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Minutes

Committee Hearing, February 5, 2004

Philadelphia City Council Committee HearingsFeb 5, 2004

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Mr. Schaengold

Yes. REPRESENTATIVE MANDERINO: Why did you do that? I'm just saying, why did you do that? Maybe I should be more specific. Did Tenet make the decision that, "Gee, we ought to attract a good profitable line here and let's invest in this gamma knife and get a physician group in here that's going to run it and bring this business into this hospital"? Was that a Tenet decision?

Mr. Schaengold

Two years ago, the chairman of the neurosurgery department made a 139 02/05/04 - COMMERCE - RESOLUTION 040046 proposal that to enhance the neurosurgery services at Drexel and at MCP we should invest in a gamma knife. And a decision was made by my predecessors that that was a reasonable approach, and they committed a significant amount of money, over $5 million, to acquire and install that service. REPRESENTATIVE MANDERINO: So Tenet was in on the decision to invest $5 million for a new service and the physician group that came along with it and put it at MCP, but they weren't involved in the decisions to move physician groups in orthopedics or anywhere else away from MCP and somewhere else? When it was moving it away from MCP, it was purely a Drexel and physician driven decision; but when it was putting it at MCP, it was a Tenet-driven decision? Is that what you're telling me?

Mr. Schaengold

No. That's not what I said. REPRESENTATIVE MANDERINO: Okay. What am I missing?

Mr. Schaengold

What I said was 140 02/05/04 - COMMERCE - RESOLUTION 040046 that a proposal was presented by the chairman of the neurosurgery department for a new modality. Tenet evaluated that proposal and agreed with that recommendation. And together with Drexel, we tried to develop a neurosurgery center at MCP. REPRESENTATIVE MANDERINO: So if the physician group would have said, "We have this great idea, let's put it at Hahnemann," that could have been an equally valid decision?

Mr. Schaengold

That is correct. REPRESENTATIVE MANDERINO: And you wouldn't have had a different decision from your corporate entity holding these two hospital buildings as to whether or not you would have invested the $5 million in one place or another because it's a physician-driven decision?

Mr. Schaengold

It happened to be a proposal that made sense to Tenet at the time, that it would be an effort, again, as part of our $43 million that we've invested at MCP, again, trying to find ways to change its payer mix so that it can be financially viable. 141 02/05/04 - COMMERCE - RESOLUTION 040046 This was a proposal that was deemed to be reasonable, and it was tried. REPRESENTATIVE MANDERINO: It was reasonable to try it at MCP to improve their payer mix?

Mr. Schaengold

Correct. REPRESENTATIVE MANDERINO: But it was reasonable to move orthopedics away from MCP to deteriorate their payer mix? I'm really not trying to be funny here. I'm trying to understand the decision-making process. And when the decisions -- you know, I'm not trying to be obtuse. It just seems that when it's convenient to say that it was a decision made solely by the physicians and by Drexel, we say that; and when it's convenient to say it was a decision made by Tenet, we say that. And I just can't believe there wasn't some collaboration, because both entities you have a financial stake in. And I guess that's what I'm struggling with, and that's what we're struggling with. And not struggling with it for the purpose of beating you today, but 142 02/05/04 - COMMERCE - RESOLUTION 040046 struggling for the purpose to understand whether MCP really had no other option. I mean, that's why all these questions are happening, because it seems to me that depending on which way you spin the story, there could have been lots of different options or no options. And now we're sitting with one option, which is to scramble in a very short time frame to pick up the pieces that we were left with. And so that's the reason for these seemingly obtuse questions, to try to understand how the pieces fell apart, to have a better understanding of whether they can be put back together. I don't have any more questions, Mr. Chairman.

Councilman Goode

Thank you, Representative. Mr. Leonard, we thank you for the responses to the information requests, although they just arrived today so, of course, we have not had time to fully review them. This book alone, I don't know how pages, but there are 37 different sections. 143 02/05/04 - COMMERCE - RESOLUTION 040046 It's my understanding through separate conversations you had with myself and the Vice Chair, Councilman Nutter, that you will make other representatives from Tenet available to respond to these documents; is that correct?

Mr. Leonard

That is correct. Is there going to be a hearing next Thursday, too, Mr. Chairman?

Councilman Goode

If they will be available next Thursday, then this hearing, when Councilman Nutter is finished with his questioning today, will be recessed until next Thursday at 1:00.

