Butler Admits City Can't Verify Over $250M in CCF Admin Exp

[Brian Essi]

So the effect of the email below is that Butler now admits that the City (including Summer, Madigan and Bullock as LHA trustees/city officials) have no way a verifying the detail and justification for over $250 million in payments made to the Cleveland Clinic since it has been managing Lakewood Hospital.

Huron had to use the following qualifiers in reporting to us about administrative expenses charged by CCF and paid By LHA: "It is our understanding...If so, and assuming...is reportedly determined by...it is reasonable to assume....and the Cleveland Clinic has claimed..." On April 8, 2015, Mayor Summers expressed similar concerns when he told me "our partner is not being very transparent" referring to the same issue of administrative fees.

Why would we consider any future arrangement that would benefit an entity that treats us this way in regard to basic information we have a full right to know?

Why would we trust any City official or elected representative to enter into any agreement if they don't think that this is important?

Here is Butler's email:

Butler, Kevin

Today at 11:33 AM

To'Brian Essi',
Hagan, Mary,
'John Bodine'
CCMadigan, Mary,
Bullock, Tom,
Anderson, David,
Marx, Cynthia,
O'Leary, Sam,
and 5 more...

Mr. Essi:

I’ve provided additional responses below, in red. Huron has indicated that it cannot provide the Cleveland Clinic data referenced in items 1, 2, 4, 6, 9b, 9c and 9d without authorization from the Clinic to release it to the public. Huron has also indicated that notes from its interviews, referenced in 9a, are its own work product and not subject to public release.

Kevin

Kevin M. Butler, Director of Law


From: Butler, Kevin
Sent: Wednesday, September 16, 2015 5:09 PM
To: 'Brian Essi'; Hagan, Mary; John Bodine
Cc: Madigan, Mary; Bullock, Tom; Anderson, David; Marx, Cynthia; O'Leary, Sam; Nowlin, Ryan; Juris, Shawn; Summers, Mike; robyn.smyers@thompsonhine.com; John Green; Paul Colarusso
Subject: RE: Public Materials Provides to Huron

Mr. Essi:

I’ve taken each of your requests in turn.

1. Cleveland Clinic' 2014 Shared Admin Service Allocation (Lakewood Brief) Presentation (undated). Response: The city has no records responsive to this request.

2. Cleveland Clinic's LHA 2014 Admin Services Details and Allocation Methodology Excel File (undated). Response: The city has no records responsive to this request.

3. Subsidium Healthcare's Lakewood Hospital Data Book (undated) Response: I am uncertain whether the attached information is the document referenced, but this document (“Lakewood Hospital Data Book.pdf”) is what’s in the city’s possession. Huron indicates the document I sent yesterday is the document it referenced.

4. Patient day data for the fiscal years ended December 31, 2010 through 2014 and the year-to-date period ended June 30, 2015. Response: The city has no records responsive to this request.

5. Subsidium Healthcare's Lakewood Hospital Association Board of Trustees Strategic Options Evaluation Process, dated January 12, 2015. Response: The city has no records responsive to this request. Huron reports this information is here: http://www.onelakewood.com/pdf/Lakewood%20Hospital/2015_SubsidiumOverview.pdf.

6. Key Performance metrics for Lakewood Hospital for the year-to-date period ended November 30, 2013 and the fiscal yea[r] ended December 31, 2014. Response: The city has no records responsive to this request.

7. "Lakewood City Council Committees of the Whole Considering the Letter of Intent." Response: We are uncertain whether the committee of the whole minutes Mary Hagan sent today are the materials referenced in Huron’s report, but these documents are what are in the city’s possession.

8. Thompson Hine opinions: The Huron Report at page 47 states "According to Thompson Hine LLP, counsel for the City, pursuant to the terms of the Definitive Agreement and the Lease Agreement, the Cleveland Clinic does not have a general obligation to fund operating losses." Please produce all records provided to Huron Consulting by Thompson Hine, the City or any of their representatives regarding this statement or opinion of Thompson Hine. Also please produce any and all records of communication between or among Thompson Hine and Huron Consulting or either of their representatives regarding Lakewood Hospital and/or Thompson Hine's engagement as attorneys for the City. Response: The city will not provide copies of Thompson Hine documents or communications because they are privileged and excepted from the Public Records Act under R.C. 149.43(A)(1)(v).

9. Administrative Services. Please produce:

a. all records of the interviews of representatives of LHA and the Cleveland Clinic referred to on page 54 of the Huron Report. Response: The city has no records responsive to this request.

b. any confidentiality agreement signed by Huron Consulting or any of its representatives regarding "proprietary and confidential documentation provided by Cleveland Clinic regarding specific fees incurred and the allocation thereof" referred to on page 54 of the Huron Report. Response: The city has no records responsive to this request.

c. all "documentation provided by Cleveland Clinic regarding specific fees incurred and the allocation thereof" that was provided to and reviewed by Huron Consulting and referred to on page 54 of the Huron Report. Response: The city has no records responsive to this request.

d. all "correspondence and written documentation" reiterating statements that formed Huron's "understanding that the clinical and administrative service fee are direct costs that are incurred by Cleveland Clinic and allocated to Lakewood Hospital"---referred to on page 54 of the Huron Report. Response: The city has no records responsive to this request.

Huron Consulting Services is not the city’s agent and the scope of its services did not include furnishing all materials upon which it relied for the preparation of its report. However, I have forwarded your requests to Huron to determine which documents it may release within the scope of its services. If we receive any such documents, we will forward them to you.

