department at the Texas Tech medical school to recruit and retain clinical experts in a number of pediatric specialties.

Because of that relationship with Texas Tech, specialists will be more willing to come to Thomason, Valenti said.

Note that our hospital administrator says that the specialists will be working at the county hospital, not the children’s hospital.  Maybe he had the current situation planned all along.

As for the bond cost the article told us:

If approved, the children’s hospital bonds will increase property taxes on a $200,000 home by $4.76 a month or $57.12 a year in 2009. The tax will gradually become less expensive as the principal is paid off and by 2015 taxes for the hospital on the same home will cost $3.98 a month or $47.76 a month.

It should have said “The tax will gradually become less expensive if the principal is paid”.  Paying on the never never showed us that at the current rate or principal payments it will take 140 years for us to pay off the bonds.

The article made it clear that the children’s hospital had to be  separate from the county hospital:

Even though it will occupy building space owned by the El Paso Hospital District, it must be governed by a separate board of directors than the one that oversees Thomason to qualify as “separately licensed.”

“Even though the children’s hospital is under our umbrella, it will be governed separately. There may be one or two members of the Thomason board of managers who sit on the children’s board but they won’t have controlling interest. There are very specific rules and laws on that for separately licensed children’s hospitals,” Valenti said.

Those very specific rules seem to have been thrown out the window now that their project has failed.

Follow the money

The article pointed out why the hospital had to be a separate entity:

Why is it necessary that the children’s hospital have a separate board of directors, as well as separate administration and staff?

In a word, money.

When the children hospital’s governance becomes distinct from Thomason’s, it qualifies for preferential reimbursement from Medicare and the Texas Medicaid program.

Hospital officials estimate that designation will allow the children’s hospital to bring in an estimated $7.5 million in additional money.

Now we are hearing that our county hospital wants to take over the children’s hospital.  So much for separation.  So much for preferential reimbursement.  So much for the truth.

We deserve better



8 Responses to Very specific failure

  1. taxpayer 13 says:

    Someone should know the answer to this: would it be possible to file a class action suit against (the County, Escobar, Valenti, UMC / Thomason Board, anyone) for (1) allowing UMC to lend money to CH which is not allowed by the charger and / or (2) egregious charges for payroll services (and perhaps other charges) and (3) gross mismanagement of taxpayer funds?


  2. Helen Marshall says:

    This is absolutely devastating..even before the Medicaid rules, etc, changed to disadvantage EPCHC, they KNEW it could not be self-supporting and would only break even with “taxpayer suppport.”

    Laugh or cry???

    “Even with the additional Medicare and Medicaid reimbursements, the children’s hospitals net revenues are not projected to cover operating costs. During the hospital’s first year, for example, revenues will cover only 78 percent of the projected costs, according the Salmon study. That will result in a $5.7 million operating loss. After that, the deficit is projected to close by one percent per year.

    The only thing that saves the hospital from being a perpetual money loser are “non-operating” revenues like distributions of property taxes and other taxpayer allocations that pay for indigent care.

    Of the nearly $45 million Thomason receives each year in property taxes, $3.9 million will be earmarked for operation of the children’s hospital, which also will receive nearly $8 million in other “non-operating” revenues.

    “With those two figures that the hospital district will appropriately allocate to this venture, the children’s hospital will run $4.2 million in the black its first year,” Rivera said.

    So what will keep the cash flow positive is taxpayer support.”


  3. Helen Marshall says:

    This entire set-up was either incredibly stupid, or criminal, or both.


  4. Reality Checker says:

    Setting up EPCH as a sepate entity just to receive preferential reimbursements (more money) proves once again that UMC and the County did the right thing for the wrong reason. UMC wanted to create the appearance of EPCH being governed separately, but all along they intended to control it by keeping EPCH financially obligated to UMC.

    The plan to hire the doctors at UMC and then bill them to or through EPCH is also an example of how UMC intended to profit from EPCH to subsidize UMC’s own operations. Stand here under my umbrella while I pick your pocket.

    From the very start, UMC also planned to lend operating funds to EPCH and charge interest. Valenti proposed that arrangement to county court before EPCH opened. There is nothing in UMC’s charter that allows for it to function as a bank. UMC management, its board, and the county court know this, but apparently let it happen.

    UMC reminds me of pay day loan sharks or car dealers who sell people cars they can’t afford at inflated prices, collect some payments, and then repo them so they can sell them again or drive them themselves.

    I still want Escobar to justify why EPCH’s annual rent exceeds the annual debt service on the portion of the bonds used to build the hospital. I also want to know why UMC was allowed to take bond money and lend it to EPCH for operating funds.

    Court proceedings indicate that UMC has also been charging EPCH $10,000 a month for payroll services. That’s an egregious amount considering the number of people employed at EPCH. Another example of UMC trying to profit off of the relationship … one taxpayer-funded entity trying to profit off of another taxpayer-funded organization.


  5. Jerry Kurtyka says:

    “…the Thomason Board of Managers decided to locate it atop a building yet to be constructed between the main hospital building and the parking lot…The additional four floors, plus equipment, is projected to cost $117.7 million.”
    That’s where our $120MM went, then they “rented” the space back to CH. So, we taxpayers are paying twice: once to build it and again to bail it out by reimbursing UMC for the unpaid “rent.”


  6. Haiduc says:

    The Self induced collapse of the EPCH is a giant step backwards for Children’s healthcare for our city home….


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