This community opinion was contributed by San Benito County resident George Fendler. The opinions expressed do not necessarily represent BenitoLink or other affiliated contributors. BenitoLink invites all community members to share their ideas and opinions. By registering as a BenitoLink user in the top right corner of our home page and agreeing to follow our Terms of Use, you can write counter opinions or share your insights on current issues. Lea este artículo en español aquí.
Measure X is among the most deceiving voter initiatives yet!
Measure X is a solution looking for a problem. It can’t find one.
Here are the facts as I have researched them.
- The hospital is not in financial difficulty—there is no need to sell it.
- They have 93 days of operating funds available.
- They ended the fiscal year ending in June, 2024 with a $15.5 Million surplus and $18.6 Million cash flow.
- Their financial condition ranks them in the top 25% of California hospitals.
- They have been thrown out of US Bankruptcy court twice* because they aren’t insolvent. (Bankruptcy is there to protect insolvent entities from their creditors so that they can reorganize their finances, restructure loans, etc.)
- The healthcare board decided to give a $100,000 / year raise in pay to their CEO. That brings her annual salary to $450,000 / year! She then decided to spend a lot of money on interior design of her office. Oh, part of her contract gives her a $450,000 golden parachute. If she leaves early, that’s what she gets.
- The healthcare board has decided that they should sell everything to Insight Healthcare. Well, not everything, Just the assets. They decided to keep the liabilities.
- The contract with Insight gives the buyer all of the non- real-estate assets immediately. That includes the Accounts Receivable which are substantial.
- The purchase price is based on an appraisal that was done in April, 2022. It excludes the costs associated with the seismic retrofit that is required by the state. Of course it will be adjusted for inflation in 5 years. In five years, Insight will be able to exercise their option to take the buildings.
- Summing it up. The appraisal was $50-60 Million**. I don’t know how much the seismic retrofit will cost. But, I have heard estimates of $10 Million.
- We will get $40-50 Million cash for the sale.
- We will assume $35 Million of pension liabilities.
- As of May 16th we owed $5.5 Million on bonds and a little over $33 Million on Distressed Hospital Loan.
- Adding this up, we will be taking a $25.5 Million loss when we sell our healthcare system.
Now lets look at Insight Healthcare’s track record.
They started about 13 years ago in Flint Michigan when the economy in the “rust belt” was in poor condition. They wanted a facility for their neurosurgery practice in Flint. They bought a 600,000 square foot office building from General Moters for $50,000. That was a brilliant real-estate investment (8¢ per square foot!). They turned the space that they didn’t need into a professional office building.
About 225 miles south-west of Flint, they found Mercy Hospital in Chicago, IL. Mercy Hospital is a 400 bed facility. It was run by The Sisters of Mercy. They were having financial problems with the hospital and sold it to Trinity Healthcare. Trinnity, too was having problems. They were losing around $5 Million / month so they decided that they could shut it down and it would only cost around $10K /month to maintain the vacant buildings. When they made that decision, most of the personnel left. Somehow, they connected up with Insight. They sold the entire facility to Insight for $1. That was another brilliant real-estate investment. Three years later, they were able to reopen the emergency department.
Then there is Keokuk, Iowa. That is actually a rural hospital. Insight bought it shortly after it closed down for economic reasons. I can’t find what the purchase price was. But, after a year and a half, they still haven’t been able to reopen it. We can’t tell how much of a deal that was. But, considering Insight’s real-estate track record, I doubt if they will be losing any sleep over that one.
We need to vote no on M easureX or we will be without any healthcare system in our county. We won’t have any money to build one—unless, of course we raise taxes. That’s not what we want.
Please visit our humble website if you need more details. If you can help, please click the volunteer tab.
Vote NO on Measure X
Editor’s notes:
*Bankruptcy judge denied the district’s filing. The case is under review of appelate court.
**Appraisal was $55-$65.