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Wright Lassiter's Audacious Vision for Safety Nets

Philip Betbeze, for HealthLeaders Media, November 30, 2012

That means if Lassiter's vision is to be realized, ACMC will need to do at least a couple of other similar acquisitions, he says.

"It's to our advantage to have greater access points where we don't serve people today," he says. "We are $600 million [in annual revenue], and the others are $50-$100 million and unaffiliated with anyone else. They have zero chance of being successful without affiliation with other facilities."

The safety net squeeze
That Alameda County Medical Center is in position to even consider so forward-thinking and ambitious a strategic plan is almost miraculous given the perilous financial state of so many of the nation's safety net hospitals. For many years, many public safety nets have relied on calcified and political board governance, a revolving door of executives, labor problems and lack of accountability, and perhaps most damaging, service to a large class of patients whose  treatment has been classified as either charity, bad debt, or reimbursed at Medicaid rates. That unrealized revenue leaves most safety net hospitals in poor shape to replicate anything close to Alameda County's level of business maneuvering.  

But ACMC's top leader has a couple of financial turnarounds under his belt that have put it in the position to expand in anticipation of a significantly altered financial equation for hospitals and health systems in coming years.

ACMC lost as much as $65 million just before a local sales tax initiative was enacted in 2004, prior to Lassiter's arrival. But soon, even that additional funding was not enough to keep it out of the red. When he arrived in 2006, the organization had lost $4 million just in the first quarter.

Lassiter walked into a crisis. "Not one of the more pleasant surprises that I'd received in my life," he deadpans.

He and his new COO set out to do something drastic, starting with a margin audit. That exercise made clear that the organization's department heads lacked financialsophistication.

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