Mr. Leonard

It would be helpful if I could spend some time with Councilman Nutter and you maybe getting the focus of the next line of inquiries so that I bring the right witnesses. Mr. Schaengold, having been here for only a year, can't answer some of the questions. And I do want to get the right witnesses from around the country to respond to your questions. So the sharper the focus can be, the better the witnesses will be. We will bring people in next Thursday to deal 144 02/05/04 - COMMERCE - RESOLUTION 040046 with, I believe, the general area of the acquisition and what happened five years ago. Is that your understanding of the general focus that hasn't been dealt with yet?

Councilman Goode

I guess the question I would throw back to you is, what are our options? Are you saying that only certain people are going to be available and that a whole host of senior management can't make themselves available next Thursday?

Mr. Leonard

No. I'm saying we want to make available the right people from senior management, wherever they be in the United States, to answer the questions. I'm just trying to figure out what the questions might focus on so I can get the right people.

Councilman Goode

We can give you a preliminary answer to that, but until we review the 37 different sections of this document, which we received today rather than on Monday, we cannot give you a full answer to that about what the full scope of our investigation will be next week.

Mr. Leonard

We did not receive the 145 02/05/04 - COMMERCE - RESOLUTION 040046 transcript until last night.

Councilman Goode

Councilman Nutter gave a very detailed request on the record last week. It was not our note-taking that was at fault.

Mr. Leonard

Nor ours, as you can see.

Councilman Goode

I believe Councilman Nutter has some other questions that he wants to ask you before we recess today.

Councilman Nutter

Thank you, Mr. Chairman. I apologize. Mr. Schaengold, there was testimony earlier -- and I should have asked this question probably first. Ms. Robinson testified, and I would like to get an answer to her very serious question. Can you tell us the status of MCP, and more specifically the emergency room on January 24th and the situation that Ms. Robinson laid out with regard to the transport and ultimately the death of her son?

Mr. Schaengold

I don't have any. 146 02/05/04 - COMMERCE - RESOLUTION 040046

Mr. Leonard

I can give you the information that we got by making some phone calls. On January 23rd there was no divert, and on January 24th there was only four hours of divert. The four hours of divert on January 24th were from p.m. to 2 a.m., so 8 there was no divert at 2:42 or 2:45 when the 9 incident occurred. 10

Councilman Nutter

Well, one, I guess, Mr. Leonard, what I would say is -- and I appreciate you getting that information. First, it sounds like the divert may have ended somewhere within an hour of when the incident took place. Second, how do we know that all the appropriate personnel were notified that the divert had been lifted? Third, what information do we have as to why based on, again, our recollection from earlier today of the location of the incident, why would a person been taken whose been shot four times to Temple versus MCP?

Mr. Leonard

I have no idea. I mean, that's a decision made by a driver.

Councilman Nutter

How do we know 147 02/05/04 - COMMERCE - RESOLUTION 040046 that the lifting of the divert information was communicated in a timely fashion to all the personnel who need to know?

Mr. Leonard

I can't answer that question. I can tell you that even if there's a divert on, it's up to the driver to determine whether or not to bring them to the nearest hospital because it's a matter of life and death. He can do that even if there's a divert on. But as to how they communicated the information, I can't answer that

Councilman Nutter

So let me make sure I'm understanding. Your testimony would be that the divert ended at 2:00 a.m., and if the incident took place at 2:15, 2:30, 2:42 a.m., all the necessary personnel would have been notified so that they would be aware the divert was off? But even if they weren't, the EMS personnel -- the second part of what I'm hearing from your testimony, an EMS personnel or individual made a decision at that time to not transport to MCP and to go to a hospital farther away, that's your response?

Mr. Leonard

That's my guess as to 148 02/05/04 - COMMERCE - RESOLUTION 040046 what happened.

Councilman Nutter

So what we should then do is ask the EMS unit to come in and explain to us why they made that decision, because the hospital at that point had done what it was supposed to do?

Mr. Leonard

That's my understanding. I might also tell you that my understanding as to how the divert works, when you put a divert out for a four-hour block, it's that. That's how it's communicated. There will be a divert from 10:00 to 2:00 at MCP.

Councilman Nutter

This is for the emergency room?

Mr. Leonard

Yes. It was put out for a four-hour block, so I don't know who communicated what after that, but it was never, say, it's on divert permanently or it's on divert all night. It's on divert from 10:00 to 2:00.

