Wednesday, September 23, 2009

CNMI's Dialysis Center

We're supposed to have a new dialysis center at the Commonwealth Health Center. With all of the change orders, it appears that about $22 million dollars of federal and CNMI money was spent building it.

Photo from of CNMI Public Auditor's 2007 Report.

But what we have is a structure that is "built" but not used for dialysis because it is unsafe. The Variety reports today that CNMI Secretary of Public Health Joseph Kevin Villagomez signed off on the project, certifying that the structure was acceptable because of instructions from the "facilities engineer." Who was that facilities engineer? The newspapers don't say.

Joe Kevin Villagomez's role in signing off, though, is being questioned. Shouldn't he have also exercised independent professional judgment?

The problems reported with the new facility:
1. The reverse osmosis (RO) system contains bacteria.
2. The water storage tanks of the reverse osmosis system may be carbon media tanks, not multi-media tanks. Labels on the tanks were changed to disguise the flaw.
3. There is a suspicion of irregularities in materials used in construction: PVC fittings and pipes of the RO system were glued so that excessive glue flaked into the system and would subject patients to possible harm.
4. Public Health officials has told lawmakers that the dialysis center's certification for the RO system was forged.
5. The CNMI sued the contractor Leo A. Daly Company for defective design, and have alleged the facility is useless for its intended purpose. (This lawsuit is only for $10 million, though.) One of the alleged defects (reported in August 15, 2009 Tribune article) is failure to meet stress tests for earthquakes.

And we don't have staff for it.

The CNMI Legislature recently convened two public hearings on the delivery of health services in the CNMI. The House Committee on Health, Education, and Welfare (HEW) invited public health and private doctors to a daytime session, but no one came, according to the today's Saipan Tribune. In contast, the public hearing in the evening, open to the public, drew a small group of about 30 people.

Photo from CNMI Public Auditor's 2007 Report.
What I find interesting is the focus of the hearing: reported as a look at hiring doctors and the necessity of paying for head hunters. Perhaps it's an issue with reporting, but we certainly have much more serious problems than paying head hunters to find us doctors (even at $25,000 / doctor).

In a recent survey, several major problems at CHC were noted, including mismanagement, poor procurement practices, and inadequate billing/accounting and records procedures, along with a doctor shortage.

In Tuesday's KSPN news, Ralph Torres made some remarks that seem unclear: yes he wants to find an experienced person to handle the situation at DPH, and yes, joe Kevin Villagomez has experience. It's not clear to me whether he thinks joe Kevin would be up to the job, but for his health issues that have made him leave island for months now; or whether he was acknowledging that "experience" comes in different varieties and needs to be scrutinized, too.

It's not clear if he just does't like Pete Untalan, either. He reported that Pete said the dialysis center would be open in August and here it is September; but the August 15, 2009 Tribune has Pete saying it will be open in October, with a nephrologist due to arrive on September 23, 2009.

And think of all the earlier times when we've heard that the dialysis center will be opened!

I guess we need Legislative oversight of administration functions; but we also need to recognize that the Legislature's job is making laws, not carrying them out. It's unrealistic to expect the Legislature to take over this problem and fix it. Especially, when you consider that the Legislature's often repeated "solution" is to throw money at the problem, as Ralph Torres says we need to do here.

Nor is the Legislature to be relied on to get things done promptly. They've known about the problems with the dialysis center since at least September 2003, as this flashback from September 2, 2003 shows. The Legislature is a political body that changes with seasonal voting. They get involved with hot topics, but also can cool off before the work is finished.

What do we need to do?

I think we need to start at the beginning and review all that's been done.

So here's a summary of the history of the CNMI Saipan dialysis center, as taken from the newspapers (note, Haidee does a similar thing, in summer 2009, and the link is later, but rather than re-writing and analyzing, yet, I'm just giving the blow-by-blow):


"The California-based Transpacific Renal Network has given recognition to the renal hemodialysis section of the Commonwealth Health Center as one of the top units that provide quality care to patients undergoing dialysis.

Public Health Secretary Joseph Kevin Villagomez said such accomplishment shows the commitment of the hospital in making sure that the best possible care is provided to the people in the community....Dr. Hilmer Negrete, director of hemodialysis unit of CHC, said the team has to submit regular progress report to each patient undergoing dialysis treatment to Transpacific Network."

