The Doctors Are In

University Physicians bring a new day at Pima County's 27-year-old Kino Hospital

University Physicians HealthCare has renamed Pima County's hospital, reloaded its staff, restocked its equipment and reduced its monthly operating debt.

But Kino Community Hospital, now University Physicians HealthCare Hospital at Kino Campus, still lost more than $11 million during the first five months University Physicians operated the hospital at 2800 E. Ajo Way.

And Pima County taxpayers will spend up to $25 million this year for Kino operations.

All of that is good news.

The five-month loss was nearly $3 million less than anticipated. And if the entire $25 million Kino cost comes from Pima County taxpayers, it will mean that the owner of a $100,000 home will pay roughly $50 for hospital operations. The public will subsidize not only UPH's doctors, employees and administrative staff, but a host of management consultants that cost $346,139, according a snapshot financial report UPH submitted to the county for August.

There are still disputes. UPH, for its last financial period, demanded about $300,000, including money for its consultants, bonuses for bureaucrats and bonuses to lure nurses. The county is balking at those charges, and bonuses are not allowed in the rest of county government.

Otherwise, County Administrator Chuck Huckelberry, an engineer who has struggled to get a grip on the county's medical and health services ever since he took the county's top job in 1993, couldn't be happier.

The $25 million payment to University Physicians represents a 23 percent drop in the $30.8 million deficit Kino ran up last year.

In a recent report to the Board of Supervisors, Huckelberry labeled the drop "fiscal performance improvement," and added, "in all, the transition of Kino has been remarkably positive."

Nearly anything would seem better than the county's dismal management of Kino throughout the last 10 years. After reducing its costs and building up its patient base, Kino flourished for three years, ending in 1992. It operated at or within $2 million of its annual budgets, then roughly $50 million. County managers and Schaller Anderson, Kino's management at the time, successfully tapped indigent health plans for patients they were able to retain.

But just as Schaller Anderson and its county bosses were close to spinning off Kino as a semi-public nonprofit hospital--in the pattern of most of the country's government hospitals--a Republican majority of the Board of Supervisors fired Kino management and the county officials who oversaw the hospital. Annual deficits after that rose so high that county lawyers essentially ordered the Board of Supervisors to jack up property taxes in 1999 by 11 percent to cover losses. Deficits and long-term debt were covered ahead of schedule, but the tax increase has never been repealed.

Turnstile management hit a nadir in 2002 as Kino entered its 25th year. Hospital rooms and showers were full of mold, and money approved by voters for expansion and clinics was diverted for remediation that later evolved into expansion of psychiatric rooms at Kino and a sharp reduction in rooms for medical and surgical patients.

Physicians were treated poorly. Some who brought in valuable grants found the money stripped away by administrators who then stubbornly resisted paying the doctors.

A regular inspection and evaluation by the Joint Commission on Accreditation of Healthcare Organizations stopped just as it began. Members of the survey team were so put off by Kino's inter-department disarray--including the failure of administrators to keep basic physician credentials on file--that they packed up after only their first day. They were coaxed back, and Kino barely retained accreditation.

It got worse.

Wendy Gazda, a troubled 32-year-old woman, died in Kino's psychiatric unit in 2003, after she was manhandled and pinned face-down. Her death was ruled a homicide. Her father later reached a $105,000 settlement with the county.

Next came the theft of a half-million pills, including large amounts of painkillers, from Kino's pharmacy. The county paid a $111,000 fine to settle the case, and UPH officials, then just entering its management and operating agreement at Kino, were skittish enough to retain high-powered legal counsel.

It's hard for even county critics not to now share Huckelberry's enthusiasm.

UPH, the state's largest physician group, is composed of the doctors of the University of Arizona College of Medicine. Accreditation, through 2007, was easier to achieve last year. The link with UPH has allowed Kino patients greater access to a wider variety of doctors who also work at University Medical Center. The medical staff has expanded to 234, including 141 from UPH.

Orthopedic services, including surgery, have returned to Kino, as has expanded general surgery. Surgeries had dwindled to nearly zero at Kino in 2003, and now number about 100 a month. And UPH has infused money for equipment, including a CT scanner, and an overhaul of operating room equipment and supplies. In all, UPH will spend nearly $10 million for new equipment and facility improvements during the next two years, according to a report submitted by UPH Chief Executive and President Norm Botsford.

The Kino agreement with UPH calls for county payments totaling $127 million to UPH over 10 years.

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