BY JAMES BURGER Californian staff writer email@example.com
Two health care providers, five health management firms, Kern County and a consultant firm engaged in a no-holds-barred verbal brawl Tuesday with a multimillion-dollar prize at stake.
And, after more than five hours of meetings, county supervisors couldn't resolve lingering questions and punted the fight to April 16.
On one side of the debate was Managed Care Systems and its parent company, Dignity Health Bakersfield. On the other was county staff, their consultant the Segal Company and four health management firms.
The prize was a $9 to $14 million contract to manage health insurance services for more than 5,000 county employees, business that the county and Segal recommended be moved from MCS to the four other firms -- Burns Consulting, Clinix, Zenith American and the Bakersfield-based Foundation for Health Care.
Supervisors, stuck in the middle, said they have respect for everyone who was seeking the contract.
But they were less than happy with the way the parties conducted themselves.
"It is sad to me that the way to get what you want is to tear down somebody else," said Supervisor Mike Maggard.
But, when the dust settled, supervisors were also split.
Three supervisors were poised to support staff and transfer control of the county health care system to three outside companies.
Maggard and Supervisor David Couch wanted to support MCS, saying they were not convinced there was enough of a problem to switch vendors.
But their probing questions revealed a potential conflict of interest with another vendor, and all five supervisors said they couldn't resolve their concerns.
They pushed a final decision off for more than a month, extending a process that has become acrimonious and strained.
On Tuesday both sides in the debate accused the other of misleading supervisors, reporting half-truths and outright lies and operating with questionable ethics.
Tom Morrison of the Segal Group, the county's consultant, called for supervisors to dump MCS which he described as ethically compromised.
The county health care plan administrator has to be dedicated to providing the best service possible to the county and its employees, he said.
Because MCS is 50 percent owned by Dignity Health, which owns Mercy Hospital, Mercy Southwest Hospital and Bakersfield Memorial Hospital, Morrison said, "MCS is technically negotiating with its owners for rates."
In the three years since MCS took over the county health care plan, county employees' business has shifted from other hospitals to those in the Dignity system, he said.
He said the contention by MCS that it has saved the county $40 million and that rates haven't gone up more than 1 percent in the past three years is false.
When judged on a per capita basis, Morrison said, increases have been between 5 and 7.9 percent annually.
MCS is the "least experienced, most costly and least independent" bidder, Morrison said.
Zenith, Clinix and Burns all said they could do the work as well or better than MCS.
Supporters of MCS fired back at Segal and the county.
"Did anybody ever say MCS hasn't done a good job," said MCS attorney Richard Monje. "If you have somebody that's doing a good job, why do you make a change? Why do you divide it up between three companies from out of state who say they'll do a good job?"
Bob Severs, president and CEO of GEMCare, which is the parent company of MCS, said reports from Segal and the county are biased and designed to get rid of MCS.
Jon Van Boening, CEO of Memorial Hospital, called Morrison's presentation a "cheap shot" and said there is no unethical relationship between MCS's business decisions and the bottom line of Dignity hospitals. "Nobody at Dignity has any involvement in the day-to-day operations of Managed Care Systems," he said.
But Deputy County Counsel Karen Barnes said that MCS has acknowledged that it has, on occasion, "erroneously transferred" county employee patients from other hospitals to Dignity hospitals.
And, she said, the simple fact that MCS has a financial interest in county employees going to Dignity Hospitals means the company has a fiscal motivation that runs counter to the county's financial interest.
Supervisor Zack Scrivner said he supported the staff's recommendation because the award of the contract to MCS in 2009 and the MCS merger with Dignity "pitted our medical community against itself. It's paramount that we maintain the public trust -- we maintain the belief that there is a level playing field."