The Latest Timeline of the El Paso Children’s Hospital and UMC Debacle

byrd-escobar-childrnsI thought it would be important to keep you updated on the UMC-El Paso Children’s debacle by sharing with you a timeline of the events that I have documented so far. One of the tools that politicians use to thwart community activism is to use as much time as possible and to delay information release in order to keep the taxpayers at bay. Case in point is the ongoing children’s hospital debacle that came into the community consciousness almost eight months ago. The solution was right around corner the community was promised. Eight months later, all we know is that the El Paso Children’s Hospital finances are still veiled in secrecy although it uses taxpayer monies to operate on. The following is the time line of events.

April 4, 2014
The community learns that the El Paso Children’s Hospital has been having serious financial problems for about the last two years. It opened on February 14, 2012. The children’s hospital blames changes in Medicaid reimbursements and low patient volumes for its financial woes. Ron Acton, former UMC Board Chair, is appointed by Veronica Escobar to head a Strategic Planning Committee to assess the El Paso Children’s Hospital finances.

April 24, 2014
El Paso Children’s Hospital Interim CEO Ray Dziesinski acknowledges that the children’s hospital owes UMC and has losses of about $10 million.

April 29, 2014
UMC President and CEO, Jim Valenti, reports to commissioner’s court that the children’s hospital owes UMC more than the $59 million that had been reported.

May 2, 2014
Valenti’s open weekly letter acknowledges that El Paso Children’s Hospital has ceased making payments to UMC required under multiple agreements between the two entities.

May 23, 2014
Valenti’s open weekly letter states that UMC is anticipating posting a deficit because of the children’s hospital inability to make payments and because the Texas Health and Human Services Commission “owes UMC $42 million.” Valenti writes that El Paso Children’s Hospital owes UMC $68 million.

May 25, 2014
Sam Legate, Chairman of the Board of the El Paso Children’s Hospital alleges that UMC has been “routinely overcharging Children’s Hospital by as much as 100 percent.” UMC reports that the children’s hospital now owes as much as $68 million.

Sometime in June
Former Ray Caballero assistant and Veronica Escobar’s close friend, Susie Byrd is appointed the official spokesperson for El Paso Children’s Hospital. No details about the terms of her appointment have been released.

June 8, 2014
Sam Legate hints through the news media that the El Paso Children’s Hospital needs to become a “community-based” hospital. Hint, taxpayer funded.

June 10, 2014
The strategic planning committee headed by Ron Acton suspends further meetings after it could not come to a consensus. Only three meetings were held before the committee suspended further meetings.

June 17, 2014
UMC threatens, in a letter to the El Paso Children’s Hospital, that UMC “may cease services” to the children’s hospital. The letter states that the children’s hospital now owes UMC $71 million.

UMC, in a confidential proposal indicated that it wants “a strategic partner” to assume the operations of the El Paso Children’s Hospital. As part of the terms of the proposed agreement, UMC stated that it “could take control” of the children’s hospital if the hospital was not able to meet its financial responsibilities.

Both UMC and children’s hospital announce that this plan is no longer the plan they are working with. UMC characterizes it as a “starting point.” Susie Byrd states, “they are beyond that” now. Note: remember these statements as you get to the latest developments in December.

June 20, 2014
The El Paso Children’s Hospital announced a sustainability plan and invoked an arbitration clause imposing a cone of silence for 60 days. The cone of silence precludes public announcements about the negotiations. The sustainability plan called for the UMC-Children’s Hospital agreements to be renegotiated to “reflect actual costs,” renegotiate the $14 million annual leases payments to UMC and renegotiate the other agreements to reflect the changes in government reimbursements for medical services.

The children’s hospital also issued a Global Financial Action Plan. The plan’s goals are to reduce overhead, improve revenues, seek enhanced uninsured care reimbursements and seek external financing for the children’s hospital. Ray Dziesinski also writes that the actual debt owed by the children’s hospital to UMC is $7.5 million. Dziesinski also stated in a joint press conference with UMC that the children’s hospital has revenues of $70 million.

