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The Riehl World: Election Day Rx for Tri-City Hospital

Will Voters Be the Cure?

By Richard Riehl

According to a 2011/2012 San Diego Grand Jury Report, Tri-City Healthcare District Continuing Issues, May 30, 2012, “The Grand Jury believes the coming election to be an excellent opportunity for the electorate to remake the current Tri-City Hospital Board of Directors into a less distracting and more professional body,”

So, how did that go? In the four years since the 2012 election, the “remade” board fired its CEO, hired and fired his replacement, and hired another to take his place.

A series of failed lawsuits cost the hospital over $30 million in settlements, attorneys fees, and lost revenue resulting from bogus allegations related to the purchase of a medical office building that remains vacant to this day on the hospital’s campus.

Yesterday, Tri-City attorneys filed a motion in Superior Court to avoid having to make a payment on the settlement of its most recent failed lawsuit. Chief Financial Officer Ray Rivas explained that the $12.1 million judgment could trigger a default on a line of credit that funds payroll, accounts payable and all other hospital expenses.

Is Tri-City on the brink of bankruptcy?

Two months ago I suggested the hospital start firing attorneys, rather than CEOs, (Tri-City’s Fired CEO Cleared Again of Wrongdoing). But Irwin Schenker, an Oceanside resident with 35 years of experience in healthcare management, gave me an insider’s view of Tri-City’s Board of Directors. Flipping CEOs, it seems, is just the tip of the iceberg.

Schenker served from 2009 to 2013 as a citizen volunteer, appointed to the hospital’s Finance, Operations and Planning Committee. The retired healthcare administrator told me that nothing in his long career had prepared him for the “series of sad circus events that passed for the Tri-City experience.”

In the first Board of Directors meeting he attended, a discussion of how to terminate CEO Larry Anderson, about a year after he’d been hired, topped the agenda. He survived that first attempt, managing to hang on for nearly four more years.

Schenker told me the story of one board member who was so out of control with tirades, insinuations and insults the individual had to be excluded from attending meetings in person. Arrangements had to be made for the disruptive board member to sit in another room, fitted with electronic communications, to allow for limited participation.

The 2010 election brought another individual to the board whose behavior, according to Schenker, was even more bizarre. As well as disrupting meetings, on more than one occasion the new board member took a position on the hospital’s front lawn to display signs warning visitors to go elsewhere for treatment, declaring Tri-City was unsafe for patients.

At one meeting, Schenker recalled, a board member challenged an audience member to a fistfight.

After two board members were replaced because of city residency requirements, the reconstituted board included two individuals who, it became apparent to Schenker, had a “hidden agenda” to fire Larry Anderson.

After Anderson was ousted, Schenker met with a couple of board members to question them about allegations of his dishonesty. They assured him the truth would shortly be made public. That “proof” never materialized.

After Schenker’s four-year committee member term limit expired, he continued to attend board meetings open to the public. Here are some of his observations:

  • Talented personnel have been terminated because of imagined loyalty to Anderson or lack of subservience to the board.
  • “Fear and uncertainty have permeated the staff” because of continual changes in executive leadership.
  • Financial reports are no longer as available to the public at meetings as they had been. Instead, an abbreviated financial report is briefly flashed on a screen. Cost items, such as legal expenses, part of comprehensive financial reports in the past, are no longer included.
  •  Opposing views are dealt with in a “mean-spirited manner,” either by dismissal or, as was the case of one dissenting board member, an intimidating and expensive lawsuit.

San Diego County’s Local Agency Formation Commission, (LAFCO), is a regulatory agency that provides information to guide the development of healthcare districts. In its May 5, 2015 report, LAFCO cited grand jury recommendations to “consider several governance alternatives for Tri-City, including merging the district with the neighboring Palomar Health HD, turning over hospital operations to an outside party, or selling Tri-City Medical Center to another health system.”

On November 8 another four-member majority will be elected from the nine declared candidates. The incumbents: Larry Shallock, Julie Nygaard, Ramona Finnila and RoseMarie Reno were all there during the hospital’s last four years of costly chaos.

Nygaard and Finnila are the most politically well-connected, having served a combined total of 26 years on the Carlsbad City Council.

In 2013 Reno was named Trustee of the Year by Modern Healthcare for her long years of service to Tri-City. Reno’s board colleagues were apparently unimpressed. She was maliciously accused of a conflict of interest in the hospital’s lawsuit related to the purchase of a medical office building, a case which collapsed in court. Reno was cleared of all charges of wrongdoing.

Among the five other candidates are Frank Gould, a retired Superior Court judge; Donna Rencsak, a psychotherapist; Leigh Anne Grass, a registered nurse; Marggie Castellano, a film/TV producer; and Dan Hughes, a business owner.

Combine any three of these five with the steady hand of RoseMarie Reno, and voters could get a new majority, free of the baggage of the last four years, bringing new hope for Tri-City’s future. Given the legal issues bungled by the board, I’m hoping the retired judge will be among them.

California law will not allow a healthcare district to abandon an elected governing board. That means the only way to save Tri-City is at the polls.

Shortly after my wife and I arrived in Carlsbad 20 years ago, a Tri-City surgeon saved Karen’s life. On November 8 we’ll vote to save the hospital.


Richard J. Riehl is a Carlsbad, California resident, retired university administrator, and award-winning columnist for the former daily newspaper, the North County Times.
Richard writes a blog titled The Riehl World
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