2000-03-06: 51 dialysis patients costing $5 million / year.

2001-09-07: In 2001, we have 2 nephrologists--Dr. Negrete and Dr. Zahid.

2002-06-11: Rota and Tinian to get dialysis centers at $1million apiece.

“We found out that, if you build a structure and the structure is certified by Medicare, then at least 80 percent of the operational funds will come directly from the Medicare and that is the federal funding we are eyeing. So, to ensure that we can tap these funds, we will make sure that the buildings for the dialysis centers are Medicare-certified,” he said.

Earlier, lower chamber lawmakers said that Rota and Tinian dialysis patients are presently inconvenienced by the need to travel to Saipan, the location of the nearest CNMI dialysis center, to receive treatment.

“Responding to the needs of dialysis patients in Rota and Tinian requires the construction of dialysis centers on these islands. By using the un-appropriated Public Law 12-64 funds on Rota and Tinian, patients need not make the arduous trip to Saipan to avail themselves of dialysis care,” said House Floor Leader Jesus T. Attao, the bill's author.

As broken down in the proposed measure, $1 million would go toward a new Department of Public Health Building and Dialysis Center on Rota and another $1 million for a similar building on Tinian.

2002-08-28: Saipan to get dialysis center; this project is estimated to cost $5.6 million.

"On the Department of Public Health building expansion, this will entail the construction of the extension that would house 24 to 25 new dialysis machine units at the CHC.

Bids for the project were received in April and a contractor has already been selected and notified that it would be awarded the project. However, a notice to proceed has yet to be issued pending the release of several construction permits.

“The government has been applying for the building permits and all the permits necessary to start the project, rather than have the contractor obtain the permits, to eliminate unnecessary delays in the project,” said Jordan."

2002-10-26. Project finally underway. Estimated cost for project between $5 and $6 million. Dr. Hofschneider as DPH secretary. Estimated completion date: 4/18/2004. Current situation: 90 patients.

Hofschneider said the project's contractor is AIC Marianas Incorporated, while the construction management contract has been awarded to SSFM, whose principal is John Gentry and whose fee is about $250,000... Jordan said the DPW released the Notice to Proceed to the contractor last Tuesday and the expansion project is expected to be finished in 540 days, with some additions and deletions to be made on the project.

... Although the budget for the project is between $5 and $6 million, Hofschneider expressed hope that some money would be left to be used as additional funding for the water needs of the building, parking and a new MSO building. This (sic) related projects are estimated to cost $4 million.

Note--this is going to lead to problems later.

2002-11-08: CNMI Government (through Chuck Jordan), keeping track of CIP projects including the dialysis center (CHC expansion) project.

2003-02-07. Groundbreaking for the dialysis center/CHC expansion project. Cost now estimated at $10 million. 93 dialysis patients. Estimated opening of new facility-2 years. That would be early 2005.

2003-06-10. CNMI starts new program for peritoneal dialysis. Now 96 patients.

2003-09-02. Problems about design noted. Change orders being sought. It appears that the issues are the inclusion of improved water system and parking lot, which were not part of the original plan.

What did I mention up above?

2004-01-31. Construction of dialysis center is on schedule, despite some design problems.

2004-03-04. Hofschneider asks U.S. Congress to provide $1.1 million to buy equipment for new dialysis center. Says CNMI only budgeted for building the facility, not equipping it.

2004-10-22. Kagman wastewater project funds reprogrammed to dialysis center.

2004-10-29. CNMI Congress considers reprogramming request; wants assurances. Information confusing; Leo Daly out-Tanuguchi Ruth in.

2004-11-02. Joint House and Senate Committee to probe dialysis center construction issues; Governor Fitial asks for Public Auditor's office examination, also. This article says $11 million given from Covenant 702 funds. Project 40% complete.

2004-12-24. Did we really pay $50,000 to the U.S. Army Corps of Engineers to review the construction of the dialysis center? Stanley Torres says so. Where is the Army Corps of Engineers report?

... And then this recap of the finances:

The reprogramming bill came following findings that the public health project's over $11-million funding had been depleted, even as construction work was only about 40 percent completed.

Originally, the government allotted some $11.8 million in Capital Improvement Project funds for the dialysis center. Of that amount, the Department of Public Health awarded a $5.6-million contract to AIC Marianas to construct the facility.

