altogether work for a situation that allows for continued financial viability and services and also the assurances that, quite frankly, we all want to have, that the organization is governed appropriately and is administered as such, so with that, i am first going to turn it over to lyon-martin. we have their board chair. their medical director, who was come unto previously, the executive director -- who was, until previously, the executive director. and we have another. they combined will goat -- go

through what is being implemented for lyon-martin, and then they will turn it over to someone who will talk about the overall entity for which lyon- martin contracts with, their ability to facilitate in student organization, -- and steer the organization. i will then come back and give essentially the city's investment in lyon-martin and how we are working to vote ri -- to right this ship. >> thank you for being with us. i first want to give a bit of a bio.

supervisor mirkarimi: your name for the record, please? >> winter. i have been on the board for about 3.5 years. i came about five years ago as a patient. i found out about lyon-martin because i was telling a friend of mine the problems i was having getting good health care. i have a great health care. i am a software engineer and have been one for over 20 years. but my doctor said to me one day, "i am not sure if i should give you a prostate exam or a breast exam." i said, "maybe we should look on the web." i know the transgender community, and i still cannot find anyone to take care of me.

this friend pointed me towards. -- towards lyon-martin. they are a well educated staff, and i had a decent doctor. i wanted to this organization to exist. i sought its value. i sought is a value to people like me -- i saw its value. i saw its value to people like me and others. a year later, i was asked to be chair, so that is my history. i am the first and only transgendered person on the board. i will go into more written statements now about the state of things. lyon-martin has been on the verge of extinction many times.

they have faced difficulties in getting money for services performed. as a result, they have been extremely cash poor. the board were shocked, however, to recently realize the full extent of the deterioration financially, including what was being done to make ends meet. a board of directors governing a community health clinic should know the right questions to ask and the right people to ask. to learn of these sorts of things at the time they are happening. the current board did not have that knowledge or expertise, so they did not ask those questions. for that, we take responsibility. thanks to the outpouring of financial support lyon-martin

has received from the community, many of whom are here, during the last few weeks, we have been able to hire consultants with the administrative, financial, and operational expertise to turn this clinic around. the board is committed to keeping this clinic open but only if it can be done sustainably. we cannot remain dependent on the generous outpouring in financial support the clinic has received from the community for the past few weeks. we believe that with significant changes in the way the clinic is structured and managed, there is a point in 2012 where lyon- martin should be able to establish sufficient income to pay its expenses and pay down debt. maintaining operations long enough to meet that. we have a turnaround team in place that is providing it lyon

-- that is providing lyon-martin with many directors. they have experience working with federal qualified centers in situations similar to the one that is being faced by lyon- martin. at this time, we anticipate that the turnaround team will be in place for several months, until the clinic's survival becomes more certain. at that point, we plan to hire a director and director of finance. the board welcomes its own a transition as well and has been actively recruiting new board members. pro bono legal counsel has been made available to anyone who would like to join the board. there are questions about

potential liability. given the current balance sheet, adding new board members has proven to be a challenge. we are confident that as the balance sheet improves, we will have an influx of new members to allow the current board to step down. another can break down the details for you and talk about the initial help required for lyon-martin to survive, but i want to take this opportunity to thank you and the community for helping us. we never imagined the community would be able to provide the clinic with the financial wherewithal to stay open these past weeks and bring these experts in in hopes of turning this around. a key for coming here today and for your continued support as the note -- thank you for coming here today and for your continued support for the

clinic. thank you very much. supervisor mirkarimi: thank you very much. anyone else from the lyon-martin clinic? >> i have been the interim executive director up until yesterday, when the new one took over. just to give you a sense of who i am, i am a physician. i trained at columbia and did a residency program in the bronx. i worked in new york for many years. i worked in san francisco as a director that is a federally qualified health center. i left after five years to come here to take a job at lyon- martin, which is why i came

here, and i have been at lyon- martin for the past five years. i was serving as two directors at the same time. this is training has to be leaders in california around health care. as a physician, i think i have a unique perspective on the patients that come to us and that sort of thing. our mission is to provide excellent health care to women in transgendered people in a safe and compassion environment with empathy to their gender identity, and we have always done that regardless of their ability to pay. about half of the patients were identified as l, g, b, orr -- or t, and then there are those that come to us because they

just like our care. there are some people love mental-health issues and find us a safe place to get their care. what i see going in to talk with patients a day in and day out is how valuable our patients feel our services are, how important they are, and lyon-martin is unique in that we are the only clinic in the country that focuses on lesbian and transgendered people. there is the nation's guy for how we provide health care for the next few years -- the nation's a guide -- the nation's guide for how we provide health care for the next few years. lyon-martin is a national model.