Councilman Nutter

Well, let me ask this question. I know you are an excellent 149 02/05/04 - COMMERCE - RESOLUTION 040046 lawyer. I'm not aware of any medical expertise that you may have. But if an individual is shot four times, would that generally been considered a level one trauma?

Mr. Leonard

As you say, I'm not an expert on medical things.

Councilman Nutter

Mr. Schaengold, would that be considered a level one trauma?

Mr. Schaengold

I would consider that a level one trauma.

Councilman Nutter

Was the trauma unit open that morning?

Mr. Schaengold

No. The trauma unit has been on suspension at MCP since November 10th.

Councilman Nutter

Why is that?

Mr. Schaengold

When the nurses' strike began, we suspended trauma services and we have not initiated it since.

Councilman Nutter

Weren't trauma services suspended prior to that?

Mr. Schaengold

No. Trauma services were suspended in anticipation of the strike, within 24 hours or 48 hours. 150 02/05/04 - COMMERCE - RESOLUTION 040046

Councilman Nutter

There was discussion about suspending trauma services, though, at MCP earlier that year?

Mr. Schaengold

I believe that prior to my coming on board, there had been discussions about the need to decide on one trauma center within the Tenet system, but I made a decision to maintain both trauma centers.

Councilman Nutter

So let me make sure I'm understanding. The trauma unit was closed as a result of the nurses' strike. The ER was on divert from 10:00 p.m. to 2:00 a.m., you would believe that all necessary personnel would be notified that divert was off. But even if they were not, the personnel on the scene can make a decision to go to MCP anyway?

Mr. Schaengold

Correct.

Councilman Nutter

And so, similar to Mr. Leonard, what we are now left with is trying to investigate why a decision was made to take a person who had been shot four times to a hospital farther away? Is that where we're left? 151 02/05/04 - COMMERCE - RESOLUTION 040046

Mr. Schaengold

Well, I would assume that they would have gone to the nearest trauma one center.

Councilman Nutter

And since you had closed your trauma, they could not go there?

Mr. Schaengold

It has been on suspension since November, that's correct.

Councilman Nutter

Okay. I'm sure we'll be looking a little further into that one. Do you have any information with regard to Mr. Wynder? I believe in his testimony raised the issue of an incident at Abbottsford and Pulaski?

Mr. Schaengold

I don't have any information on that.

Councilman Nutter

If you could get some additional information on that, I'd like to know about it. You can talk to Mr. Wynder. You can check through some records. I'd appreciate it. Let's go back over a couple of other items that were raised earlier. I have to 152 02/05/04 - COMMERCE - RESOLUTION 040046 admit that I was somewhat surprised. I know that you have a number of highly qualified staff and other professionals. We don't know the answer to the question with regard to if the hospital closes for a day, the license ceases or terminates or expires or is suspended and could not be brought back into place? We don't know the answer to that question?

Mr. Schaengold

I don't know the answer to that, no. 13

Councilman Nutter

Well, if you're proposing to close the hospital, if you're proposing to sell the hospital, if you're proposing to give it to the City or to the State, wouldn't you want to know the answer to that question before you close it?

Mr. Schaengold

I believe all those issues are the province of the State. I think they can restart, increase, decrease the number of licensed beds. It's under their purview.

Councilman Nutter

Well, I understand that. And if I had the State in 153 02/05/04 - COMMERCE - RESOLUTION 040046 front of me, I'd ask them about it. But for the moment, it's your hospital. You say that you want to work with us or work with just about anyone. Again, it would seem to me in that context you would want to know as much as possible about all of the options, the pluses and the minuses that go with them, and have some sense of urgency that if this is true -- and I don't know whether it's true or false. I'll take the witness at their word. I've read through your statement. I've listened to everything you've said over the last two weeks. It would seem to me that in an effort to help repair this particular situation, you would want to know as much as possible about all of our regulations, what happens in a laundry list of scenarios of what-ifs. So I would ask you to find out so that the next time we ask the question, we have a definitive answer.

Mr. Schaengold

We will be happy to.

Councilman Nutter

Let's talk about the HAZMAT unit. Is your testimony correct 154 02/05/04 - COMMERCE - RESOLUTION 040046 that this is a unique facility not only in Philadelphia, but on the east coast?

Mr. Schaengold

I believe it's unique in Philadelphia. I don't know about the east coast.

Councilman Nutter

How unique is it in Philadelphia?