The contractor had repeatedly asked for change orders, totaling over $4 million, allegedly due to faulty design. About $2 million had been spent for two architectural and engineering designs, while other expenses reportedly went to administrative activities.

2005-08-03. In the meantime, CHC gets a few more dialysis stations.

2005-09-18. Also meanwhile, the CNMI provides competent care and exceeds average U.S. standards, according to Dr. Zahid. Good data here.

2006-02-04. Governor Fitial's administration asks for reprogramming of more funds for dialysis center. Project now 70% completed.

2006-04-11. DPH Secretary Joe Kevin Villagomez says dialysis center will open in October 2006.

“It's going very well. There's a lot of involvement in this project,” he said, adding that there would be medical staff that would be assigned to the new building.

2006-07-07. Dialysis center to be named after Dr. V. (It helps when you're the lieutenant governor and get to sign the law naming the facility after your father.)

2006-07-28. Opening delayed to November 2006, to secure Medicare certification.

2006-10-18. Cost of dialysis center now said to be $15 million. Joe Kevin Villagomez enlists political support, like this:

“Our money was well spent,” Rep. Manuel Tenorio said.

2006-10-19. The new building is used as bait to seek more funding for CHC! See, we did a great job and now need to upgrade the rest of the old building... or something like that.

2007-06-08. Inspector General's Report identifies management issues with the dialysis center project.

2007-07-11. Joe Kevin Villagomez says we should privatize the dialysis center building; it's still not open. (This sounds like a scam to me--some way to get a private business some additional cash at government expense.)

2007-10-05. Both CNMI nephrologists have recently left the CNMI; a Guam doctor will be visiting.

2007-12-20. Ribbon cutting and new dialysis center officially opens. Umm, does it?

2007 Public Auditor's Report at page 6 says this:

A joint evaluation of the Saipan Public Health Facility Project (Project) by the Department of the Interiors' Office of the Inspector General (OIG) and OPA showed serious deficiencies in the contracting process, including the failure to adhere to established procurement regulations and the lack of qualified and experienced officials to administer the Capital Improvement Project (CIP) program, which significantly affected construction costs and time frames.

2008-01-26. CNMI spending $8.8 million /year for 96 dialysis patients.

2008-02-07. Children's Clinic and immunizations moved to new dialysis center wing.

2009-05-18. CNMI once again without a nephrologist. Other concerns about CHC raised by Ed Propst.

2009-05-19: Untalan responds: Those concerns are just one person's opinion; Diabetes Prevention Program still operational.

In a recent letter by Rep. Ralph DLG. Torres to DPH Secretary Kevin Villagomez, the former asked for some information on several matters at the CHC.

These include updates on the status of nephrology, updates on dialysis machines to be replaced, local expenditure for Fiscal Year 2009, data as to the number of dialysis patients, the status of the Hemodialysis Center and other issues.

A copy of the letter was sent to Saipan Tribune. Secretary Villagomez has yet to respond to e-mail inquiries about it.

2009-05-23. Legislator asks for information from Secretary of DPH. See, the Tribune does read the letters submitted!

2009-06-06. FDA Certification for dialysis center forged. Information revealed in BUDGET HEARING!

Acting Health Secretary Pete T. Untalan told the House Ways and Means Committee yesterday that the U.S. Food and Drug Administration certification of the reverse osmosis water system at the new dialysis center was “forged” by an individual previously connected with the U.S.-based Severn Trent.

Severn Trent supplied the reverse osmosis water system unit to Saipan Ice, which was one of the subcontractors of AIC Marianas, the main contractor for the construction of the new dialysis building in Garapan.

Saipan Ice's sales supervisor Lito Dizon and AIC Marianas project engineer Ding Lacap separately said in telephone interviews that they're not aware of the forgery and that nobody had told them about the issues that just came about.

Medicare requires the CNMI Department of Public Health to have an FDA-certified reverse osmosis water system for it to operate the new dialysis center, which has yet to open three years after its construction was completed in 2006.

“We found out just a few days ago that the reverse osmosis system is not FDA-certified,” Untalan told the legislative committee chaired by Rep. Ray N. Yumul (R-Saipan) during yesterday's hearing on DPH's Fiscal Year 2010 budget.

