Critical (4 page)

“Absolutely,” Cynthia said. “And we might consider the same for patients as a prelude to admission. Both Holland and Finland had a particularly bad problem with MRSA, and the way that they brought their problem under control was by treating both staff and patients: anyone who tested positive as a carrier. I'm beginning to wonder if we might have to do the same thing. Yet my real concern is that the MRSA is occurring at all three of our hospitals. What does that say? It says that if a carrier is responsible, then that carrier must routinely visit all three hospitals. Consequently, I have as of today ordered the testing and treating of all employees from even here at the home office who regularly visit all three hospitals, whether they have actual patient contact or not.”

“Anything else?” Angela asked.

“We have mandated aggressive hand-washing after each patient contact,” Cynthia said, “particularly with the medical staff and nursing personnel. We've also instituted strict isolation for all MRSA patients, and more frequent changing of medical staff clothing, such as white coats and scrub outfits. We also require more alcohol cleaning after each use of routine equipment, like blood pressure cuffs. We've even cultured all the condensate pans of all the HVAC air handlers in all three hospitals. All have tested negative for pathogens, especially the strain of staph that has been plaguing us. In short, we are doing everything possible.”

“Then why haven't the doctors been admitting patients?” Bob questioned. “As they are all owners, they have to be aware they are taking money from their own pockets by not doing so, especially if we go bankrupt.”

“I don't want to hear that word,” Angela said, having already been through that demeaning experience.

“It's clear why they are not admitting,” Stewart said. “They are terrified of their patients getting a postoperative infection despite all the infection-control strategies. With reimbursement solely based on DRGs, or diagnostically related groups, patients getting a postoperative infection directly cuts down on their productivity, and it is productivity that determines their income. Besides, there's the malpractice worry. Several of our plastic surgeons and even two of our ophthalmologists are being sued over these recent staph infections. So it's pretty simple. Despite being equity owners, it makes economic sense for them to go back to University or the Manhattan General, at least in the short run.”

“But all hospitals are having trouble with staph,” Carl said, “particularly methicillin-resistant staph. And that includes both the University and the General.”

“Yeah, but not over the last three months, nor at the rate we have been seeing it,” Herman said. “And despite all these efforts that Dr. Sarpoulus has been spearheading, the problem has not run its course, given that we at Angels Orthopedic had another case late today. It's a patient by the name of David Jeffries.”

“Oh, no!” Angela lamented. “I hadn't heard. I'm crushed. We'd been spared for more than a week.”

“Like all the previous cases, we're trying to keep it quiet,” Herman said. “As I said, it unfolded late this afternoon.”

For a few moments, silence reigned.

All eyes switched to Cynthia. The expressions ranged from anger to dismay to inquisitiveness: How could this happen after all that Cynthia had just told them was being done, with considerable funds that they did not have?

“It hasn't been confirmed it was methicillin-resistant staph,” Cynthia snapped defensively. She'd been called by the hospital's infection-control committee chair and briefed on the case just prior to coming to the current meeting.

“If you mean it hasn't been cultured, you're right,” Herman said. “But it was positive by our VITEK system, and my lab supervisor says she's never had a false positive: false negatives yes, but not false positives.”

“Good Lord,” Angela said, trying to keep her composure. “Was the patient operated on today?”

“This morning,” Herman said. “Anterior cruciate ligament repair.”

“How is he doing, or shouldn't I ask?”

“He died while being transferred to the University Hospital. For obvious reasons, once it was clear he had septic shock, he would have been far better treated over there.”

“Good Lord,” Angela repeated. She was devastated. “I hope you realize that was a bad decision. Sending two patients in as many days to a regular, full-service hospital raises the risk the media might get ahold of the story. I can just see the headlines:
Specialty Hospital Outsources Critical Patient.
That would be a PR nightmare for us and do what we are trying desperately to avoid: negatively affect the IPO.”

Herman shrugged. “It wasn't my decision. It was a medical decision. It was out of my hands.”

“How has the Jeffries family taken it?” Angela asked.

“About the way you would expect,” Herman responded.

“Have you spoken with them personally?”

“I have.”

“What is your sense; are they going to sue?” Angela asked. At this point, damage control had to be a priority.

“It's too early to tell, but I did what I was supposed to do. I took responsibility on behalf of the hospital, apologized profusely, and told all the things we have been doing and will do to avoid a similar tragedy.”

“Okay, that's all you can do,” Angela said, more to reassure herself than Herman. She made a quick note. “I'll inform our general counsel. The sooner they get on it, the better.”

Bob spoke up: “If there had to be another postoperative infection, as tragic for everyone as it is, it's best the patient passed quickly. The cost to us is considerably less, which could be critical under the circumstances.”

Angela turned to Cynthia. “Find out if the procedure was in one of the operating rooms that had just been cleaned. In any case, see that it is again taken care of, but don't shut the whole OR. And find out when all the involved personnel had been cultured and if any of them had been a carrier.”

Cynthia nodded.

“Isn't there some way we can get our physician owners to up the census?” Bob asked. “It would be enormously helpful. We have to have revenue. I don't mind billing Medicare in advance if it is only for a couple of weeks.”

The three hospital presidents looked at one another to see who would speak. It was Herman who spoke up: “I don't think there's any way to increase census, especially with this new MRSA case today. I don't know how my colleagues feel, but orthopods are very infection-adverse, because bone and joint infections have a tendency to stay around for a long time and eat up a lot of the surgeon's time, even in the best of circumstances. I've spoken about this issue with my chief of the medical staff. He's the one who clued me in.”

“I've spoken with my chief of the medical staff,” Niesha said. “I got essentially the same response.”

