Supervisors fire KMC CEO Paul Hensler

KMC CEO Paul Hensler was terminated from his job effective immediately, the county announced Monday evening, citing financial mismanagement.
BAKERSFIELD-Supervisors fired KMC CEO Paul Hensler Monday evening during a closed session, announcing the hospital owes the state $28 million dollars and it's losing more money every month.

"The Board has lost confidence in Mr. Hensler's ability to continue managing Kern Medical Center,"Supervisor Mike Maggard said in a written news release. "Accordingly the Board has terminated Mr. Hensler's contract immediately and he is dismissed immediately."

The financial problems were discovered by the hospital's new chief financial officer, Sandra Martin, who said starting in 2005 the state paid KMC more money than it was owed and the hospital has never paid back the difference.

In her 45 days in her position, she and a third party consultant discovered KMC owes the state about $28 million.  KMC also overestimated current revenues, leaving them with a $16 million shortfall, she said.

Supervisors said Monday the $28 million would not need to be paid back immediately.  But swift action was necessary: every month the hospital does not make cuts to its budget it will lose $1.6 million.  To remedy the problem, the board could either dip into reserves or revisit the budget and cut every department.

"It is unacceptable to the taxpayers of Kern County and to the Board of Supervisors that our staff could have reported to us information that is that wrong for that long," Maggard told 17 News' Katey Rusch. "We will determine who is responsible for that and make sure that we take steps to make sure it doesn't happen again."

To add to the troubles, KMC will not receive $35 million it thought it was was owed by the state, Martin reported.

Supervisor Leticia Perez was set to appear on 17 News at Sunrise Tuesday to discuss the impact KMC's financial troubles would have on the county's budget.

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