(This certification is needed for Medicare approval. Why did it take this long to figure this out? Weren't we seeking Medicare approval back in 2007?)

2009-06-08. Cost for dialysis center now reported at $22 million.

2009-06-09. CNMI Legislature to ask Public Auditor to investigate.
Have they read the existing OIG report or the OPA's 2007 report?

2009-06-12. CNMI to sue over $22 million "fiasco." Good review of situation here.

2009-06-16. The local newspapers finally catch up to the 2007 OIG/OPA report.

2009-06-16. Matt Gregory, former CNMI AG, now files suit as a private attorney against Leo Daly for $10 million on behalf of the CNMI.

We have an Attorney General's Office, but we use a private firm for this. Why? Oh, because the OAG is understaffed. But why not use the money and hire another Assistant Attorney General instead of paying private attorney rate fees? (OMG!)

In my opinion, Gregory should have brought this action while he was the CNMI AG. And his failure to do it then should be reason enough NOT to hire him and pay him more money to do it now.

2009-06-17. Haidee Eugenio continues to dig for the full story.

2009-06-19. The CNMI is not pursuing criminal charges for the dialysis center fiasco. And Juan Reyes at DPW identified as the "expenditure authority" (for at least some of the time? or all of the time?).

2009-07-21. Representative Ralph Torres says we'll have one full-time nephrologist for Saipan/CNMI next month (August 2009).

2009-08-15. Grand opening of dialysis center set for October 2009. It will be old before it is in use!

2009-09-19. Pete Reyes and Arnold Palacios think we need a law establishing a "corporation" as the solution!

The lawmakers said a bill establishing a corporation for public healthcare and related public health services will in the long-term provide a foundation for a high quality, efficient and market-oriented public healthcare delivery system.

Without any analytical basis; without reference to the real studies of the problems done; without regard to the problems we've had from corporations like MPLC. How is a corporate structure going to address the problems! Sheesh. Just like privatizing seems to be a method for economic graft, this is nothing but political graft--imho.

Somewhere in all of this was a report that there were three contractors/project designers(?) involved--Leo Daly, Tanaguchi Ruth, and an unnamed third. Who is the third contractor? Perhaps I missed that information somehow.

Where do we go from here?


bigsoxfan said...

So, your point is? They built and a building with unsafe infrastructure and inadaquate structure and now they can't staff it as points one and two above, preclude funding. I wish I was wrong, but your article leaves little doubt.

Saipan Writer said...

I'm not sure I have a point yet, although you do a good job summarizing the situation.

I'm trying to be a good citizen and analyze what's happening in our CNMI.

It's an awfully big mess.

So far, I'm thinking:

1. There were probably political reasons in the beginning for not getting the full amount that would be needed, for not including the water, the parking lot, etc. I'm guessing this was because both Rota and Tinian were also demanding a dialysis center, and were getting only $1million dollars each. So Saipan couldn't look like it was spending $11million (or the Rota and Tinian Senators might have complained). Or perhaps there was some other project where the money eventually did go, and whoever was behind that could have put the kibosh on this project. Whatever the reason, DPH agreed to a contract for $5.6 million, which left out a lot, with the hopes of getting more later. Hofschneider practically says this in one article where he's quoted.

2. When the cost overruns and design changes started, there was too much to manage to keep everything in check--to make sure there were in fact ways that corridors connected to each other, etc.

3. The millions just kept piling up--from $5.6million to $6million to $10million to $11million to $15million to $17million to $22 million. What's a few million between friends? I'm thinking some of it went astray, too.

4. The forgery is a crime and needs real investigation. It's especially problematic if the document forged was submitted to Medicare as proof of compliance. Everybody connected with that forgery needs to be prosecuted.

5. There is still a lot that needs investigation, even journalistic investigation. Where is Joe Kevin Villagomez really? Is he really sick or hiding out? Is he being paid while he's on leave?

Who all was involved in the design? Who was the agent who allegedly told Joe Kevin to sign the acceptance certification?

Where is the Army Corps of Engineers report? Did we really pay for that? How many OPA reports have there been? Have we followed the recommendations? Were the recommendations only to prevent future problems or did any of them address how to fix the current mess?

What will it take now to give us the dialysis center we really need? How many dialysis patients do we have? Who is the new nephrologist? What plans do we have to hire another on a long term basis?