we have received an award for the care that we provide to the lesbian and transgendered community. i am going to give you a little bit of a sense of how we got to the place we are and then speak to how we move forward. one of the challenges is that we really do serve an underserved community. it is a challenging mix. about half of our patients are uninsured, over half, haute -- over half, and that means they pay us about $5 per visit on average. a visit osts about $300. during the time of 2009, 2010, when there was a downturn in the economy, there was also a failure in the management at lyon-martin, which led to a breakdown in our third party

billing and other issues. at the time, the clinic was extremely cash poor, and yet, the clinic continued normal operations. executive management resorted to various a desperate measures in an attempt to stay afloat, and the board was not aware of the actions that were happening at that time. all of this really came to light in early december, when we sat down and said, "where are we?" it became clear. what i will say is that i feel very honored to work at lyon- martin. i am very lucky to have that job, but it belongs to the public. there is no way we could have survived without the help we have received financially and otherwise from the community, and we are incredibly grateful for that.

the donations we have received have allowed us to stay open. however, we will not be able to stabilize this without bringing in turnaround specialists and other experts in the field in order for us to maximize our reimbursement for services and provide consistent leadership. without the community support, we would not have been able to bring them in, and we have started to do that, which is exciting. i will turn it over to our turnaround executive director. i will turn it over to our consultants, who has been very helpful to move forward. >> she really is excited about him being here. good afternoon. my name is jean. i am a registered nurse. i started working in the community about 1986. i helped run a network of health

centers, similar to the consortium, including in bernie lo county, and about five years ago, -- including in yolo county. i have been involved for about a month now working very intensively with lyon-martin and their board and their staff and their legal counsel, and it is clear that the responsibility is a shared responsibility, between the executive director, management, in the board. as you may have heard, there is over $1 million in debt in both long-term and short-term debt, some of which must be addressed immediately, and other parts of that debt could be paid over a longer time.

the $300,000 that has already been raised has been used to support mission-critical expenses, such as rent and salaries, some consulting costs, laboratory fees, other operational expenses. as we kind of transition some of these programs to other agencies and to retain the consultants to assess the financial situation, it has been a very dynamic and fluid time, and we have been running as best -- as fast as we can. financial analysis has shown that without an immediate infusion of cash in the amount of about $500,000 by month's end, the clinic will be in a negative cash flow again. based on current cash budget projections, the clinic needs a cash infusion to operate, pay down the debt, and have a reserve adequate to carry them through the months when cash

will not meet their expenses. the board is committed to keeping the clinic open. if it can be financially stable. in order to do this, cash has to come in and be raised now. if not, bankruptcy will need to be filed in a timely fashion where there is still cash to be able to transfer patients and cease operations. we do have a closure plan, should that be necessary, and we have been working closely with the department of public health, should that have to happen, and also, the san francisco clinic consortium has been extremely helpful in providing their staff as well as their leadership to help us work through some of our issues and identify some of where the problem areas are. we are hoping to smoothly transfer patients to other places if that becomes necessary, but, obviously, that is our very last resort.

throughout these past weeks, the staff has continued to put patients first. it is amazing to me. i have spent time in the clinic. you would never know that there was a crisis of this magnitude going on, watching the staff, taking care of the patients. to me, it has been a unique experience. i have not heard a lot of talking in the background and the exile -- anxiety. they are business as usual. the board is meeting as needed and taking full responsibility for their government's responsibility. accountability and verification of information. they are authorizing a, preauthorize and all expenditures. they put on a hiring freeze. we have worked together, the board, the staff, the consultants to bring in a turnaround team and implement a turnaround plan note -- plan,

which understand you have a copy of. -- which i understand you have a copy of. we fully intend to comply with those requirements. the clinic's turnaround plan has begun. the first step was hiring an executive director with experience, and the board has done this. the board has also entered into a contract with a firm to provide consulting and accounting staff. i now take great pleasure in introducing you to the new executive director of lyon- martin health center. supervisor mirkarimi: welcome. >> this is literally my second day as executive director of