Best wishes,

Kevin M. Butler, Director of Law
City of Lakewood | Law Department
(216) 529-6034
kevin.butler@lakewoodoh.net[/color]

[Michael Deneen]

I posted the question on the BL Facebook page, and this was Jen Pae's response:

"The City doesn't have record of what is not city records. Nothing ground breaking there. Anyone can look at page 55 of the Huron Report (http://www.onelakewood.com/.../Huron-Consulting-Final...) Regarding Administrative Fee, they said "the shared services allocation to Lakewood Hospital is reportedly determined by pooling costs of various corporate and administrative services that are utilized by all Cleveland Clinic Hospitals, then allocating the total among the facilities on a proportional basis . . . Given the comprehensive services contained within the subject shared services component, it is reasonable to assume that an allocation near the high end of the market range is reasonable. It should be further noted that Cleveland Clinic has claimed that if they did not provide these services, Lakewood Hospital would need to contract for these services. Huron agrees that this approach would likely be more expensive."

[Bridget Conant]

determined by pooling costs of various corporate and administrative services that are utilized by all Cleveland Clinic Hospitals, then allocating the total among the facilities on a proportional basis .

Hmm. If Lakewood is just a community hospital and there was declining patient volume, wouldn't the "proportional share" be declining?

[Brian Essi]

I posted the question on the BL Facebook page, and this was Jen Pae's response:

"The City doesn't have record of what is not city records. Nothing ground breaking there. Anyone can look at page 55 of the Huron Report (http://www.onelakewood.com/.../Huron-Consulting-Final...) Regarding Administrative Fee, they said "the shared services allocation to Lakewood Hospital is reportedly determined by pooling costs of various corporate and administrative services that are utilized by all Cleveland Clinic Hospitals, then allocating the total among the facilities on a proportional basis . . . Given the comprehensive services contained within the subject shared services component, it is reasonable to assume that an allocation near the high end of the market range is reasonable. It should be further noted that Cleveland Clinic has claimed that if they did not provide these services, Lakewood Hospital would need to contract for these services. Huron agrees that this approach would likely be more expensive."

Jenn has proved my point--nobody at the City has a clue about the data because they have never seen it

Huron is just guessing when it wrote: "It is our understanding...If so, and assuming...is reportedly determined by...it is reasonable to assume....and the Cleveland Clinic has claimed..."

Jenn agrees with me!

Just a measly $250 million question.

No worries.

[Brian Essi]

So we have a Mayor and two council persons and LHA who have made decisions without all the critical evidence and still don't have the crutical evidence but want proceed anyway.

I recrntly obtained the 1996 to 2006 financial statements for LHA that had been withheld from the public.

They show a amazing story about how the admin expenses have been used by CCF to commit fraud and potentially criminal conduct that Summers is covering up.

More to follow under upcoming explosive posts.

SummersGate 2011-2015. John Deans are popping up all over the place

[Bridget Conant]

This question of the exorbitant administrative fee needs an answer. Why was there such a huge increase in the most recent years?

None of it makes sense and no one seems to be able to answer what should be a simple question.

Reminds me of the CC "facility fee," a stealth charge they now add on to all patient bills - a charge that no other system charges. It's a fee to walk into one of their buildings.

[cameron karslake]

This question of the exorbitant administrative fee needs an answer. Why was there such a huge increase in the most recent years?

None of it makes sense and no one seems to be able to answer what should be a simple question.

Reminds me of the CC "facility fee," a stealth charge they now add on to all patient bills - a charge that no other system charges. It's a fee to walk into one of their buildings.

It is quite curious that, given Lakewood Hospital's decline orchestrated by the Clinic, that the "administrative fees" skyrocketed as opposed to going down...not to mention that NO ONE is willing to give any sort of answer to that question. So much for the "proportional assessment of such fees amongst Clinic hospitals answer", what BS!

In reality, it's the "facility fee" that is at the heart of this disaster. The Clinic just cannot stand the fact they aren't able to charge that fee at Lakewood Hospital, since they don't own the building. The Clinic's solution to rip the hospital down and replace it with a office building gets their "facility fee" reinstated. Presto chango! All the while, Lakewood citizens lose 100s of millions in property and economic activity while the Clinic invests a small fraction ($34m) to replace all that. What a pathetic deal!

Oh, I forgot, this is all about the changing dynamic of healthcare delivery, not money!

[Jim O'Bryan]

All the while, Lakewood citizens lose 100s of millions in property and economic activity while the Clinic invests a small fraction ($34m) to replace all that. What a pathetic deal!

Oh, I forgot, this is all about the changing dynamic of healthcare delivery, not money!

Cameron, this is not a true statement!

The $32 million the Clinic is investing in the Family Health Center, and the $2 million to buy the property originated as public assets we currently own.

Also the $34 million coming back to the city originated from the same pot of our money.

As stated by someone on LHA and LHF, all money coming back to Lakewood was our money originally.

.

[cameron karslake]

Jim,

That is not what Ms Madigan says. She says that the Clinic is willing to "invest" in the city of Lakewood by building the FHC. Not only that but the Clinic is the ONLY ONE willing to do so. That is what she is focused on. Is that another smoke screen? Gosh, if that is true, the Clinic is really making out like a bandit, more that I ever realized.

I have no reason to doubt what you wrote, but I've not heard that angle before. It's all from the same pot of money? Makes sense. Give me a chance to wrap my head around that since I'm not a $ person.