And who is capable of running the show?

Saipan Writer said...

Oh yeah. I forgot to comment on this bit in the 9/19/2009 article:

"They cited the comprehensive assessment of CHC begun by Dr. Donald Bader, but not completed due to lack of funds."

They being Pete Reyes and Arnold Palacios.

Don Bader was here a while ago (about 8 years, I think). Whatever he did is now out of date. They need to start over.

captain said...

From personal experience dealing with NMI govt construction contracts, when ever funds are appropriated for a project it is common that on the NMI Govt side, nobody ever thinks about the full picture when asking for money for a project.
Example, The Rota Library sat about 4 years give or take after completion because of some thing missing and no equipment to operate or funding. The Tinian Library was completed on schedule but there was no money appropriated for Aircon system,parking lot,or power transformers or equipment.The building sat dormant for a while. The money to complete was reprogrammed from an amphitheater and put out for bid to another contractor.Then ther is/was problems with two of the large aircon systems as their was a change from the original aircon design and costs. (More)
The Youth center had the same problems with no operating capital and no equipment including pool chemicals.
No maintenance money or qualified person to maintain the pool. Last Time I checked the pool was not used and I don't remember it ever being used.
The tennis courts (youth center) was deteriorating shortly after opening. Also the contractor on these projects "ran off" with the money and left the facility unfinished. Other funding had to be found to finish tjis facility off. By the way the Contractor is working for the NMI Govt now in connection with the health center.

I can go on and on, most projects end up like this.
Do you now see the trend, the incompetence within the political appointed incompetent people within DPW etc.
Also the failure to prosecute these "connected" named individuals.
Not much unlike the DPL group.
There was talk within a Fed agency to cut funding to the NMI as when ever a facility was built it was not maintained and let rundow.

captain said...

Oh another thing, on the Tinian High School project, after being uncompleted it sat for about ten years (Guerro Bros default)
More money was appropriated and it finally went out for bid and construction completed, BUT there was a problem with electrical upgrade on the new school library. It was unused for many years. I haven't been back there in a while so doe not know if it ever got completed as no money was ever appropriated.
The Mayor built a Clock and some more park benches instead

Anonymous said...

There is also more than $10Mil unaccounted for by the Tinian treasury

Anonymous said...

The Dialysis structure was over looked by NMI and Federal inspectors along with an Independent engineering firm.
Both of the inspectors from both NMI and Feds are local employees with "connected" names and the PW involved also.
The contractor's engineers pointed out the problems in the beginning and wanted to hold up the construction but were told to proceed anyway and Daly would revue and make alteration on the designs.
It was also was expressed (by the contractor and his engineer), that there would be much problems and would have a ripple effect on down the line if the corrections in the designs was made in this manner. It would have been best to completely redesign and then proceed.
The problem was also because the construction was already started, the contractor could not back out of the project because of bonding and legal issues. So had to continue at the insistence of Public works and other parties that were involved..

Anonymous said...

"It's an awfully big mess."
No kidding.... what do you expect when three Governors and all the various "appointed" Department heads have all had a hand (and their own personal political agenda) in increasing the scope of work as the years went by? There will be no easy solution to this. The main problem is the CNMI cannot attract qualified A&E proffesionals to monitor the CIP projects. Also, jealousy is another factor. How in the world do you think a Secretary of Public Works getting paid $59,000 per year will get along with a CIP Project Manager making $130,000 per year? The CNMI has hired qualified top level people in the past and they were eventually forced off the island due to the jealousy of a number of politically appointed department heads. DOC, DPW, PSS, CHC, NMC, need more info?

Saipan Writer said...

There are a lot of people who know more about this than I do, and I really appreciate the comments.

I hadn't thought about the "jealousy" issue, anon 8:23 AM.

And I guess I don't understand why contractors were told to proceed anyway. Is there some graft /kickback involved?

Remind me what A&E is in this context?

And what little I recall about "inspectors" (from a few house construction cases I handled), these guys are only checking to see that progress is made along the way--they don't have anything to do with design quality or appropriateness.

They should catch bait and switch tactics, variations in materials used, etc. But if the plans are ambiguous or vague, they're not going to fill in the gaps with real standards.

And that also gets back to the basic issues--how do we
1. fix the problem at CHC?
2. prevent this from happening again and again?

bigsoxfan said...

