In the past 10 years, instability and financial troubles have plagued Natividad Medical Center in Salinas. But in just the past seven months, the Monterey County-owned hospital has undergone a startling transformation - including a financial turnaround of $17 million - and its newest chief executive officer says he's going to keep the improvements on track.

William Foley is the fifth CEO since 1996 to serve at the hospital. He is an employee of Chicago-based Huron Consulting group, which has a contract to revamp Natividad's operations and restore it to financial balance. Foley replaced Thomas Winston, also a Huron employee, in April when Winston left after less than six months at Natividad.

As Winston prepared to leave, county officials said a new manager with different communication skills and experience was needed to implement major changes to the hospital's operations.

Natividad staff say they've already seen a difference with Foley. Since his arrival, he's made it a point to meet with those who work there, night and weekend shifts included.

"I just think it's important as a leader of the hospital to engage the staff, to know them and to have them get to know you," he said, "and I think my style is very open. I think I am accessible to people at all levels of the organization."

Before coming to Natividad, Foley was president and CEO of Provena Health in Illinois. He led turnaround efforts there and also in Arizona at Catholic Healthcare West in Phoenix.

The contract between the county and Huron ends in 2008, at which time a new permanent team of top hospital administrators will lead Natividad after being selected and trained by Foley and other hospital officials. The county is paying Huron $5.1 million for its services. Salinas Valley Memorial Healthcare System and Community Hospital of the Monterey Peninsula are both contributing an additional $8 million to cover the costs. Just as when Winston was CEO, the county will pay Huron the same fees and salary of $50,000 a month for providing Natividad with a chief executive.

Liz Lorenzi, a trustee and senior vice president of physician business development for SVMH, said it's challenging to make lasting improvements to Natividad's culture and to rebuild relationships with the community, but she expects Foley is up to the task. "I think Foley has that skill set and personality," Lorenzi said.

Foley has union's nod
The union that serves the hospital's nurses and healthcare workers has been meeting with Foley to talk about the effects of the changes on its workers, said Lena Valdez, Service Employees International Union Local 521's director of operations for San Benito and Monterey counties. Valdez said the union feels he's been responsive.

"Only time will tell how employees and services will be impacted," she said.

Huron consultants have already made significant progress in addressing Natividad's financial troubles by cutting losses by $17 million, mostly on the revenue side.

Foley said the hospital's interim chief financial officer, Harry Weis, deserves most of the credit for that. Weis led the charge on providing better training and management for the hospital's billing and collecting, he said.

"It's about improved policies and procedures and teaching people to do it accurately and appropriately," Foley said. "It's good management."

By the end of the year, he said, he and his team will have completed a strategic plan for the hospital detailing exactly how Natividad administrators should work on getting more services there - and more patients.

Supervisor Dave Potter, who filled in for Supervisor Jerry Smith on the Natividad Board of Trustees this spring, said a seamless transition between Huron and the hospital's permanent leadership is critical to the medical center's success. Moreover, Foley's inclusive management style and strategic vision, Potter said, have already shown Natividad's turnaround is on the right track. "Foley has a much more strategic approach (to running the hospital) than I've seen with any other CEO to date," the supervisor said.

Predictable, if not profitable
The ultimate goal for Huron at the hospital is make it a financially stable place, Foley said. That doesn't mean the hospital will every be profitable, Foley said, but he wants to leave the county with a public hospital that will have smaller, predictable deficits of $5 million or less, or break even.

"What the county wants is to minimize the deficit as much as possible and make it predictable," Foley said.

Additionally, the county's subsidy to the hospital will be less than in previous years: It was $20 million last fiscal year, is $11 million this fiscal year and will be $6.2 million for the next fiscal year, starting July 1.

Foley's plan for the hospital during the remainder of Huron's contract is ambitious. He said he wants Natividad to provide more surgical services, expand services the hospital provides to attract more patients, and recruit more physicians in specialized areas of medicine such as obstetrics and gynecology.

Marc Tunzi, Natividad's chief of medical staff, agrees, saying that the hospital needs to see its overall volume go up and that providing more clinical services can help. Tunzi also said Foley has been well received by medical staff because of his "easy-going" manner and accessibility.

Foley said the hospital's patient volume has fallen in recent years and the hospital has also lost physicians, and needs to work on establishing stronger relations with the county Health Department and clinics, which can provide patient referrals to the hospital.

"We are going to be working together (with the health department) through the strategic planning process to look at other healthcare models in other counties where they are more aligned than we are," Foley said.