The future of Natividad Medical Center is at a crossroads while the management consultant team hired to turn the hospital around financially awaits action on its business plan by the Monterey County Board of Supervisors. On Wednesday, Natividad interim CEO Tom Winston shared some thoughts on developments up to this point:

QUESTION: What has been accomplished since your arrival in November?

ANSWER: In December a number of colleagues from Huron came in and conducted a functional analysis. There have been a number of consultants here over the years, so we didn’t try to replicate what somebody else already crafted. We made a needs assessment, a snapshot of what we saw as the state of the hospital — what was good, what needed to be improved.

Q: What is the objective?

A: Our objective was not to try and place blame on any person or persons but to move forward in defining what could be done to make the hospital effective, efficient and smart. That’s the essence of what we’ve been trying to accomplish and I think we’re starting to see some success.

Our objective is to stabilize the organization and then to energize it.

The needs assessment and business strategies were presented to the hospital board of trustees and to the county Board of Supervisors.

Q: Provided that the supervisors approve your assessment, business strategies and an extension of your consulting contract, what kind of results can be expected?

A: We believe that over the two-year term of the contract we can generate a savings of about $11 million.

With respect to the additional consulting work of recrafting the hospital from the bottom up, our colleagues believe they can generate a savings of $18.2 million (annually) beginning this year and over the next 24 months. It’s going to take the better part of two years to reach that point. You can’t just get it overnight with one sweep of a magic wand.

It takes anywhere from six to 12 months or longer to work through to recraft processes and then changes begin to mature slowly.

Q: Can the hospital be saved?

A: We remain optimistic and confident that Natividad Medical Center can be fixed, from a financial perspective. Since I arrived here, I’ve been told by a number of people that the problems at Natividad are insurmountable. They are not.

Q: What presents the biggest obstacle financially to turning things around?

A: The biggest challenge we face is the possible changes in state and federal reimbursements.

There is executive action pending in the Bush administration to cut $3.8 billion in Medicaid reimbursements. That translates into cuts of $8 million a year for the next three years for Natividad. That $24 million loss would wipe out our savings made through the business strategies.

Q: Some staff at Natividad have complained they weren’t included in the process. Some even oppose the business strategies you’ve come up with. How do you respond?

A: I don’t view expressions of uncertainty or unhappiness at this stage of the process as bad.

There are going to be elements of our recommendations and observations that people will challenge and we may find that they were right, that our initial observations and conclusions did not depict fairly ‘what is,’ and we will adjust accordingly.

I would really be concerned if the people who’ve expended the passion and the effort weren’t upset. I think that is part of the change process.

Everyone isn’t going to buy in right away. Change is never easy. Natividad didn’t lose $25 million a year for the past several years by having things run efficiently, but the effort was there, the passion was there, even though the outcome wasn’t.

It’s not so much what was done wrong, but what could have been done better and smarter. We haven’t singled out anyone. We’re not trying to cite anyone as responsible. We’re not even focusing on the past other than as a precursor for what can be done in the future.

Q: Does Natividad have an image problem?

A: The staff has been emotionally hurt by press reports that indicate that Natividad is somehow failing in its obligation to patients. And even though that’s driven by the money problems, the staff take it personally.

We’ve got over 800 people out there working very hard doing what they think is the right thing.

Just today I had a physician in my office asking how we can engage the media in a
reasonable discussion of what else is going on at the hospital instead of always focusing on the negative.

The hospital is a source of great pride for many, and it should be.