Mr. Schaengold

I've been led to understand that it's the only free-standing facility. But I will also share with you that every hospital in Philadelphia has a HAZMAT policy and procedure that deals with the need for decontamination.

Councilman Nutter

Can any of them treat as many people as this unit can at any one point in time?

Mr. Schaengold

I don't know the answer to that.

Councilman Nutter

I would put that in the realm of we'd like to know. And I would think that you'd like to know, especially given the fact that I guess in Washington we've got a poison situation, and earlier today we apparently had -- I don't 155 02/05/04 - COMMERCE - RESOLUTION 040046 know whether it's been confirmed or not -- an anthrax scare. We are living in these kinds of times. And you have a unique facility there. I understand every hospital has to do certain things, but if one facility can treat one or two persons at a time, and I understand this particular facility can treat up to 30 people at a time, that's a little bit of a difference.

Mr. Schaengold

I believe that all hospitals in this community can handle significant numbers of individuals in that area. They don't have an enclosed facility, but they can handle it on their campuses. But I don't know the exact numbers.

Councilman Nutter

Well, I guess my last comment on that is I've been informed by apparently people who know, notwithstanding all of the hospitals having certain particular capabilities, that when the President of the United States is in the City of Philadelphia, if something happens to the President of the United States, he's to be taken to Medical College of Pennsylvania. 156 02/05/04 - COMMERCE - RESOLUTION 040046 (Applause.)

Councilman Nutter

We don't need to talk politics, and I certainly hope nothing ever happens, but if it's good enough for him, I think it's good enough for the rest of us. (Applause.)

Councilman Nutter

Let's talk about the consultant report. There was a lot of discussion last week about beliefs and assumptions and conclusions that had been reached by the company. My recollection, without flipping back through my notes, is the report was received on December 9, 2003. I believe you were then in Dallas on December 10th and 11th, and the decision to close was made on December 12th; is that correct?

Mr. Schaengold

Yes.

Councilman Nutter

Your consultant report on says under general conclusions, "MCP can be returned to fiscal viability if given a new clinical direction in a reasonable period of time in which to correct longstanding, chronic operating problems." 157 02/05/04 - COMMERCE - RESOLUTION 040046 Do you agree or disagree with that conclusion?

Mr. Schaengold

I disagreed with that conclusion.

Councilman Nutter

Then on it talks about the essential conditions to return to fiscal viability. "In order to make the changes required, a stable management team committed to MCP's success must be established. It in turn must heighten the expectations for first line manager performance and accelerate the pace of improvement." Did you take any steps to address that particular bullet point?

Mr. Schaengold

Not on the 9th, no. 18 But that is a requirement for this plan to be successful.

Councilman Nutter

Did you take any on the 10th or on the 11th?

Mr. Schaengold

No. 23

Councilman Nutter

Wasn't there a conclusion in this report that one of the critical components to turning the hospital 158 02/05/04 - COMMERCE - RESOLUTION 040046 around was to return trauma services at MCP?

Mr. Schaengold

It was the consultant's opinion.

Councilman Nutter

You hired a consultant because you respected their opinion?

Mr. Schaengold

We hired a consultant to get an independent opinion

Councilman Nutter

You respected their opinion or you just hired them because they needed the work? Please answer the question.

Mr. Schaengold

I hired them because I respected their opinion.

Councilman Nutter

But in the final analysis, you took none of their advice?

Mr. Schaengold

In the final analysis, we took their input, and combined with our assessment of the situation, we concluded that in months the hospital could 22 not be returned to financial viability and 23 will continue to exhaust our resources. 24

Councilman Nutter

When did you realize the hospital was losing money at the 159 02/05/04 - COMMERCE - RESOLUTION 040046 -- it's been reported on many occasions the $5 million level. Was that a month or a year?

Mr. Schaengold

I'm sorry?

Councilman Nutter

There have been newspaper accounts that seem to indicate that the hospital was losing $5 million a month. Is that true?

Mr. Schaengold

That is correct.

Councilman Nutter

When did that first happen?

Mr. Schaengold

It was accelerating its losses throughout the year, and in the fall it reached $5 million per month, approximately.

Councilman Nutter

What caused the acceleration?

Mr. Schaengold

Well, as I stated earlier, in our opinion it was a deterioration of the payer mix, as well as the increased cost of providing care.

Councilman Nutter

Was there a rapid deterioration in the payer mix?

