Natividad Medical Center Press Release - July 24, 2007
Natividad Seeks Increased Funding Huron fee More than Double Early Estimate

Monterey County Herald, Herald Salinas Bureau, July 24, 2007
By Jim Johnson

A proposed extension for an information technology consultant at Natividad Medical Center would push the cost of a two-year contract between Monterey County and Huron Consulting Inc. to about $7.5 million.

County supervisors today will consider extending a contract with Michael Jobin, the hospital's interim Information technology director, through November 2008.

Jobin was hired in January to provide technology consulting services for a nine-month period ending in September, or until a permanent chief information officer could be hired.

Hospital officials are now suggesting it will take another nine to 13 months to find a permanent replacement for Jobin, who is earning $32,000 per month or about $374,000 per year plus expenses.

The extension would cost up to $507,000 more through November 2008.

Interim chief executive officer Bill Foley said Jobin's extension is also necessary because work on separating the hospital's information technology system from the county's will last longer than expected, and Jobin is a key part of that effort.

Foley said separating the two systems, which Huron has recommended as part of the management team's streamlining efforts, will save money through operational efficiencies in the long run.

"It's just taken longer," Foley said. "It's still not totally done."

Supervisor Dave Potter, interim chairman of the hospital board of trustees, said there is a strong consensus among Natividad physicians and medical staff that the hospital "needs to be its own master," separate from the county.

But Potter acknowledged that rising costs associated with Huron's contract are a concern. He said he wants to see a running tally of interim management costs compared to ongoing savings at Natividad.

"That has been a major issue of mine," Potter said, noting there are several other hospital-related spending items on the supervisors' agenda, including an increase in Natividad managers' salary ranges. "We want to be able to recruit, but we don't want to be exorbitant, and the same way with Huron."

If the supervisors approve Jobin's extension, it will mean the original contract will have more than doubled in about nine months since an interim management group from Huron subsidiary Speltz & Weis took over the county-owned hospital's operations in November.

The group was hired to improve the fiscally-stressed Natividad's bottom line. Speltz & Weis has since been replaced by Wellspring Management, and original interim Chief Executive Officer Thomas Winston has been replaced by Foley.

County supervisors originally approved a $3.33 million contract with Huron through November 2008, but county officials acknowledged at the time that additional costs were likely.

Last summer, the county signed on to an agreement with Salinas Valley Memorial Hospital and Community Hospital of the Monterey Peninsula that would provide Natividad with up to $8 million over two years to help the public hospital with its turnaround effort. Natividad required a county subsidy of about $22 million in 2005-06.

Since taking over last fall, the interim management team has already completed a needs assessment and begun implementing a business improvement plan for further improving the hospital's operational efficiencies.

There have been three amendments to the original contract, two of which cost a total of $3.62 million. The first amendment was worth about $2.17 million and added Jobin's position, as well as a management analyst and an interim chief operating officer, while extending Chief Financial Officer Harry Weis' contract.

The third amendment initiated the first phase of the business improvement plan at a cost of about $1.45 million.

During their first nine months, Natividad's interim managers have reported that the hospital has cut its losses by about $20 million over the previous fiscal year through May.

Also today, the supervisors are set to consider hiring a long-range strategic planning consultant to develop a blueprint for the future of the safety-net hospital. Consultant John Abendshien of Integrated Clinical Solutions Inc. would earn $136,000 in fees and expenses for four months of work. Abendshien would begin work Aug. 1.

The supervisors will also consider a bump in hospital management salary ranges aimed at improving Natividad's ability to recruit and retain qualified department managers.

According to Foley, several of the items the supervisors will consider haven't yet been reviewed by the Natividad board of trustees finance committee because there weren't enough members present. Instead, they will be reviewed by the committee when it meets on Thursday.

Meanwhile, Natividad has hired Carol Adams, a former vice president at Dominican Hospital in Santa Cruz, as an assistant administrator in charge of strategic planning and institutional relations. Adams will begin work on Aug. 13.