COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager / Clerk of the Board

 

DATE:

April 16, 2008

BOARD MEETING DATE:

May 20, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

John L. Maltbie, County Manager

SUBJECT:

Third Amendment to Agreement with Health Management Associates

 

RECOMMENDATION:

Adopt a Resolution:

1.

Authorizing a Third Amendment to the Agreement with Health Management Associates, extending the term from August 15 to October 15, 2008, increasing the maximum amount payable thereunder of the Agreement by $88,000, from $510,074 to a total of $598,074, and expanding the scope of work to include consultation on operational changes aimed at achieving optimal staffing of ambulatory and inpatient services at San Mateo Medical Center; 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.

Goal 8: Help vulnerable people – the aged, disabled, mentally ill, at-risk youth, and others – achieve a better quality of life.

 

This Agreement contributes to this commitment and goal by providing the County with assistance in designing operational changes that achieve optimally appropriate staffing at San Mateo Medical Center (SMMC).

 
 

Measure

FY 2007-08
Estimated

FY 2008-09
Projected

Change in General Fund Contribution

-0-

-0-

 

BACKGROUND:

During the past two years, fiscal pressures faced by the County have highlighted the unsustainable growth in General Fund contribution toward the delivery of healthcare services. Total budgeted General Fund contributions to San Mateo Medical Center (SMMC) increased to over $72 million in FY 2007-08, from $54 million two fiscal years prior. In April 2007, SMMC presented County management with a preliminary internal analysis of financial gain and loss by service line.

 

On June 11, 2007, the County entered into an Agreement with Health Management Associates (HMA) for the purpose of reviewing SMMC’s internal financial analysis and preparing five-year financial projections, assuming no changes to the configuration of services at SMMC. This financial analysis project is referred to as “Phase 1.”

 

On September 25, 2007, the County executed an Amendment to its Agreement with HMA to authorize a Phase 2, wherein HMA developed recommended courses of action for the delivery of indigent healthcare within a financially sustainable system of care.

 

On February 5, 2008, your Board approved a Second Amendment to its Agreement with HMA to assist the County with a “Phase 3” that initiated implementation of Phase 2 recommendations, in alignment with the preliminary recommendations of the Blue Ribbon Task Force on Adult Health Care Coverage Expansion, as part of a Health System Redesign Initiative (Redesign) led by the County Manager.

 

DISCUSSION:

Members of the Redesign team, which includes the leadership of: SMMC; the Health Department; the Health Plan of San Mateo; and the County Manager’s Office, have worked closely with HMA during the past three months to develop and execute a first-year implementation plan for the Redesign Initiative. Your Board approved this plan on March 25, 2008. This work has also been integral to the development of the SMMC budget for FY 2008-2009, which your Board will consider during Budget hearings in June of this year.

 

As part of the development of both the Redesign implementation plan and SMMC budget, the Redesign team has identified opportunities for financial improvement that have differing time frames for initiation and impact. HMA’s continued consultation through the completion of final budget changes that your Board will consider in September, including incorporation of the impact of the State budget, will enhance the opportunities for success of the Redesign effort. HMA will also advise on appropriate staffing for the ambulatory and inpatient areas, within the context of best practices in other public settings, industry standards and regulatory requirements.

 

This Amendment and Resolution have been reviewed and approved by County Counsel.

 

FISCAL IMPACT:

This Amendment increases the maximum amount expendable pursuant to the Agreement by $88,000, from $510,074 to $598,074, and extends the term of the Agreement by two months, to October 15, 2008. The contract is structured as a per-hour consulting arrangement to enable the County to manage the intensity of assistance needed. Funds for this Amendment have been included in the Health Department’s FY 2007-08 Adopted Budget and the FY 2008-09 Recommended Budget.