It is revealed that UMC filed a UCC filing against the children’s hospital.

June 25, 2014
A UMC-El Paso Children’s Hospital press release asks the news media and the community to be “patient” as they work through the issues.

July 25, 2014
In his open letter, President and CEO of UMC, Jim Valenti announced that 56 employees were laid off. Valenti also announced a “series of cost cutting measures.” UMC also eliminated 39 vacant positions.

July 28, 2014
President and CEO Jim Valenti announces that UMC will seek a 7.9% tax increase allowing it to collect about $5 million in additional revenues.

July 31, 2104
UMC announces that it will not be seeking a property tax increase after all.

August 6, 2014
The UMC board meets in executive session to address UMC’s budget and possibly tax increase. It ends the meeting without taking any action.

August 7, 2014
In a meeting between UMC and the El Paso County Commissioners, it was disclosed that building the primary care clinics that county commissioners approved in 2013 by authorizing $152 million in bonds would be delayed by nine months. Additionally, the Northeast freestanding emergency room was cancelled and the square footage of the clinics were reduced. Keep in mind that bonds for $152 million have already been approved by the county commissioners. Were the bonds issued, if so how is the money being used?

August 12, 2014
The UMC board approves the 2015 budget. The budget eliminated 100 positions, froze employee merit raises, increased employee benefit costs and implemented five furlough days for employees.

August 15, 2014
Chief Executive Officer Ray Dziesinski resigned his position at the children’s hospital.

August 25, 2014
Fitch downgrades UMC’s rating from AA to AA- and revised the outlook from stable to negative.

September 15, 2014
The county commissioners approve UMC’s $527 million budget and allow it to open a $20 million line of credit to be paid for by future revenues.

October 6, 2014
Jim Sexton begins his appointment as the El Paso Children’s Hospital Interim Chief Executive Officer.

November 20, 2014
It is publicly revealed that the UMC Board authorized a bonus of $120,000 to Jim Valenti. Valenti also authorized another $180,000 in bonuses to other executives. Remember that UMC’s new budget adopted earlier forces employees to take five furlough days and force 100 positions.

November 26, 2014
UMC President and CEO Jim Valenti states publicly that UMC should take over the El Paso Children’s Hospital and operate it as an “umbrella non-profit” in order to save it. (See the confidential proposal on June 17, 2014) Vince Perez states that Jim Valenti should be fired.

December 5, 2014
Veronica Escobar issues a letter to William Hanson, Chair and Laura Ponce, Vice Chair of the El Paso UMC’s board asking for their resignations.

December 6, 2014
William Hanson responds in a letter to Veronica Escobar that his answer to her request for his resignation “is a flat out, loud and clear: No.” Hanson adds “I will say this, Judge Escobar, your kind of behind the scenes political intrigue and intimidation have done more to harm UMC, more to harm the Cildren’s/UMC relationship and more to harm our relationship and the quality of trust with the court than any other single factor.” Hanson further adds, “I think the average citizen is frankly fed up with political malarkey. We need and want politicians who exercise genuine leadership, who use their intelligence and oratory skills in a positive way, who educate and inform rather than insinuate and manipulate, and who move the process forward and build rather than destroy. We need leaders who lead from a positive stance. We don’t need or deserve politicians who operate in the back, tweeting incessantly and sending inflammatory emails, all the while acting with the direct or indirect intent to manipulate and force events to their advantage.”

December 9, 2014
I ask Susie Byrd to provide me a copy of her public relations contract under the Texas Public Information Act.

December 11, 2014
An official with the El Paso Children’s Hospital denies my request for a copy of the Byrd contract.

December 12, 2014
The UMC board met to discuss a possible disciplinary action against UMC President and CEO Jim Valenti for undisclosed actions. No action was taken by the board although they indicated that they would be meeting with Valenti to draw a plan of action to deal with communication and community relations.

I sent a letter to County Attorney Jo Ann Bernal formally asking her to compel the El Paso Children’s Hospital to release the financial details of Susie Byrd’s public relations contract under the Texas Public Information Act.

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