I would like to share some of the comments I made at our August board meeting to address misinformation about the hospital that has been circulating in our community recently, especially on social media, including attacks of a personal nature directed at both the hospital CEO and board.
The misinformation being spread includes claims that our hospital is badly managed and is about to go out of business, that new Medicare rules mean that hospitals will no longer be able to perform outpatient diagnostic procedures, that hospital employees are unhappy, and that our CEO and leadership team are over-paid.
None of these are true.
If you would like to review my comments, with detailed responses to these and other inaccurate claims, I encourage you to view this short video.
Let me assure you that, in the context of healthcare in 2019, we are doing extremely well. Our hospital provides high quality care, currently enjoys a stronger financial position than it has seen in a decade, and is operating with considerable success in a challenging reimbursement environment.
Let me share a few facts:
- Our hospital is solvent and ended fiscal 2019 in June in the best financial shape we’ve been in for many years (see the CEO Report section below for details). Over the last eight years, we’ve increased revenues by an average of three percent per year while keeping expense increases to two percent annually. The result is that operating margins have improved by almost six percent in that time.
- We’ve reduced debt by around 20 percent in the past three years, and will reduce that debt by around another 30 percent when the funds from the South Lot sale are received.
- Despite changing regulations aimed at reducing unnecessary diagnostics, and growing cost pressure from insurers, SVH diagnostic volumes have continued to increase. Contrary to what has been said, there’s nothing new in proposed regulations that will preclude hospitals from performing necessary diagnostic procedures in the future. Additionally, a CT scanner is required for our hospital to continue to provide emergency care. Our current equipment is at the end of its useful life and requires replacement. Our plan to replace the MRI and bring it into the hospital from where it sits today in a trailer, makes sense financially for both the community and the hospital.
- Our policy is to keep all staff compensation at the mid-point level in comparison with other hospitals of our size in our region. The CEO is treated exactly the same and the board reviews her salary and bonus structure each year and recommends adjustments to maintain it at the 50th percentile.
We are currently in the process of actively re-imagining what our hospital will become as we move into a very different future. That is not a simple task but we are confident. We have a talented management team and a board with an incredible amount of experience in this industry. Our hospital has done very well financially in the context of a very challenging healthcare market.
Critics who insist that a hospital perform financially like a non-regulated, private company are at best naive, and at worst, destructive. Among the many differences, no private company is required to serve all customers regardless of their ability to pay as we proudly do every day. We’ll continue to share how changes to medical practices, reimbursement policy and technology will shape how our hospital evolves over the coming years.
We always welcome community questions and I’m happy to meet with anyone or any group at any time. I know that all of my colleagues on the Board feel the same. All of our decisions are made after careful consideration and with the needs of the community in mind. I believe that we deserve your respect and I ask for that in our public discussions going forward.
Employee Engagement Survey
Lynn McKissock, the hospital’s Chief Human Resources Officer, reported on a recent employment engagement survey. To save money, it was the first time we conducted the survey on our own and not through an outside company, but we feel the results accurately represent employee opinions.
The survey, conducted anonymously, drew responses from 53 percent of employees, and show a staff that is highly engaged with their work and the hospital. The highest scoring comments – all around 4.5 on a 5-point scale – report employees feeling pride in their work, respect for their supervisors, and a sense of working as part of a team striving to exceed patient expectations.
As might be expected, lower scores were given in response to questions about pay and benefits, but even these were not that low – around 3.6. It’s worth pointing out that there were no comments from staff who reported experiencing any concern about the anonymity of the survey as some in the community have suggested. Anyone who has come to our hospital has experienced a talented and dedicated staff who love working in a community hospital.
Outpatient Diagnostic Center
We heard a report from Ron Peluso, project manager at Vertran Associates, the firm overseeing construction of the planned Outpatient Diagnostic Center. He said the project is moving ahead, on schedule and on budget, with construction on the new CT service scheduled to begin in December. The Foundation reports commitments for $17.6 million of the $21 million needed for the project. Again, we want to express our appreciation to the many donors in our community supporting this important project.
CEO Kelly Mather reported that the hospital ended FY 2019 with a small positive Net Income (prior to restricted contributions) versus a deficit of almost $3M in FY2018 (as referenced above). The hospital also ended the year with around $5.6M cash on hand and plans to retire an additional $3 million of debt shortly as a result of the South Lot sale. This represents a reduction of about 30 percent of total hospital debt. Mather also reported that through the transition of the Skilled Nursing Facility to Ensign, the hospital has been able to maintain the Hospice Care Room which is operated in conjunction with Hospice By The Bay, our partner in offering this important community service.
Next Board Meeting
Our next regular District Board meeting will be held on Thursday, September 5, at 6 pm in the Community Meeting Room, 177 1st St. West in Sonoma. The public is welcome to attend and public comment is always encouraged.
Chair of the SVHCD Board of Directors