Open records show that El Paso Children’s Hospital CEO Cindy Stout and University Medical Center of El Paso (UMC) CEO Jacob Cintron celebrated the appointment Nicholas Tejeda as the Market CEO of the Hospitals of Providence in April 2018. Their celebration of Tejeda’s appointment centered on Tejeda’s lack of “experience”. Tejeda oversees Tenet’s health care network in El Paso. One of the entities under Tejeda’s domain is The Hospitals of Providence Children’s Hospital, a competitor of El Paso Children’s Hospital.
Pediatric Growth At The Expense of Providence
It took five feasibility studies to show that El Paso Children’s Hospital could be financially sustainable in El Paso. Although the feasibility reports showed that an El Paso Children’s Hospital was not financially sustainable, the fourth report, the Kurt Solomon Study, added the caveat that a taxpayer-funded children’s hospital would need to take patients away from the for-profit hospitals to be viable.
In 2004, Providence had 41.12% of the pediatric market in El Paso. Their market share, combined with Del Sol and Las Palmas, accounted for about 72% of the pediatric market in El Paso. To make a taxpayer funded children’s hospital work, it needed to take the market away from the taxpaying competitors in El Paso.
As non-profit hospital owned by UMC, a taxpayer-funded entity, El Paso Children’s Hospital does not pay property taxes. By taking revenue patients away from for-profit hospitals, El Paso Children’s Hospital reduces the tax base in El Paso.
In 2007 El Paso Children’s Hospital received $120 million in voter approved money to build a children’s hospital. The hospital opened its doors in 2012 and promptly filed for bankruptcy in 2015. When it emerged from bankruptcy later that year, it was fully owned by UMC.
But the problem remained, to be financially viable, even with taxpayer funds, the El Paso Children’s Hospital needed to take pediatric patients away from the for-profit hospitals, like Providence.
The Text Message
In a text message on April 23, 2018, CEOs Cintron and Stout discussed the appointment of Nick Tejeda as the CEO of the Providence hospitals.
In the text message,
Jacob Cintron writes to Cindy Stout that he is “not complaining” about the appointment of Tejeda as CEO of the Providence hospital group, because they “can use his inexperience to grow” El Paso Children’s Hospital.April 23, 2018.
Cintron was looking to take more pediatric patients away from the Providence children’s hospital to prop up El Paso Children’s Hospital at the expense of a taxpaying for-profit hospital. From the comments on the text message exchange, Cintron and Stout were hoping to use Nick Tejeda’s “inexperience” for El Paso Children’s Hospital’s financial wellbeing.
When the children’s hospital bond was being voted on, Providence published an open letter in the El Paso Times on November 4, 2007. In it, Providence was reminding El Paso voters that El Paso already had a children’s hospital, Providence. The newspaper advertisement explained that “there are not enough patients” for another children’s hospital in the city.
The bond measure was approved by voters with a margin of 733 votes.
The bankruptcy exposed the lack of revenues because of the low numbers of patient services delivered by the hospital. The text message exchange appears to suggest that the appointment of Tejeda in 2018 provided UMC, the owner of El Paso Children’s Hospital, the opportunity to siphon more pediatric patients from Providence.