“Ditto for me,” Stewart added. “All surgeons are risk-averse when it comes to infections.”

“It's probably too late, in any case,” Angela said, trying to recover from this new blast of bad news. “But Bob's question gets to the heart of the reason I called this meeting. First, I wanted you all to hear about everything Dr. Sarpoulus has done concerning our MRSA problem. Of course, I wasn't aware there had been a new case. I'd truly hoped we were in the clear. Be that as it may, we have to somehow weather the next few weeks.”

Angela then turned to Cynthia. “Angels Healthcare thanks you for your continued efforts, today's events notwithstanding. Now, would you mind leaving us for our boring financial discussion?”

Cynthia didn't respond at first. Her coal-dark eyes regarded Angela briefly, then swept around at the others. Without a word, she pushed back from the table and left the room. The door closed with a definitive thump.

For a moment, no one spoke.

“Rather headstrong,” Bob commented finally, breaking the silence.

“Headstrong but dedicated,” Carl said. “She's taken this whole problem and its persistence personally. I bet she thinks we are going to talk about her negatively, especially with this new case.”

“I'll assure her tomorrow,” Angela said. “But now let's get to the crux of the matter. As you all know, the closing of our IPO is two weeks away. The trick is how we are going to get there without any would-be investor or SEC official finding out about our ongoing cash-flow disaster. We've been lucky so far, despite the malpractice suits. We're also lucky that the problem with the staph occurred after the external audit, so its impact is not reflected in our IPO prospectus. I know you have all made enormous personal sacrifices. No one in the top echelon has taken any salary over the last two months, and that includes me. We've all maxed out our personal credit. I thank you for that. I can assure you we have begged and borrowed from all our investors to the maximum, including a quarter of a million from our lead angel investor syndicate.

“The irony of this desperate situation is that if the IPO goes as planned, the underwriters have recently guaranteed us five hundred million dollars, meaning we all will be rich and the company will be swimming in cash. Equally as important, our three hospitals proposed for Miami and our three hospitals proposed for Los Angeles will start construction. We are poised to be the first specialty hospital company to go public after the lifting of the United States Senate moratorium on specialty hospital construction, and we are involved in all the most lucrative specialties. The timing could not be more perfect. The sky is the limit. We just have to get there.”

Angela paused and engaged the eyes of each of the people in the room to make sure there was no dissent. No one moved or spoke. Angela briefly glanced down at her notes.

“There is no blame in this situation,” Angela asserted. “None of our spreadsheets that we used for forecasting even worst-case scenarios predicted such a catastrophe, where all our ORs would shut down essentially simultaneously. With revenue at near zero and fixed costs high, the burn rate on our emergency capital was enough to leave us here in the home office breathless. But you know all this, and with your help, we have survived. We've limped along, withholding payment to our suppliers until it was critical. We're continuing to do that, but still, it might not be enough. Bob, tell everyone how much capital we would need to get us through the IPO.”

“I'd be very confident with two hundred thousand dollars,” Bob said. “As the amount drops to zero, so does my confidence.”

“Two hundred thousand,” Angela repeated with a sigh. “Unfortunately, that's a lot of money, and I'm fresh out of ideas. What it comes down to is whether any of you smart people have any suggestions. From your perspective, the main problem, of course, is that all of you will have to meet payroll, and with a negative cash flow continuing, that is getting more and more difficult unless we help you. The trouble is, all our cash accounts are drawn down.”

“What about withholding paying taxes?” Stewart suggested. “It's just two weeks.”

“Bad idea,” Bob said with hesitation. “Payroll tax and withholding tax are paid by wire transfer. If any of you or we hold it up, the bank will know, because we would have to instruct them to do so. Instructing the bank to not pay taxes would be an enormous red flag.”

“What about going back to our lead angel investor?” Niesha suggested.

“I'm going to try tomorrow,” Angela said. “I'm not optimistic. Our placement agent, who found the angel investor initially, has already squeezed out a quarter of a million a month ago, and at the time led me to believe that well was dry. Yet I'm still going to try.”

“What about a bridge loan from the bank?” Stewart said. “They know about the IPO. Hell, it will only be two weeks. With the interest we've been paying on our loans, they've been making a fortune from us.”

“You are forgetting what I said at the outset,” Bob said. “I got a call Friday from our healthcare relationship manager at the bank. He was disturbed that we'd drawn down on facility by selling the bonds to pay our stent provider. They are not all that happy with us at the moment. If he called even part of our loan, the game would be over.”

Angela looked from one person to another at that point. Everybody was looking down at their feet through the glass table. “All right,” she said, when it was apparent no one had any other ideas. “I'm off to the bank and then our placement agent tomorrow. I'll do my best. If anyone has any additional ideas, I'll have my cell phone at all times. Thank you all for coming.”

There was a scraping sound as all the chairs save for Angela's were pushed back on their Teflon-tipped legs. Everyone filed out, with most giving Angela's shoulder a reassuring squeeze in the process. For a few moments she stayed where she was, staring out at the gilded conical roof of the Crown Building across the street, while thinking about her company's predicament. It didn't seem fair that after all her work and anxiety, she and her nascent Angels Healthcare empire might be brought down by some lowly bacteria. At the same time, she wasn't surprised. In the financial world, whether it involved manufacturing lightbulbs or delivering healthcare, fairness was at best an afterthought. Money was king, and she'd learned that lesson the hard way, vainly trying to keep afloat her primary-care practice, which saw more than its share of Medicaid patients. It was that wrenching experience of bankruptcy more than anything else that had driven her to business school, where she had excelled as a kind of revenge and where she came to realize that medical care, if approached correctly, could make one not just financially comfortable but truly rich.