Wow, a question part of which, I can answer. A&E is what I do these days. Asset Evaluation, preferably performed by a liscenced civil engineer, but most often by someone like me. Certainly A&E isn't rocket science and an experienced civil planner would catch most of the problems, but... for example 1. the problem with pvc glue excessively applied comes down to supervision of the contracters. Not something one would notice on a casual site visit and somewhat out of the scope for an A&E inspection. 2. Mis-labeling the water filtration tanks. I'm of the opinion either a low bidder was upset or the contracter was screwed. Media tanks are fairly undistinguisable in type unless you really know your system 3) The unability due to inadaquate adherence to seismic code. I'll call Shennigans on that one. You can't build every structure to the highest code and the hospital is what is is. The clinic, as part of the complex, doesn't need the higher standard, as the services can be provide off site in a pinch (or shake, as the case might be)
The big big point to my mind is; all the money wasted in cost overruns, fraud, and bad decisions would have gone a long way to a decent education system on food prepration and choices and even to developing an agriculture program to steer people away from eating habits which go a long way to developing diabetes in the first place. I will not say there is not a demonstrated need for a treatment facility in the area, but if you want to save dollars in the future, then education and providing healthy diet opportunities will produce a much larger payoff, than a bloated treatment center ever will.
I'm not even going to genetic dispositions in the population towards diabetes, those factors may or may not be present, but at the least a first class facility should be supplanted with a program to keep the people out, if at all possible.

bigsoxfan said...

Oh yes, Really great post, Jane. I'm glad to see the issues coming out, rather than the usual bottom feeding politicaly correct for the election season fare. I'm looking a slate of canidates, Tina for Gov, Angelo for VP, and yourself as the AG. Nice thought, anyway.

Jane said...

Thanks again for the information. Wow! It really makes a difference to have someone with experience look at these matters.

On the comment on public positions: I wouldn't be the right choice for CNMI AG. I'm a good lawyer in my area (civil poverty law), and I have office management skills, but the CNMI needs an AG who also has criminal law experience, a lot of contract and government contract experience, and a high tolerance for dealing with government officials. I'm lacking in those areas. :-)

Ed Buckingham isn't a bad choice. Although we are on opposite sides of the political coin, I think he's intelligent, ethical, and hard-working, and has at least some of the skills I've identified above (and maybe all of them, just that I don't know his full resume).

bigsoxfan said...

Horse Hockey, Jane, the CNMI has run a bundle of people with the qualifications you mention through the AG position. What is needed is a manager with a certain amount of sense and when needed compassion. The CNMI is not LA and needs to realize they are not, It just isn't affordable or smart to bring all the mainland rules to an island where the rules aren't applicable. Of course, the law, as written, don't read that way. Keep the good and get rid of the junk.

Jane said...

Well, we are small potatoes. But I feel pretty strongly that to be an effective manager you have to know the ropes, and criminal law is a different world--one I try to stay away from.

Common sense and compassion--yeah. Those are always good qualities to have in a leader.

Anonymous said...

A&E is an acronym for Architects and Engineers.
There are many uninformed out there spouting off about the CHC Clinic project.
Ed Probst wrote a letter to the local papers and in there he made a lot of false comments. He really has no idea about the history of the project. He really should have talked to the CNMI Project Manager, who is very open about how the project was handled before he let loose with his usual barrage... but that's just Ed. As far as fraud/kickbacks the construction part of the project was heavily investigated for 2 years(some still ongoing) by many federal offices OIA,GAO,FBI,COE, and even the CNMI AGO and OPA(two hopeless organizations if there ever was one). No fraud was determined...just the usual mishandling of scope of work, unfettered political interference, and procurement procedures.

Saipan Writer said...

Last anon, Thanks for your input.

I'm not sure which is worse, graft and corruption or "mishandling of scope of work, unfettered political interference, and procurement procedures." Is it harder to clean up "sin" or develop competencies?

And why do we continue to see mishandling of scope of work? What is the purpose of the political interference? Why can't we follow procurement procedures?

We need some better understanding of what is feeding the problem.

Anonymous said...

Are you still looking into this mess, last entry was Sep 23rd last year. THe building is still not ready and not a peep out of Ralph Torres since he moved down the hallway after the election.