lyon-martin. i have a 25 to 30-year history working with many sides, including the health care side, and in the last 15 years, i have focused on community health centers, such as lyon-martin. i will not repeat the details already said by others. i will say that i am in the process at looking very deeply into the analysis and the details that supported the letter that came forth from financial consultants that provided the assessment. i will be working very closely with the executive financial team. their cpa will be on our team

saying. we will get an assessment of what we find. we do have an established leadership team now. we will be focusing on specific areas that need to be addressed at the health center. all of this work in partnership with the community, and i did attend a town hall meeting last night and committed myself to that organization, to this community, that i will be totally visible and transparent with the information as it comes forward, and i will also mindy mizell visible to any efforts, fund-raising efforts, information sharing -- and i will also make myself visible to any efforts, fund-raising efforts, information sharing. i will commit to you that by march 12 of this month that i will have a very detailed budget and financial analysis that will be presented to the board and

also be shared with you and with the community. the $500,000, the assessment that came forward, i still have to go through the details. i have to work with the consortium to understand. if we had to break down things, we are looking at an amount set -- an amount that includes about $250,000 from the public and more from private foundations. this is just a very preliminary breakdown. again, we have to look very closely at our analysis and at what the emerging plan will be. you heard from jean that there is an exit plan in place. i believe that the team and the board members are well versed at this point in the direction we

need to take, and we will work towards it. thank you. supervisor mirkarimi: thank you very much. we appreciate it. now, we will go to the clinic consortium. >> i and the ceo of the clinic consortium. we are -- i am the ceo. there is a total of 80,000 patients. there is also federal funding for health care for the homeless. part c of a community-based grant. we contract back out to various clinics, including the department of public health. dph and some clinics in san francisco, including lyon- martin.

there is a differential in medicaid payment. the rates are pretty substantial. they went from about $9 million per year. personally, i have been at the consortium for about 20 years. i trained as a clinical social worker, clinical psychologist. before that, that is too far back to even talk about. lyon-martin is a founding member of the consortium. they are on our board. they are not allowed to vote. they must abstain. our board chair is also here to address any concerns you may have. how did we get there? how did we get to where we are

today? some background. prior to this, there was a meeting in december of top officials. "i want to know what is going along with a gay and lesbian and transgendered health care in this country." we have a clinic in san francisco that is the only lesbian and transgendered clinic in the country. there are other clinics. this is the only one with the primary purpose of lesbian and transgendered health care. the day that this whole thing broke was the day that we were hosting the administrator here in town, and the surgeon general would be in san francisco in two weeks. a reflection to how did we get there. the lyon-martin board are very

committed. they were among the first to create open access. clinically, we have no concerns. what we see is a group of good intended board members, good intended staff who did not have what was needed to be done. this is, unfortunately, something we are seeing in clinics across california and across the country. the increasing demand for service, 50% uninsured, is an unsustainable model. it is hard when a patient calls to say, "sorry, we cannot see you because you do not have the insurance." a poor payer mix. in addition, over the last several years, the california

state legislature eliminated funding. a loss of $33 million across the state. lyon-martin also had budget cuts in the past. the department of public health eliminated the funding that they were getting. the women's commission said, "we need to support this clinic." so the consortium which funds the clinics with this money, and only part. we only give them part of the money. assessments in preparation for the health care reform, to go in and look and see, because we know that the current models are going to transition. hsf consultants called and said there were significant financial system problems in lyon-martin.

they had a receivables system that did not have aging and receivables of over $900,000. the clinic did not have an appropriate right of policy, so everything that they note -- did not have an appropriate write- off policy, so everything that they had, they kept riding down -- writing down. it looked like they would be financially viable. it was a financial system that was not there. we went ahead with consultants

with familiarity and did a complete financial system assessment. we now have that information. one of the first things we did is precontracted -- we contract it -- contracted with a company to go and do back billing. $250,000. one office attempted to work to see if we could go back further than one year. however, because of regulations with matching funds, they could only go back that far. the consortium, which has four accounting staff, we took our staff and started to let at all of the financial systems, except for the financial accounts receivables, which

still need to be fixed. and the budget. we did bank reconciliations. and we did it together. this is not about the consortium. this was a team approach. others have stepped forward to say, "what can we do." they have also offered technical assistance. they understand that they will have to discharge some healthy san francisco patients. we are working to determine where and how and then looking to see how it can also be increased. we had conversations with the health plan board, and we are looking at a pair