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West Suburban Health Group - Nobody’s in Charge

by William Dowd
February 15, 2013

First the good news. The Selectmen are at least acknowledging that there are things worth looking into more deeply.

Back in December, January and then again at the last two meetings, the Selectmen reported during public comment that they had 1) conveyed the concerns I raised in October, 2) had discussions with people at the Group about them, 3) heard that similar concerns had been raised by other member towns and 4) decided to wait until after the Group’s next scheduled meeting on February 19, 2013 to find out what was going on.

Selectmen Leary pointed out at the Selectmen’s meeting on February 6 that the difference between the Selectmen and me was “style”. I’m pushy and impatient (my words), and they are willing to let the process work its way through and get results that way. I have been told repeatedly that the Group is a collection of many Towns, and that no one person can speak for the Group. The only way the group acts or speaks is at a meeting.

While I am thankful for the opportunity to have had these recent interactions with the Selectmen, here’s the bad news. This is not a matter involving a few hundred bucks whose impact is small and can wait for the machinations of government. The West Suburban Health Group handles over $120 MILLION every year, over $6 million from Holliston alone. The Group has accumulated a $21 MILLION unrestricted surplus of which about $1.1 million belongs to Holliston employees and taxpayers. The contractual terms by which Holliston participates make the town liable for any deficits the Group runs, but makes the Town forfeit any surplus if it leaves the Group. Finally, the FY11 independent audit of the Group disclosed a financial reporting deficiency. Each one of those facts should warrant a public meeting of the Board of Selectmen with an agenda item specifically listed. It’s been over four months and that hasn’t happened even once.

But what I’m told is that no one can answer any of these issues because the Group only acts and speaks as a group at its meetings.  If you have any questions, you have to wait until the Groups next regularly scheduled meeting. That might be OK for the Selectmen, but it is decidedly not OK for those of us paying the bill.

The Selectmen and FinCom are going through departmental budget reviews and hearing all about how budget limitations are making it difficult to keep up services to the Town. How can they on one hand listen first hand to the difficulties these department heads are facing, and on the other hand be so passive about such a huge amount of money. Using our history with Free Cash as a guide, even if the Group refunded the Town’s $1.1 million overcharge tomorrow, none of it would make it back to taxpayers. But aren’t there about 100 better ways for the Town to maximize the values of $1.1 million in one time money and thousands of dollars a year in excessive insurance premiums than to have it sitting unnecessarily in a surplus account?

I’ll be attending the Group meeting in Wellesley on February 19. I’m not optimistic about big change coming out of that as it appears the wagons have already been circled. The Group has refused to provide public documents to me, and I’ve had to file a formal appeal and request for investigation with the Secretary of State’s office. At the Selectmen’s meeting on February 13, Selectmen Leary asked if I even have “standing” to request documents. He wasn’t sure the Group was even required to provide copies to a plain old citizen. Thankfully, under the law, you don’t need “standing”. Public entities are required to produce public documents on request. But even if I did need standing, isn’t the fact that I am personally financing the Group enough?

This is a very bad situation. And as troubling as it is to realize that there’s no one in charge at West Suburban Health Group, it’s even more distressing to realize that there’s no one in charge at Town Hall either.


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Comments (4)

- Mike | 2/18/13 9:07 AM

Bill, Thanks for the response. Another possible way to address the excess reserve would be for the town to appoint you as its representative in the Group. As such, you could lend your HR and Benefit expertise to the management of the group.

- LT | 2/17/13 10:42 AM

LT - Since this Group is unusual among the collection of the purchasing groups around the state in that it does not have a website with meeting announcements, agendas and minutes and published financial statements, I requested the audited financial statements from Town Administrator Paul LeBeau. It is these statements that disclose the $21 million unrestricted operating surplus which is IN ADDITION to a nearly $8 million reserve for unpaid claims. The $1.1 million that is Holliston's is based on being advised by the Town Administrator that Holliston's interest in the Group is 5.4% based on enrolled subscribers. Here is the reporting deficiency: "The Group's treasurer either performs or supervises all functions and controls that initiate, record, process all of the Group's transactions and financial reporting. The lack of segregation of duties is a combination of control deficiencies that we consider to be a significant deficiency." That was from the independent auditors. And with all this, we get a "wait and see" from the Selectmen. Assuming that the group of town officials running this group are thoughtful and purposeful people, how can it be over four months and NO ONE can explain how or why the Group is overcharging for health insurance and building such a huge surplus?

- Bill Dowd | 2/16/13 12:42 PM

Bill, can you elaborate on the accounting deficiencies in the audit report? What were the deficiencies? Does this "group" publish financial statements? Have you seen or requested fincial statements? What data are you using to calculate the $1.1 million that "belongs to Holliston?" Is this just a percentage estimate based on number of participants in the group, or something more complex? I have to agree with you that this "group" appears to be run in a Mickey Mouse fashion. It is troubling that the group's chairman is an official in a participating town. That means the group does not have full time competent management (of course that would also increase the administrative costs of running the group, but might reduce the amount of surplus that is held as a safety net). Thanks for bringing all the to the surface. Run for selectman. It's the only sure way to have an impact on this. Getting elected may be difficult, or even impossible. But at least the debates would be interesting.

- LT | 2/16/13 10:56 AM



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