Financial questions remain
Monterey County Herald
By JIM JOHNSON
January 28, 2014 - After impassioned pleas from Natividad Medical Center supporters, the Monterey County Board of Supervisors unanimously voted Tuesday to support the hospital's plan for the area's first trauma center, despite questions about the financial impact.
By a 4-0 vote, the board approved Natividad's plan for offering advanced trauma care despite conflicting information regarding whether the county-owned hospital would be able to earn a profit on the new program. There was also a late push by Salinas Valley Memorial Hospital officials to tie an affiliation with Natividad to the trauma center approval.
Supervisor Dave Potter was absent.
Supervisor Lou Calcagno said he would support the Natividad plan despite reservations about the cost of the program. Hospital officials are projecting a loss of as much as $9 million this fiscal year. The program includes adding nearly 70 positions and spending $2 million per year on capital needs.
Calcagno said the county would "proceed cautiously" with the trauma center implementation plan. He called for hospital officials to deliver quarterly financial reports to the supervisors in open session.
Calcagno and Supervisor Jane Parker asked Natividad CEO Harry Weis and other hospital officials a series of pointed questions about the financial projections, particularly about varying revenue estimates from the hospital, independent consultants and county analysts.
Natividad has estimated the program would yield earnings of $13.6 million per year when fully implemented, and two consulting companies have projected annual profits of between $3.5 million and $5 million. The County Administrative Office predicted the hospital could lose as much as $788,000 per year through the program.
Weis acknowledged Natividad is headed toward a large financial loss this fiscal year, blaming it on a "big investment year." He said that will come out of the hospital's reserves, but said he expects the bottom line to recover quickly.
Natividad's plan calls for the trauma center to be set up over 11 months, with full accreditation by the start of next year. The accelerated timeline is because of a delay in the supervisors' review of the plan about concerns about the program's effect on the hospital's finances.
As a Level II trauma center, Natividad would provide treatment to patients who are now taken to the San Francisco Bay Area. The new center must have around-the-clock access to trauma staff, equipment and expertise seven days a week.
In a letter to the supervisors last week, Salinas Valley Memorial Hospital's board of directors raised questions about Natividad's financial capacity to establish a trauma center. It proposed a formal affiliation between the two Salinas hospitals and called for continued review of the Natividad plan.
The public district hospital lost out to Natividad in a competitive county-led review process aimed at evaluating which of the local hospitals is best positioned for a trauma center.
On Tuesday, Salinas Valley Memorial CEO Pete Delgado and board president Harry Wardwell spoke before the supervisors and touted the benefits of a collaboration between their hospital and the county, though they didn't mention delaying the trauma center decision.
The board's decision appeared to be a given after testimony from hospital employees and labor leaders, who urged the supervisors to move forward with Natividad's plan. They argued the supervisors had already chosen Natividad when they followed an independent review panel's recommendation, and suggested that any change of heart would indicate county officials had engaged in "backroom" dealings on the matter.
They blasted Salinas Valley Memorial officials for "playing politics" with a critical health issue, and argued the hospital's interest proved the financial viability of a new trauma center.
But Calcagno argued that Salinas Valley Memorial officials should be spared some criticism because they helped save Natividad from disastrous financial losses that nearly resulted in the county hospital's closure.
Supervisor Fernando Armenta said Natividad employees had just as much to do with the subsequent recovery, and the county would likely have found a way to save the hospital anyway.
Supervisor Simon Salinas said a potential affiliation with Salinas Valley Memorial was a separate issue from the trauma center, and Natividad should be allowed to move forward while the county keeps a close eye on its finances.
"Time is of the essence now," Salinas said. "Any more delays will set (Natividad) up to fail. We need a trauma center. Natividad has won the right to proceed."
· The board delayed the reappointment of Planning Commissioner Martha Diehl for a few weeks to allow Potter to weigh in on one of his own proposed appointments. Diehl has been criticized for her Carmel Valley Canine Center project, which is under county review.
· The supervisors approved a fourth one-year extension for ambulance provider American Medical Response.