Mr. Schaengold

It appears to have been gradual, but the financial results were 160 02/05/04 - COMMERCE - RESOLUTION 040046 fairly dramatic.

Councilman Nutter

Over what period of time was there a gradual change in this mix?

Mr. Schaengold

Over the past two years.

Councilman Nutter

What steps did MCP take to turn that around?

Mr. Schaengold

They had a number of reduction in force. They tried to identify ways to reduce expenses. They have tried numerous programs.

Councilman Nutter

Was this all going on at the same time that services were being taken away?

Mr. Schaengold

I'm not sure that the term "services taken away" is accurate. I think service -- physicians moved from MCP to other facilities.

Councilman Nutter

Why?

Mr. Schaengold

I don't know why. Decisions were made by physicians, by their employer, by others that they wanted to practice elsewhere. 161 02/05/04 - COMMERCE - RESOLUTION 040046

Councilman Nutter

And they just, as they say, willy-nilly make these decisions. You wake up and you say, "You know, I just don't like working here anymore. I don't like providing services up here anymore. You know, this old hospital, I'm tired of this place. I'm just going to go somewhere else." Is that how doctors make their location decisions?

Mr. Schaengold

I don't know.

Councilman Nutter

Well, Mr. Schaengold, you are in the business. You must have some idea how doctors make their decision about where they want to practice their profession.

Mr. Schaengold

Physicians would like to practice in locations where they have appropriate patient mix to meet their clinical expertise and they would like to make a reasonable living, and they decide where they want to practice depending on those types of factors. As I said earlier, we don't employ the physician.

Councilman Nutter

What is the difference for a doctor between practicing at 162 02/05/04 - COMMERCE - RESOLUTION 040046 MCP versus practicing at Hahnemann?

Mr. Schaengold

Those are decisions that they have to make.

Councilman Nutter

I'm asking you as a professional. I'm not in that business. What difference does it make where you work?

Mr. Schaengold

It could be their interaction with their colleagues, it could be the research facilities they have, it could be their geography, it could be any one of a number of items. But, sir, again, I don't employ the physicians.

Councilman Nutter

I understand. So your testimony is, "We have the buildings and whoever wants to work here can work here. We have no ability to control what goes on. We don't keep certain their services or practices or clinical operations and they can come and go as they please. We're just like the big landlord with the big building, and some other outside force determines what goes where." How could you run a hospital like that under those terms and conditions? You 163 02/05/04 - COMMERCE - RESOLUTION 040046 cannot be telling me that you have no ability to control what goes on in a hospital.

Mr. Leonard

Councilman, he did not say that. That's not his testimony.

Councilman Nutter

Well, Mr. Leonard, with every respect, I'd like him to tell me what his testimony is.

Mr. Leonard

He's told you that. I'm going to let him tell you one more time. He's not required to speculate.

Councilman Nutter

I don't understand his response. He's a professional. He's in charge of the system. He's in charge of these hospitals. I understand that there's maybe for some of us an inability for us to understand the complicated nature of hospitals and doctors and medical schools. So if you could break it down to us at an elementary level, then I won't have to ask you the same question five times.

Mr. Schaengold

I'll try again. I'll back up a little bit and move to a higher level. In the private sector, the non-academic sector, just about the entire 164 02/05/04 - COMMERCE - RESOLUTION 040046 medical staff is voluntary. They have offices off the campus, on the campus, and they come and go and they decide whether they want to practice at St. Agnes or Graduate or at Chestnut Hill or at Temple. In the academic environment, most of the physicians on those campuses are full-time employees of the university. And the benefits of that includes the fact that they don't have to worry about malpractice insurance because they're employees. They have health benefits. They have a reduced salary, but they have the amenities of working for someone else. At Hahnemann and MCP, it's a mix. You have some full-time faculty that are Drexel physicians; that's their employer. You have some that are associated at MCP with PCOM, and they may or may not be their employees. And then you have a private sector who can come and go as they please. They can practice at Roxborough, they can practice at Hahnemann, they can practice at MCP. So the private sector can move back and forth and they can accept a job at Temple or they can 165 02/05/04 - COMMERCE - RESOLUTION 040046 accept a good deal at Albert Einstein or any other hospital in the region. And the Drexel physicians work with their colleagues, and decisions then are made about where is it the most appropriate place to concentrate one's practice. Now, we have input in that, that we can dialog about that issue, but at the end of the day, the physicians decide where they would prefer to work or where the facilities are more appropriate to their particular skill. So a good example at MCP, the neurosurgeons, the chairman of the neurosurgery chose to be at MCP and made a proposal for an investment to support his practice. Other subspecialties shifted to other locations, whether it was Hahnemann or other hospitals. So in a sense, it may sound bizarre that we have very little to do with it. We have input. We can offer programs to help build clinical programs, but this is a system that depends on where physicians would like to practice. 166 02/05/04 - COMMERCE - RESOLUTION 040046

