Fierce exclusive: Tales of an accidental hospital CEO

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When I dine with Jerry Seelig, it's usually to enjoy some foodie oasis in or around Los Angeles. But when I sat down with him for breakfast last week, it was to deconstruct his recently concluded odyssey as an accidental hospital CEO.

Seelig is a patient care ombudsman (PCO). Courts appoint him to work with a hospital or nursing home when it files for bankruptcy protection to ensure that the continuity and quality of care doesn't deteriorate in tandem with the provider's financial situation. He plies his trade all over the western U.S.

Last year, Seelig was appointed PCO for Nye Regional Medical Center. It's located in the remote mining town of Tonopah, Nevada, best known as being adjacent to the infamous Area 51 where the U.S. military puts top-secret aircraft through its paces. The hospital had filed for bankruptcy in late 2013 and was in danger of closing, leaving the community without another acute care facility for at least 100 miles in pretty much every direction.

That isolation led in part to Seelig being named the hospital's Responsible Executive--a bankruptcy term that is the legal equivalent of a CEO--about four months after he became its PCO. The area's leaders were impressed with his transparency in reporting patient care woes at the hospital, and given there were not a lot of experienced hospital executives willing to come in and take over, Seelig accepted the job. He'd commute to the hospital, flying into Las Vegas from Los Angeles and then making a 200-mile drive to Tonopah.

Aside from his PCO work, Seelig has had no experience as a hospital manager. You could call him a doctor, but given that's in reference to a Ph.D he earned from the University of Chicago in social work, that doesn't hold much weight in a patient ward.

Despite its isolation, Tonopah's demographics should have been promising for any hospital. Along with the presence of mining companies and the military, a Spanish conglomerate was building a solar farm in the area, so there is an abundance of well-educated and well-paid residents. Three-quarters of would-be patients walk into Nye County's doors with insurance, and Nevada's decision to expand Medicaid pretty much covered the rest.

Nevertheless, Seelig told me Nye Regional may have been in the worst shape of any hospital he's ever seen. Records--particularly an August 2013 report by state inspectors that he shared with me--tend to bear this out. Eight patient records pulled at random didn't have nursing plans. The laboratory was barely functioning--at least 80 patients who should have received blood count tests never had them because reagents weren't available. That prompted at least one child to be transported by air ambulance to another facility in order to undergo proper testing-- literally a $40,000 solution to a $3 problem. There was no pharmacist because he hadn't been paid, and drugs in the pharmacy weren't secured.

The hospital's finances were in equal disarray. The state inspection report indicated Nye County had no budget, and that its governing board had not met since at least 2010. Employee checks had bounced. Other records indicated that the hospital owed the Internal Revenue Service more than $400,000 in payroll taxes.

"There was no ledger. There was no aging of accounts. There was no nothing," Seelig said. When he took over, to the best of his knowledge there was $16,000 in the bank and a $100,000 payroll that had to be met twice a month.