Sonoma County Hospitals May Form Alliance To Increase Competitiveness
Two of Sonoma County's smallest hospitals are proposing an alliance between four publicly owned hospitals in the community in an effort to increase their competitiveness and save money, the Santa Rosa Press Democrat reports. The heads of the Healdsburg and Sonoma Valley hospital boards wrote a letter to the governing boards of the four hospitals -- Healdsburg, Sonoma Valley, Petaluma Valley and Sebastopol's Palm Drive Hospital -- proposing a new committee that would authorize joint action such as contracting for services, managing personnel services, operating a nurses registry, recruiting new employees, data processing and lobbying on health care legislation. According to Mike Smith, a member of the Sonoma Valley Hospital Board, and Kurt Hahn, president of the Healdsburg district board, the alliance would help the hospitals -- each of which lost millions last year and "often find themselves at a competitive disadvantage" against the larger hospital corporations -- to "coordinate their efforts in order to compensate for their size," the Press Democrat reports. Last year, Healdsburg and Sonoma Valley lost $2.2 million each, Palm Drive lost $1.9 million and Petaluma Valley lost $1.4 million, in part because of treating uninsured and underinsured patients and "inadequate" reimbursements from Medicare and Medi-Cal. Under the alliance proposal, the four governing boards would each appoint two representatives to a joint committee that would explore ways to "coordinate action." Last month, CEOs and administrators from each hospital met to discuss common problems and draft suggestions for improvement. Daymon Doss, executive director of the Petaluma Health District, said that while the hospital would "strongly support" an alliance to "preserve these community based facilities," it would "not participate in any alliance regarding running the hospital" (Rose, Santa Rosa Press Democrat, 1/2).
Although the hospital alliance proposed by Smith and Hahn "isn't a panacea," the four hospitals have "limited influence" and can only "stay financially viable if they can control expenses," according to a Press Democrat editorial. According to the editorial, "miserly" government payments from Medi-Cal and low reimbursements from Medicare and private health insurers have forced the hospitals to "continue to operate in the red." The "quality of service may improve" if the hospitals could share the costs of needs such as employee training and computer software, and "combining recruitment efforts" may make it easier to hire employees, the editorial says. The Press Democrat concludes, "[B]y reducing costs and eliminating duplication, small hospitals may be able to keep their doors open until real reform occurs" (Santa Rosa Press Democrat, 1/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.