Councilman Nutter

And the hospital administration can't really do anything to hold on to certain types of services or certain types of offerings that either affect patient mix or which doctors practice where?

Mr. Schaengold

When a physician leaves or a group leaves, there is certainly efforts at MCP to try to recruit replacements for that clinical service. Some physicians left into private practice and some physicians left to the academic arena. So it isn't as though MCP's administration simply allowed that to happen without a response. It's just that they were unable to recruit replacement physicians.

Councilman Nutter

So when we heard testimony earlier about things or services or practices being taken away or shifted to another hospital, what exactly does that mean?

Mr. Schaengold

I don't know what they were referring to. I will assume that if a physician left to go somewhere else, he took his or her practice with him.

Councilman Nutter

Because there 167 02/05/04 - COMMERCE - RESOLUTION 040046 was more work or better services or better conditions somewhere else?

Mr. Schaengold

It could have been all those reasons.

Councilman Nutter

Do you know of any affirmative steps that MCP took over the past couple years to hold on to certain practices or certain physicians or improvements that were made in the facility -- I mean, obviously, it's a very old building -- to make the work condition better?

Mr. Schaengold

Well, a good example, as was mentioned by an earlier testimony, of a surgeon with a particular interest in robotic surgery and minimally invasive surgery wanted to do his work at MCP. As a result, significant improvements were made to the operating room. In fact, on two different occasions the rooms were renovated in order to accommodate his particular interest in minimally invasive surgery. And, again, a significant investment was made at MCP to support his particular specialty. And he came from another system in this town. 168 02/05/04 - COMMERCE - RESOLUTION 040046

Councilman Nutter

Okay. One of my colleagues has a couple questions and I will return. Thank you. Thank you, Mr. Chairman.

Councilwoman Brown

I tried to follow the line of questioning from Representative Katherine Manderino. Help me understand something. MCP essentially was the place of work for the physicians, correct?

Mr. Schaengold

Yes.

Councilwoman Brown

They were hired by Drexel University?

Mr. Schaengold

Some of the physicians at MCP, about half of the medical staff is Drexel employees.

Councilwoman Brown

This is just for my own understanding, because at the end of the day it doesn't move the bottom line. Where was the line of accountability for those doctors, at Drexel or at MCP?

Mr. Schaengold

It's sort of a matrix. Physicians in the hospital are governed by that hospital's medical staff by laws and regulations. 169 02/05/04 - COMMERCE - RESOLUTION 040046

Councilwoman Brown

So that would be MCP?

Mr. Schaengold

So that would be with MCP. But employees of Drexel University also have lines of authority through their system because they are employed by someone. Private physicians would not have that matrix to deal with because they are a private solo practitioner or group practitioner. So an academic physician that is fully employed by a university probably on any given day has several masters in terms of how a hospital operates.

Councilwoman Brown

So when a physician decides that they want to leave where they perform their work, they actually have to give notice to several different entities, as you just described?

Mr. Schaengold

Well, they would have to reach agreement with their employer if they were employees. If it's a private physician, he or she does not have to do anything other than simply stop working or stop admitting to a particular hospital. And 170 02/05/04 - COMMERCE - RESOLUTION 040046 in this community, I will tell you on any given day there are physicians moving from one system to another, from one hospital to another. This is a never-ending process.

Councilwoman Brown

And along with MCP taking on responsibility to ensure that the patients we talked about last week get moved with appropriate care, will the same level of consideration be given doctors, or is it incumbent upon doctors to find their next place of work? The public we're talking about, not the private.

Mr. Schaengold

We're going to have to work with Drexel and with those physicians to find other places for them to do their work. Those who are in private practice probably already have privileges at other institutions.

Councilwoman Brown

Thank you very much again. Thank you, Mr. Chairman.

Councilman Nutter

Just a couple last questions. What happens if the court's January 171 02/05/04 - COMMERCE - RESOLUTION 040046 8th, 2004 stay is not lifted? What are you going to do?

