Some in our community have asked why we need to invest in new imaging technology when changing regulations will soon require justification for CT and MRI appropriateness, which may impact our volumes.
The simple answer is that we have no choice if we want to keep our ER doors open.
And it’s also a good business decision.
Here are the facts:
- The CT equipment that we are currently raising funds for is required for us to maintain the Emergency and Hospital license. Regulations require us to have a CT unit available 24/7.
- Our current equipment is over 10 years old and must be replaced. The average useful life for CT and MRI machines is around eight years, and many hospitals replace them sooner because the technology continues to improve. Our equipment is at the end of its functional life and new CT and MRI units will provide significantly enhanced imaging capabilities.
- Convenience and access to an outpatient CT in our community is highly important to our patients and physicians. Without it, patients must drive over 30 miles to the nearest free-standing imaging center. Equally important, patients benefit because the quality of our radiologists and images are top notch because we are a hospital.
- Diagnostic imaging services generate much-needed revenue for the hospital. We are doing everything we can right now to make the hospital financially sustainable and having a local MRI is essential to this. We have projected that the new Outpatient Diagnostic Center will increase net hospital revenue even considering new payer restrictions.
- We are already losing revenue due to dated technology. There are several MRI scans physicians order that cannot be performed at SVH today and must be done at UCSF because they have a modern 3T MRI. With the UCSF partnership, we project that many of their North Bay patients will use SVH for services, but only if we have a 3T MRI such as the one we are planning.
Recently, several health plans have tried to direct their patients to free-standing imaging centers. However, our volumes in MRI and CT have gone up every year and have seen an increase in 2019 over 2018, so we are confident in the continued viability of our imaging services.
The many donors who have contributed to the new Outpatient Diagnostic Center understand that the main goal of this capital campaign is to maintain Emergency services and increase revenues by upgrading this critical diagnostic equipment and improving patient access to it. They know it is a good investment for our community and will help to secure the future of the hospital.
We are making good progress. We ended FY 2019 much better than budget and much better than previous years due to the positive changes we have made, including right-sizing the hospital and streamlining a number of services. The new Outpatient Diagnostic Center, with its new technology, is an important step in meeting our commitment to our community and moving toward financial sustainability.
In good health,
President and Chief Executive Officer
Sonoma Valley Hospital