Archive for December 28th, 2014

by lizard

Community Medical Center had a 75 million dollar choice to make. Seeing as how this money came from the sale of a non-profit hospital, lots of people had lots of hope that this money could be used to positively impact our community. But instead of engaging the public, the CMC board has essentially spit in the face of Missoula by dumping 10 million on the UM foundation and taking the rest to create another non-profit, because that is what Missoula needs, another non-profit. Dave Woolhiser, a founding board member of the Missoula Community Foundation, wrote a letter about this decision and I’m going to repost it here because Dave says what needs to be said:

As an alumnus of the University of Montana who, through charitable giving and volunteerism, supports much within the Missoula community and across Montana, I am offended by the recent decision of the Community Medical Center’s board.

The board has reached an agreement with Billings Clinic and RegionalCare Hospital Partners to sell Community, a non-profit, community-focused hospital, to become a for-profit entity. No dissatisfaction there. I think they did their homework and can justify their decision intelligently.

My dissatisfaction lies with the board’s decision, after an inadequate and unsatisfactory amount of due diligence regarding the disposition of approximately $75 million of charitable assets from the sale — “our” money. The board has decided to give over $10 million to the University of Montana Foundation and use the remainder to create yet another nonprofit organization in Missoula. The process used by the board, lack of concern for the community’s benefit and ultimate decision are three areas of great concern.

To my knowledge, the board did not undergo any sort of rigorous review of existing organizations with which to partner, nor did they conduct any sort of meaningful public discussion regarding this matter. They did host a few meetings, yet those were not community engagement sessions. Community administration was unwilling to share any meaningful information about disposition of the funds with attendees of the sessions I attended. In fact, in one of them we were directly told the process would remain closed “out of respect to the CMC board”!

Transparency and community focus should have been paramount in this situation. It appears to me that the decision has been clouded by board members’ personal agendas rather than meeting the public good. This is evidenced by many members’ inability to check their personal interests, and in some cases employment relationships, at the door when making this decision. Those relationships weren’t disclosed in CMC’s conflict of interest documents.

In a letter from the attorney for Community to the Attorney General, he states that various partnership options were reviewed. I take great exception to this statement. Two highly qualified organizations were invited to make 30-minute presentations to the CMC board about partnership options. Thirty minutes for a $75 million decision – really? It is clear that the board was going through this step merely to check another box in hopes this would satisfy the AG. The organizations’ presentation times were then reduced to approximately 20 minutes each.

While UM is a solid education institution, depositing $10 million in its Foundation does not meet the cy pres requirement of providing funds that most closely serve the charitable purpose of Community. CMC was built through community support and community generosity. Funds from the CMC sale should be used for charitable purposes within the Missoula/western Montana community for the benefit of all its members. The future board tasked with making grants from the sale proceeds should be the entity making the decision as to which charities receive grants.

I am also disappointed that the CMC board voted to create another nonprofit organization. A new organizational structure creates yet more unnecessary administrative structures and cost centers which could be much more efficiently managed by partnering with an existing organization. Two organizations worthy of consideration are the Montana Healthcare Foundation and the Montana Community Foundation. They happen to be the two organizations the board gave 20 minutes each.

Finally, I have contributed to both UM and Community and a multitude of other charitable efforts in Missoula. When I gave to the hospital it was for health care. When I gave to UM it was for education. If I wanted my donation to the hospital to go to the university, I would have given to the university, and vice versa. That the board would not honor charitable intent is simply dishonorable.

As for the UM’s part in this deal, I feel they are absconding with funds that rightly belong to the poverty-stricken, the aged, the infirm, even the unborn of not just Missoula, but our entire region. UM’s acceptance of such a gift is unconscionable. To solicit and accept gifts from the willing rich is one thing, to take it from the unwitting and ignorant poor is quite another. Shame on you.

This money could have been a game changer. How about looking at the mental health issues and addiction issues we waste millions of dollars triaging in the ER and jail? Nope. I hope there will be some investigative journalism examining the process of how the CMC board produced this unfortunate outcome.

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A Thought Experiment

by lizard

I came across an interesting thought experiment I’m going to feature first before describing where I found it. Without any introduction, The Fish Farming Story:

As a thought experiment, let’s consider aquaculture (fish farming) in a lake. Imagine a lake with a thousand identical fish farms owned by a thousand competing companies. Each fish farm earns a profit of $1000/month. For a while, all is well.

But each fish farm produces waste, which fouls the water in the lake. Let’s say each fish farm produces enough pollution to lower productivity in the lake by $1/month.

A thousand fish farms produce enough waste to lower productivity by $1000/month, meaning none of the fish farms are making any money. Capitalism to the rescue: someone invents a complex filtering system that removes waste products. It costs $300/month to operate. All fish farms voluntarily install it, the pollution ends, and the fish farms are now making a profit of $700/month – still a respectable sum.

But one farmer (let’s call him Steve) gets tired of spending the money to operate his filter. Now one fish farm worth of waste is polluting the lake, lowering productivity by $1. Steve earns $999 profit, and everyone else earns $699 profit.

Everyone else sees Steve is much more profitable than they are, because he’s not spending the maintenance costs on his filter. They disconnect their filters too.

Once four hundred people disconnect their filters, Steve is earning $600/month – less than he would be if he and everyone else had kept their filters on! And the poor virtuous filter users are only making $300. Steve goes around to everyone, saying “Wait! We all need to make a voluntary pact to use filters! Otherwise, everyone’s productivity goes down.”

Everyone agrees with him, and they all sign the Filter Pact, except one person who is sort of a jerk. Let’s call him Mike. Now everyone is back using filters again, except Mike. Mike earns $999/month, and everyone else earns $699/month. Slowly, people start thinking they too should be getting big bucks like Mike, and disconnect their filter for $300 extra profit…

A self-interested person never has any incentive to use a filter. A self-interested person has some incentive to sign a pact to make everyone use a filter, but in many cases has a stronger incentive to wait for everyone else to sign such a pact but opt out himself. This can lead to an undesirable equilibrium in which no one will sign such a pact.

Now, for how I came across this little tidbit.

The thought experiment comes from a blog called Slate Star Codex, specifically from a post titled Meditations on Moloch which opens with a look at the Moloch section of Allen Ginsberg’s poem, Howl. Before yesterday I’d never heard of this blog. I stumbled across the link at Rigorous Intuition, one of the better online communities of conspiracy theorists centered around the author Jeff Wells. The guy who posted the link is Wombaticus Rex, an interesting fellow in his own right.

I didn’t want the content to be weighed down with the baggage of how I came across it, because I know how easily certain perspectives are judged and dismissed. But for those interested in looking deeper, any one of those links is an interesting thread to follow.




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