At the monthly meeting last week, the Board approved the formation of a task force that will make a recommendation on the financial viability and future of the hospital’s Skilled Nursing Facility (SNF).
SVH leadership had proposed closing the SNF as part of a plan to stabilize the finances of the hospital and restructure for the future. This would be an impactful and important decision for our community and for the hospital’s future. The board wanted to ensure we have all of the information needed, including encouraging community input, before a final decision can be made.
The board charged the task force with identifying ways to improve the SNF’s financial performance to make it sustainable, or recommending closure of the unit within a reasonable amount of time, based on its findings.
Board member Jane Hirsch will chair the task force, which will include both healthcare experts and community representatives. Other task force members include Leslie Lovejoy, RN, SVH Director of Case Management; David Streeter, MD, SVH hospitalist and SNF referring physician; Sabrina Kidd, MD, SVH Chief Medical Officer; Melissa Evans, RN, SNF Director; Susan Porth, SVH Finance Committee member; and two community members, Susan Idell and Maggie Haywood.
In addition, key SVH constituents and members of the SVH administrative staff will be invited to provide input to the task force, which is also exploring the possibility of involving a consultant with expertise in SNF financial and operational management.
Jane Hirsch will provide regular updates to the community via blog posts and press releases on the task force’s progress and plans an interim report to the board by the October 4 board meeting, which the public is invited to attend. In addition, the task force is planning on holding at least one study session for the public to attend and provide input as the group is examining the situation.
Quarterly Growth Report
The board heard a report from Michelle Donaldson, who leads the hospital’s business development effort, that reported progress in several areas while highlighting the need to carefully manage the business in the face of continuing reimbursement changes and tightening margins.
She reported that the hospital has organized services into nine service units which are treated as individual businesses for the purpose of reviewing costs, margins, and profitability. These are: Emergency, Surgery, SNF, Inpatient Care, Rehabilitation, Outpatient Diagnostics, Occupational Health, Special Procedures and Obstetrics. This analysis, if you’re interested, is available in the board packet for this meeting.
Donaldson reported that the hospital generated $1.6 million in new net revenue from these marketing and business development efforts in FY18. Volume growth was seen in pain management, ophthalmology, endoscopy and bariatrics; however, margins have declined in most areas.
This pressure on margins was reinforced in the financial report from CFO Ken Jensen, who noted that 77 percent of hospital volumes in June were from Medicare and Medi-Cal, where reimbursement rates continue to decline. For comparison, SVH reimbursements from these two sources were 74 percent in FY17, and the 67 percent in FY13. This continued increase in the percentage of hospital volumes from these two governmental programs creates significant ongoing financial challenges for our hospital.
Donaldson noted there will be increased emphasis in FY19 on Gynecology, Orthopedics, General Surgery, Urology and Cardiology.
Other Board Reports
County Supervisor Susan Gorin spoke at the meeting and updated the board on several county health initiatives. She asked for support in seeking California State funding to monitor and preserve Sonoma Developmental Center buildings and land while alternative plans for the site are being developed. Currently, funding to maintain the property ends in June 2019. Without additional funding, the site will deteriorate rapidly, causing both safety and security concerns for residents of the area. Supervisor Gorin asked our board and all residents of the Valley to send emails and letters to state elected officials urging their support for ongoing funding.
In her report, CEO Kelly Mather talked about plans for the coming year, including a concerted effort to move the hospital from a 4-star to 5-star rating from the Centers For Medicare and Medicaid Services (CMS). Not long ago, the hospital moved from a 3-star to a 4-star rating. The 5-star rating is CMS’s top hospital rating and there are currently no other hospitals in the Bay Area with that designation. She said the hospital is beginning an analysis of the quality metrics necessary to support this top rating.
Mather also reported that the hospital is moving forward with the design of a new Cardiology Center and updating the Master Facility Plan for the campus. She noted that UCSF collaboration is focused on Tele-Neurology and efforts to bring a world-renowned urologist to the hospital.
In closing, I’d like to welcome Dr. Sabrina Kidd, who attended her first board meeting in her role as Chief Medical Officer. She also serves as Medical Director for the UCSF affiliation. Dr. Kidd is a dual board certified colorectal and general surgeon who has been affiliated with the hospital as a surgeon since mid-2016. She replaces Dr. Robert Cohen who retired early this year.
Our next regular District Board meeting will be held on Thursday, September 6 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