Criteria drafted for evaluation of prospective partner; web resources available to the public
SALINAS, CA, January 5, 2012: Salinas Valley Memorial Healthcare System (SVMHS) is looking for the public to weigh in on the prospect of affiliation with another healthcare organization. SVMHS has drafted an initial list of criteria to be used in evaluating a potential partner, and it is hoping that the public will review that document and offer input. The list, available on the hospital website at www.svmh.com/affiliation, features eleven criteria developed by the Healthcare System.
Salinas Valley Memorial Healthcare System may consider an affiliation partner that:
- Can ensure that SVMH will be a high quality, full-service, cost effective health care provider for the residents of Salinas and Monterey County and will preserve significant local involvement in hospital governance;
- Has a strong cultural compatibility with SVMH;
- Will enhance SVMH’s ability to recruit and retain high quality medical staff and to adapt to evolving physician practice models;
- Will enhance SVMH’s access to capital to fund needed medical technology, equipment, health care information systems and a long-term capital plan for a new hospital facility;
- Can achievecost efficiencies via overhead savings, group purchasing contracts, improved clinical efficiencies and improved labor utilization;
- Will provide SVMH with contracting capability and capital to successfully participate in risk sharing vehicles (such as ACO’s) for managing the health care of patient groups;
- Will bring improved accounting and decision support tools to evaluate new and existingservice lines to achieve clinical and financial efficiencies;
- Will provide resources to improve employee and union relations;
- Will provide enhanced board, management, medical staff, and employee continuing education and career development;
- Will maintain continuity of existing charity care policies; and
- Offers attractive financial terms including fair market value consideration and certainty of success.
SVMHS is also holding a community meeting on Thursday, January 12th to discuss the potential affiliation, where a representative of Cain Brothers--the company retained by SVMHS to assist in this process--will make a presentation. This is the second community meeting on this topic. The first was a Town Hall meeting held last October.
“We are proactively addressing the issues facing this hospital,” said Lowell Johnson, MBA, FACHE, Interim President/CEO of Salinas Valley Memorial. “The people of this healthcare district will ultimately decide the direction for this hospital, so it is important that they are engaged from the very earliest stages, which is where we are now.”
Salinas Valley Memorial, like hospitals across the country, has been facing financial challenges recently. Last year the healthcare system lost $7.4 million from operations. In the first five months of the current fiscal year, the loss from operations reached $8.7 million. A number of factors have contributed to the financial decline, including a $42 million unfunded state mandate for seismic upgrades, a $20 million unfunded federal mandate for an electronic health record system, a decline in patient volume due to the recession, an increase in charity care, and lower reimbursement for services from insurance companies and government programs. As it looks to the future, SVMHS will have to address the need for a new hospital building, as the seismic upgrades just completed are only effective through 2030 under current California law, at which point SVMHS will have to build a new hospital building.
“Board members have expressed a preference to remain a stand alone hospital,” Johnson said. “The question is whether that is viable in the current healthcare climate, and if it is the best option for the healthcare district.”
Resources are available to members of thepublic who want to learn more about this issue at www.svmh.com/affiliation. There you will find the list of affiliation criteria and the means to provide input; video of a presentation to the SVMHS Board of Directors made by a representative of Cain Brothers, and a presentation made to the public during the October Town Hall.
Thursday, January 12, 2011, 6:30pm
Cislini Plaza Conference Room
Salinas Valley Memorial Hospital
450 East Romie Lane