Billing taxpayers to prop up a bad deal

The ongoing project to turn Lakewood’s publicly owned hospital into a private health center has a big price tag. Selling people a deal they don’t want is expensive: consultants, advertising, direct mail, etc. Add fees on top of more fees, and the asset write-downs of a no-bid deal.

Then quietly charge it all to taxpayers.

This has been the consistent story behind closing Lakewood Hospital, so far. It’s also the simplest, bottom-line argument for voting against the deal in November and introducing some fiscal discipline to a pricey boondoggle. The direct costs, alone, already run into the hundreds of millions.

For a real sense of the scale of this deal’s expense, it may help to start small and work up from there.

$300: the approximate hourly rate paid by Lakewood to Thompson Hine beginning in April 2015, “in connection with negotiations with the Cleveland Clinic Foundation and Lakewood Hospital Association, Inc., relating to Lakewood Hospital.” Between then and the negotiated deal announced six months later, a three-digit total of billable hours seems plausible, at least.

$50,000: paid by Lakewood Hospital Association—which officially existed to run a public hospital on our behalf—to a political group that opposed public input on the hospital’s future.

$75,000: the minimum which Lakewood paid to Huron Consulting, for a conclusion-averse study, whose authors apparently provided freelance political campaign work on the public tab, too.

$500,000: paid by Lakewood Hospital Association to Subsidium, for a study so inadequate that city council commissioned the Huron study to review it.

$78,000,000: anticipated costs of “winding down” operations of Lakewood Hospital. These costs are poorly explained at present—but according to Mayor Mike Summers, the Cleveland Clinic may pay only a small portion of them.

$80,000,000: an estimate of the fair market value of public assets which the Cleveland Clinic receives for free, under the deal, after subtracting the Clinic’s projected $40 million paid to Lakewood in return.

$134,160,000: the cumulative cost to Lakewood Hospital of nonspecific “administrative services” from 2002-14, during which time the size of these payments to the Cleveland Clinic somehow rose more than 700%.

While this listing is only an abridged survey of public costs resulting from the deal, it’s worth comparing it with the city’s entire annual budget of $120 million. How many ways could Lakewood be made better, with the money already diverted to this needless project to downgrade local services? How much more money will be wasted if we don’t apply the brake?

At a time when Lakewood is enjoying a renaissance on so many fronts this give-away of our most valuable public asset makes no sense.