Mr. Schaengold

We are still dependent on the number of staff that we have. And if the courts intervene, which we hope they would not, we will obey by the court's order.

Councilman Nutter

What exactly does that mean?

Mr. Schaengold

It won't close and we'll continue to operate in a diminished capacity.

Councilman Nutter

And from your perspective, are you in compliance with the order as it relates to equipment and personnel and any items that may have been removed prior to December 30th, 2003, having been returned to MCP?

Mr. Schaengold

This matter has been dealt at the court level. We have complied with all aspects of our agreement with the court.

Councilman Nutter

Well, I appreciate the answer or the response. I 172 02/05/04 - COMMERCE - RESOLUTION 040046 mean, it's kind of like a yes or no question. Have you returned everything to the hospital, equipment, personnel, and all other matters in accordance with the court order that were in place on December 30th, 2003, yes or no?

Mr. Schaengold

Your statement has an allegation that we removed equipment, which we denied that that ever happened. And we have complied with the court's order and have so informed the court of that.

Councilman Nutter

Well, I didn't make an allegation. But I'll rephrase it this way. Is it your testimony that every person and every piece of equipment and all other services that were available on December 30th, 2003, are now in place at the hospital today at 4:30 in the afternoon on February 5th, 2004?

Mr. Schaengold

My testimony is that we are in compliance with the agreement we have reached with the court.

Councilman Nutter

Okay. Mr. Leonard, you asked us earlier with regard to some of the information that 173 02/05/04 - COMMERCE - RESOLUTION 040046 you sent up by way of the binders. I want to make reference to one of the items. Tab 30, in what I think is the larger binder, that's the only binder with tabs. When I asked last week -- and I believe other Council Members or Representatives from the General Assembly asked for financials. What I appear to have is one sheet for each year. Now, I've seen a few financials in my time. This is a fairly large operation. It cannot be possible that we're getting all the information that we requested if you give me one sheet of paper with the financials.

Mr. Leonard

Councilman, my understanding is that this is the financial information given to the Governing Board at the hospital. As you're well aware, since MCP is part of a public entity that operates over a hundred hospitals, the consolidated statements are much different. There's no 22 independent consolidated statement that is prepared to put out for just that facility. The numbers from each facility roll into the major consolidated statements that are 174 02/05/04 - COMMERCE - RESOLUTION 040046 generated for Tenet Healthcare. And there's detail on these, but this is the detail that goes into the report on all hundred hospitals -- or 70, whatever it happens to be, at the time the report is compiled.

Councilman Nutter

Well, let me ask this question. Is there a Chief Financial Officer at the hospital?

Mr. Schaengold

Yes.

Councilman Nutter

What's the person's name?

Mr. Schaengold

It's an interim individual. Phil Norris.

Councilman Nutter

How long has he been interim?

Mr. Schaengold

About 90 days.

Councilman Nutter

Who was the previous person?

Mr. Schaengold

Chigger Binam (ph).

Councilman Nutter

How long had he been at the hospital?

Mr. Schaengold

She. And I don't know.

Councilman Nutter

What's the 175 02/05/04 - COMMERCE - RESOLUTION 040046 salary of the Chief Financial Officer?

Mr. Schaengold

Of that individual?

Councilman Nutter

Either.

Mr. Schaengold

I don't know what their salary is.

Councilman Nutter

Does anyone on your team?

Mr. Schaengold

What relevancy does that have? I'm confused.

Mr. Leonard

We'll be glad to get the salary. I don't think we want to make it public. We'll be glad to provide that information. I'm not sure that we want to publicly provide that information. We'll provide it to the Committee.

Councilman Nutter

I'm not applying for the job. You can give me a range. I know there are five or six hospitals. Chief Financial Officer is a fairly high job, right?

Mr. Schaengold

Yes.

Councilman Nutter

So it's not out of the realm of possibility that as the Regional Vice President that you would actually know what a Chief Financial Officer 176 02/05/04 - COMMERCE - RESOLUTION 040046 makes at one of the hospitals.

Mr. Schaengold

I know the range of payment. Each hospital is a different size.

Councilman Nutter

Tell me the range.

Mr. Schaengold

The range could be from $120,000 to $200,000.

Councilman Nutter

So you're telling me that you pay a person $120,000 to $200,000 and they produce one sheet of paper in terms of your financials? Is that what we're talking about?

