The 1985 transfer of Washoe Med remains a travesty

The Washoe Med transfer from a public to a private operation is the single biggest travesty to happen to the people of this community over the past decade.

I will always believe that, and what made it worse is that the people hurt the most by the resulting rise in health care costs were the sick and the elderly who most need those costs contained.

I believe Washoe County let the people of this community down back in 1985. At the very least, when the hospital was given away for $12 million ($60 million to $80 million below fair market value and with $9 million left in cash reserves), it was incumbent upon the county commissioners and the staff to get something of value in return for the taxpayers.

What was promised in the public records was a hospital that would create "for profit" subsidiaries, something a county hospital couldn’t do, and turn those profits into cost-saving measures for the patients who utilized the hospital.

Further, Washoe Health System claims the county would never again have to worry about indigent care because, with those profits, they would take care of them as if it were still a county hospital.

Today, they sing a different tune. Despite all the promises made to the Nevada Legislature and the public, the county and its legal staff did not include these as requirements in the written contract.

It was a shameful omission that has cost every member of this community who has used, or ever will use, WHS.

At the very least, I had hoped that the hospital would be obligated to take its $18 million of profit from last year's operation or its $14 million from the sale of Sierra Nevada Labs and use it lower to health care costs.

However, the grand jury did recommend the WHS try to "deliver on its promise…to include positive and definitive steps to directly reduce patient health care costs."

If WHS were truly a "community owned asset" as it is supposed to be, there is no doubt that the people of this community would demand that these excess millions be put into cost savings rather than into capital improvements for Washoe Professional Centers as was done.

This matter has haunted my public and private life since 1988. It was a key factor in putting me at odds with the rest of the Board of County Commissioners during my time in office. I intend to put the matter to rest with these final comments.

The grand jury made 14 recommendations to prevent this kind of travesty from ever happening again:

  • The 1997 Legislature to restore the "appraised value" formula for evaluating the sale of public assets.
  • Nevada's (University and Community College System) Board of Regents have doctors report their financial interests in other health care services.
  • The attorney general monitor the hospital as a "community owned asset."
  • More candid advance public disclosure of the facts of "insider" transactions.
  • More diversification on the various boards to eliminate the insider clique.
  • County commissioners not vote on matters where they have financial ties (Such a breakthrough revelation!)

The 1989 Reno Gazette-Journal editorial said it best: "Washoe Med: this community has been snookered!"

Millions of dollars have been made and insiders have profited, but the people who use the hospital lost.

The only value of the grand jury report ($2 copy available at Office Depot), is for those who carry the public trust to learn from the experience and begin now to change those things the can be changed.

Rene Reid Yarnell is a former Washoe County Commissioner.

This guest editorial appeared in the Reno Gazette-Journal on 10-28-1995.

Reno Gazette-Journal Editorial

October 1, 1989

Has community been snookered at Washoe Med?

Do you ever get the feeling that you've been taken – snookered, bamboozled, conned – but you're not quite sure how?

You can't quite put your finger on what happened. You can't prove anything. But deep down where the instincts prowl, you say to yourself : You've been had.

That's the feeling that wells up when looked at Washoe Medical Center's new corporate empire. You remember Washoe Med, don't you? The friendly county hospital down the street? Sure you do.

And surely you remember, a few years back, how hospital officials told us Washoe Med couldn't survive in modern times unless it branched out. It would go broke because of expensive technology, decreasing Medicare payments and the increasing number of patients who get treated outside the hospital rather than inside.

To survive, it must join hands with a whole bunch of other medical enterprises which would subsidize the hospital and keep it here, always. But to achieve this noble end, Washoe Med would have to become a private institution.

So in 1985, the county commissioners sold the 123-year-old public hospital to a private, not-for-profit company. And now, four years into the modern era, what do we see?

We see that Washoe Med is part of a corporate structure called Washoe Health System. We see Washoe Health System build a $28 million professional office building. We see it acquire a number of financially unstable rural hospitals. We see it align itself with the Washoe Pregnancy Center, the Washoe Medical Foundation, the Hospital Health Plan and a variety of other operations.

And – guess what? – to keep this empire going, Washoe Med is funneling millions of dollars into the holding company: nearly $3 million in 1986, $8 million in 1987 and $11 million in 1988.

In other words, it sure does look as if the hospital that couldn't make enough money to survive without becoming and empire is now supporting that empire.

And how does it support that empire? Out of drastically increased bills to patients – bills that have increased nearly 80 percent in four years, compared to an already horrendous 50 percent rise nationwide.

In fact, Washoe Med's rates now are as high or higher than those of the scandalously expensive private hospitals in southern Nevada.



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