Marianas Variety

Last updateSat, 25 May 2019 12am







    Friday, May 24, 2019-11:22:14A.M.






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Another state of emergency declaration for CHC

GOVERNOR Eloy S. Inos put pen to paper last Friday, placing the Commonwealth Health Corp. under a 30-day state of emergency for the 13th consecutive month.

The two-page declaration dated March 1 contained five reasons for the order that were carried-over from previous declarations, including a failure to pay vendors and the possibility of federal decertification by the Centers for Medicare and Medicaid.

Inherent in the emergency order is the authority to reprogram government funds and “suspend pertinent statutory or regulatory provisions as required.”

The word “suspend” is key and sparked concerns in hospital corridors and the community.

According to Attorney General Joey Patrick San Nicolas, the declaration allows the governor to assume all the powers of CHC as well as to suspend its board of trustees, but he cannot dissolve the body.

Possible suspension of board activity comes at a pivotal moment for CHC; the board’s finalization of its legally mandated performance evaluation of the chief executive officer.

During last month’s CHC board meeting it was announced that CEO Juan N. Babauta’s evaluation would be finished and presented at a meeting scheduled for this Thursday.

However, this week’s trustees’ meeting was postponed for two weeks until after the exit of the federal technical assistance team currently working at CHC.

Heading off disaster

It’s no secret that board members’ opinions concerning the CEO have soured during the last year.

In each successive meeting the board’s comments have grown more pointed in connection with Babauta’s executive performance.

During the February meeting, vice chair Pete Dela Cruz labeled CHC “dysfunctional” no less than six times.

Director of medical affairs Sherleen Osman told Babauta he was as CEO “practically invisible [in the hospital]” and “Decisions do not come down very easily [from the CEO] and lots of times we’re left in limbo as to what to do.”

Staff-elected board member Anthony Raho told the CEO, “We’re here to ‘advise’…we can’t hold your hand at every step…you need to make some tough decisions.”

Such on-the-record observations coupled with the even more critical comments made off the record pointed to a less-than-glowing performance evaluation.

In the first few days after the resignation of Gov. Benigno Fitial, who appointed Babauta, hospital observers noted the CEO’s deflated mood and his mention of resigning.

But the CEO’s confidence returned last week and may well be attributable to federal support.

In a flurry of interviews during the last few days with Variety, a wide range of CHC stakeholders detailed the behind-the-scenes politicking, pressure and meetings concerning the CEO’s continued tenure.

All sources requested anonymity because they were not authorized to speak officially on the subject.

A bid to save Babauta

In one day, newly-sworn-in Inos met with Babauta then called in all on-island CHC board members for a discussion.

Inos asked the board members if they would agree to push back the release of Babauta’s performance evaluation by two weeks so that the CEO could focus on working with the soon-to-depart federal assistance team.

Babauta told Inos he had had “no time to complete the self-evaluation for the board because he was too busy with the feds and the governor and the board felt that was a reasonable position, so we agreed to a board meeting later this month,” said a CHC trustee who attended the meeting.

Moreover, meeting attendees said Inos encouraged the board to keep moving toward completing the CEO’s evaluation.

According to Public Law 16-51, which established the Commonwealth Healthcare Corp., the governor is required to accept the board’s evaluation and recommendation to extend or terminate the CEO’s contract.

Board members were upbeat about the meeting with the new governor and believe the evaluation process will continue without interference or obstruction.

However, CHC’s trustees may be in for a real shock if contrary opinions prevail.

Federal pressure

Running in opposition to the seemingly inevitable critical CEO evaluation is the federal government.

Numerous sources contacted Variety to talk about the “pressure” on Inos and Capital Hill to protect Babauta.

Island concerns about federal meddling in local decisions seem to be well founded as federal officials, both publicly and off-the-record, confirmed their position backing the current CEO.

During a January visit both Eileen Sobeck, acting deputy assistant secretary for the Interior, and Sally Howard, chief of staff to Health and Human Services Secretary Kathleen Sebelius, doubled-down on support for Babauta.

Howard emphasized a consensus between the federal and local governments that “utilizing and nurturing local resources [people] was the best way forward.”  

Interior spent $170,000 only months ago on a HealthTech assessment that recommended replacing many on the CHC’s leadership team with experienced professionals.

During background conversations with Variety over the weekend the justifications kept coming.

Asked again why the most pivotal piece of advice in the HealthTech assessment was being ignored, one federal official raised the issue of bias.

“The report was flawed and suspect because HealthTech turned around and bid for CHC’s management contract.”

Variety pointed out the same strong criticism of the CEO contained within the federal CMS site survey of last September.

“The governing body must appoint a chief executive officer who is responsible for managing the hospital.

“This standard is not met as evidenced by: observation, record review, and interview, the governing body did not appoint a chief executive officer who was responsible for managing the hospital,” states the CMS document.

Explaining its own sub-standard evaluation, a federal official said, “CHC’s problems were caused by a lack of funding…CEO Babauta has done a great job and has our full support.”

Asked to name one accomplishment of the CEO during the last 14 months, the official was speechless.

“I can’t…it’s been a long week, I’m tired…ask for a copy of the weekly report from the federal team at CHC…it lists all the CEO’s work.”

On the subject of Babauta’s lack of support from the board and staff, the official replied: “The doctors are whiners and complainers offering no solutions…the CEO is trying to hold them accountable for the first time and they don’t like it.”

Reactions to the comment by CHC medical staff were infused with fury.

“What a joke! We make peanuts…we don’t even get paid for on-call shifts and because of the physician shortage many of us are, in reality, on-call 24/7/365,” said one physician.

A second doctor was actually speechless for a few moments before saying: “Yah, lazy us that’s the problem…go ask the D.C. feds [what] Babauta’s nickname in the hospital is….”

Above and beyond blaming lack of funds, staff resentment and “personality conflicts” for CHC’s failings, the feds went on to explain their support was also a function of timing.

“You don’t change horses mid-stream…we think the CEO can sustain the changes and improvements made during the last two months by our federal team.”

Additionally, they highlighted the “virtual mentoring” the CEO is receiving from federal experts.

Variety has attempted several times to access details of this program and how it works, but no one seems to want to divulge details or how it’s a substitute for years of hands-on experience that hospital executives are expected to possess.


In light of the current maneuvering that includes last Friday’s state of emergency, federal dismissal of the board’s importance and their support for Babauta many are wondering if the governor will be forced by intense financial pressure to keep the CEO in place.

As a federal official said, “We’re paying the bill and Babauta stays.”

When asked what would happen in a showdown between CHC’s board and federal agencies over the CEO, a government employee said: “Perhaps the governor will sideline the board, dissolve it or simply ignore the CEO evaluation…. The board is part of the problem and needs to get out of the way.”

Pushed for a response about the board’s legally mandated authority to present the governor with a CEO contract recommendation, the answer was obvious, at least to the federal agencies: “That’s what emergency declarations are for.”