Mr. Schaengold

No. 15

Councilman Nutter

I'm assuming the Chief Financial Officer produces a volume of papers and documents to turn over to the CEO as the management team tries to figure out what's going on with the hospital, right?

Mr. Schaengold

Correct.

Councilman Nutter

Okay. So when I made the request last week for the five years of financials, I'd like a full financial report on the hospital, each year for the last five years. That was the request. So there 177 02/05/04 - COMMERCE - RESOLUTION 040046 must be more information than the one sheet of paper I have for each year, correct?

Mr. Schaengold

Yes. This is the information we share with our board. The other information --

Councilman Nutter

I didn't ask for the information as a member of the Governing Board. I asked for the information as Member of City Council participating in a duly authorized hearing under the leadership of our Chair, Councilman Goode. And I think, Mr. Schaengold, you full well knew what I would be asking for as a Member of City Council asking for financials for the hospital that is proposed to closed. We don't need to go back to where we were last week. I'm asking for a full financial report for each year for MCP for the last five years. How long will it take you to get it to me?

Mr. Leonard

Councilman, let's get clarification here. We shouldn't be playing games. This report gives you --

Councilman Nutter

It's a little late in the day to play games. 178 02/05/04 - COMMERCE - RESOLUTION 040046

Mr. Leonard

This report tells you the admissions, the length of the stay, the average daily census, the number of visits at the ER, outpatient visits. It gives you net revenue. It gives you operating expenses. It gives you the EBIDA (ph). It gives you the appreciation and amortization. It gives you operating income. It gives you interest expense. It gives you pre-tax income, income tax, and net income. They are financial statements that give you a snapshot of the operation of the hospital. What financial statements beyond that information do you want?

Councilman Nutter

I want the financial information that the Chief Financial Officer would provide to the CEO to give a complete picture, not a snapshot, of what's been going on at the hospital for the past five years. (Applause.)

Councilman Nutter

And I am sure that when Mr. Schaengold was in Dallas on December 10th, 11th, and 12th, I would have to 179 02/05/04 - COMMERCE - RESOLUTION 040046 believe that whether it's Mr. Jennings or Mr. Fetter or anyone in between, they had more than a sheet of paper to make a decision to close a 153-year-old hospital. I just have to believe that. (Applause.)

Councilman Nutter

And I don't think that you can hand out that document at a board meeting and any member of the Board of Directors of Tenet Corporation would accept that as a part of a financial document. So, no, I do not want to play games. You have asked for us to hold certain information. I think we've agreed. We're all adults here. Let's respect each other. I asked what I asked for. I would like to have it as soon as possible. When can I have the information.

Mr. Leonard

We'll see what other financial information we can get together for you.

Councilman Nutter

When do you think you'll have it?

Mr. Leonard

Let's say we'll shoot 180 02/05/04 - COMMERCE - RESOLUTION 040046 for Monday.

Councilman Nutter

I appreciate it. Mr. Chairman, given the hour and the volume of the request, I would be more than willing to relinquish at this moment, but I'd like to have the opportunity to bring the individuals back for further questioning. We've received two binders of information. We have other outstanding requests that Mr. Leonard has indicated by going over transcripts of last week's testimony we should anticipate receiving, and now hopefully we'll get a complete financial picture of the hospital. So with your indulgence, I'd like to have the opportunity for further questioning at a time convenient to you and the Committee next week.

Councilman Goode

Mr. Leonard, are you prepared to work with Councilman Nutter on the type of witnesses he will require for next Thursday?

Councilman Goode

Do you have any need for the two binders you have there beyond 181 02/05/04 - COMMERCE - RESOLUTION 040046 this hearing?

Mr. Leonard

They were our copies of the binders.

Councilman Goode

For the purposes of this hearing. Do you have any need for them beyond this hearing?

Mr. Leonard

We have to have a record of what we gave you.

Councilman Goode

You don't have a record of what you gave us?

Mr. Leonard

We made two copies. We gave you one and we kept one.

Councilman Goode

I can give you a copy of the table of contents if you want.

Mr. Leonard

Well, If you need more copies, you can make them.

Councilman Goode

So you're providing one set in response to information requests to nine Members of Council on this Committee, several State Representatives, State Senators, a United States Congressman and a United States Senator? Are you telling us that we should work from one copy or just make the copies? 182 02/05/04 - COMMERCE - RESOLUTION 040046