COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager/Clerk of the Board

DATE:

August 31, 2007

BOARD MEETING DATE:

September 11, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

John L. Maltbie, County Manager

SUBJECT:

Amendment to Contract with Health Management Associates

Recommendation

Adopt a Resolution:

1) Waiving the Request for Proposal process and authorizing an Amendment to the Agreement with Health Management Associates, extending the term to June 30, 2008 and increasing the amount by $244,584, from $55,115 to $299,699 to cover costs associated with the development of various options for the delivery of indigent healthcare in the county within a financially viable system of care; and

2) Authorizing the County Manager to execute subsequent amendments and minor modifications not to exceed an aggregate of $25,000 and to make minor changes in the types of services and activities provided under the Agreement.

Vision Alignment

Commitment: Ensure basic health and safety for all, and responsive, effective and collaborative government.

Goal 8 and 22: Help vulnerable people – the aged, disabled, mentally ill, at-risk youth and others—achieve a better quality of life, and county and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.

This Agreement contributes to this goal by providing the County with options to provide healthcare to medically indigent residents within a financially viable system of care.

Background

The County’s General Fund contribution toward Medical Center operations continues to grow at an unsustainable rate. Total budgeted contributions have increased to over $72 million in FY 2007-08 from $54 million two years ago. Over the last three years, efforts have been made by San Mateo Medical Center (SMMC) staff to improve data collection and develop a decision support system that can provide more comprehensive information about utilization and financial status of services at the hospital, clinics and long term care facilities. One-e-App has also been implemented at SMMC facilities to screen applicants and capture data on eligibility for Medi-Cal and other financial assistance. In April 2007, SMMC presented County management with a preliminary internal analysis of financial gain and loss by major service line and payor.

On June 11, 2007, the County entered into Phase 1 of an agreement with Health Management Associates (HMA) for the purpose of reviewing the internal financial analysis and preparing five-year financial projections, assuming no changes to the configuration of services at SMMC. The County Manager and executive management of SMMC, Health Department, and Health Plan of San Mateo selected HMA after proposals were solicited and interviews were conducted with HMA and another consulting firm with healthcare expertise. HMA specializes in public hospitals and the uninsured population, and had recent experiences that were more relevant to the complex issues facing the County.

Discussion

The final report from HMA for Phase 1 will be completed in mid-September. This amendment is for Phase 2 of the project, which will involve the development of options to provide healthcare to the county’s medically indigent residents within a financially viable system of care. HMA will conduct a capacity analysis in conjunction with the analysis being prepared for the Blue Ribbon Task Force on adult healthcare coverage expansion, will interview stakeholders involved in concurrent efforts to provide coverage for uninsured residents, and explore revenue generating use of vacant space at the San Mateo hospital facility. It is recommended that the Request for Proposal process for Phase 2 be waived, given HMA’s expertise in public hospitals, continuity of the project, and the timing needed to consider options as part of the County’s upcoming planning and budget cycle.

HMA complies with the County’s insurance and contract requirements, including equal benefits, non-discrimination and jury service pay.

Fiscal Impact

This amendment to perform Phase 2 of the project increases the contract amount by $244,584, from $55,115 to $299,699, and extends the term to June 30, 2008. Funds have been appropriated in the FY 2007-08 budget from General Fund Reserves.