December 11, 2019; KARE-TV (Minneapolis, MN)
NPQ has often written about stakeholder activism and the enormous power it puts within reach of many nonprofits. This case—in my opinion, and I watch these kinds of situations carefully—is an example of calling on those stakeholders in a respectful manner even in the midst of crisis.
The following letter is written by Ritesh Patel, CEO of the Open Cities Health Center in Saint Paul, Minnesota. In it, he takes organizational responsibility for the state of the organization, laying out in some detail what happened to land the organization in peril. He details the moves they have made to address deficiencies, and he appeals to stakeholders to take a number of different types of action, appropriate to the particular organization. One of these is donating, but donations are not all that they need.
Read below for a very well crafted letter that leaves little to the imagination, builds a case, and lays out avenues for action carefully and with some detail:
To our Staff, Patients, Community Members, Community Leaders, and Stakeholders:
Open Cities Health Center is facing a crisis and needs your support. By January 2020, Open Cities will have reached the end of its cash reserves and will run out of money. Unless we secure help, Open Cities will be forced to close its doors and cease operations.
To understand how we got here, it’s first important to understand what Open Cities does. Open Cities serves as a Federally Qualified Health Center (FQHC), operating under a federal mandate to serve as a healthcare safety net for all patients regardless of who they are, where they come from, what their legal status is, and regardless of their ability to pay. In exchange for operating under this mandate, the U.S. Department of Health and Human Services gives Open Cities a once-a-year grant of $2.7 million that arrives each April. However, this money (along with a small handful of private grants) is not enough to cover all of the costs associated with providing care to our more than 10,000 patients each year. Open Cities also relies on reimbursements from private insurance companies, Medicaid, Medicare, and payments made by those uninsured patients who pay out-of-pocket for their care.
Unfortunately, our current management team inherited an organization struggling under the weight of a long history of financial practices that had Open Cities borrowing against future federal grant money and borrowing against future “receivables” (money we expect to get from patients and insurance providers). In addition, Open Cities was stuck in an oppressive vendor contract had our reimbursement and collections rates running more than 20% below industry averages. Frustratingly, current management also recently discovered (and quickly corrected) a longstanding but improper accounting practice that overinflated our accounts receivable by more than 300%. Finally, Open Cities had been struggling with serious operational inefficiencies and staffing shortages that further hampered our ability to serve the ongoing needs of our patients.
While the current management team has been earnestly pursuing course correction and improvements that will guarantee the long-term viability of Open Cities, our efforts have not yet achieved the financial results we need in order to afford continued operations between now and when we receive our next federal grant.
Over the course of 2019, with the help of an outstanding team of providers and administrative staff, Open Cities management has achieved the following:
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- We’ve improved outreach and community engagement resulting in a shift from a downward trend in our patient population to a significant upward trend.
- We’ve improved our team every step of the way, making necessary cuts and substantial staff changes to improve our organizational efficiency.
- We’ve instituted an “Open & Honest Compliance Program” that demands greater integrity and transparency from everyone working within and with Open Cities.
- We’ve terminated unfavorable contracts, switching to vendors that will save the organization significant money over time.
- We’ve undertaken significant overhauls to our vendor management practices.
- We’ve uncovered and corrected the improper accounting practices that have so severely threatened Open Cities’ continued ability to operate.
- We are working to end the practice of borrowing against future funds that has already so severely jeopardized Open Cities’ future.
With your help, and with the help of our larger community of governmental, business, and non-profit supporters, Open Cities can achieve self-sustainability and thrive. We can continue providing more than 10,000 patients (and growing) fully integrated and comprehensive primary care, optometry, dental, chiropractic, and behavioral health services in two separate Saint Paul locations – Dunlap Street in the Rondo Community and Rice Street in the North End. We can continue serving as an extraordinary and much-needed healthcare resource to the Rondo, Frogtown, Payne-Phalen, and North End communities.
But if Open Cities does not survive this crisis, more than 10,000 people in need will either forgo healthcare, seek private-pay healthcare they cannot afford, or pour into local emergency rooms. More than $3 million of annual grants will simply evaporate and will no longer go to help so many of our low-income, high-risk, and vulnerable neighbors receive the kind of high-quality healthcare they deserve and so desperately need. St. Paul will lose an extraordinary asset right as it’s on the brink of achieving some of its greatest successes. The Rondo neighborhood, which has historically faced so much hardship, will lose a flagship healthcare provider. And the North End community will find another boarded-up building at a time it’s been facing so many other devastating challenges.
If you are able to offer financial support, please click here to donate.
Fortunately for Open Cities and for the communities we serve, Congresswoman Betty McCollum’s office is working with Open Cities to coordinate and seek action from the Minnesota Department of Human Services, Minnesota State Senators and Representatives, Allina Hospital, Regions/HealthPartners Hospital, Ramsey County agency officials, Ramsey County Board of Commissioners, City Councilmembers, and the St. Paul Mayor’s Office.
We urge you to offer your support to these various stakeholders in pursuing the necessary solutions to help Open Cities stay open. Let them know you appreciate their efforts. While Open Cities can continue to provide a much-needed service to our community, and is working vigorously to address so many challenges that have built up over time. Open Cities simply needs a helping hand to allow us to finish executing the changes we’ve been so vigorously pursuing in order to achieve a brighter self-sustaining future.
Please contact the elected officials below and thank them in their efforts to help Open Cities Health Center and to urge them to find a solution to allow Open Cities to continue serving as a bright and important resource to the people of Saint Paul.
We have seen these kinds of efforts work well in other situations, but calling out the stakeholder troops implies a two-way relationship that should be sustained over time. In the case of health, which requires such involvement, it should simply strengthen the real intention of community representation in governance.
We wait with great interest to see how this campaign pans out.—Ruth McCambridge