 |
 |
 |
Foundation Press Room - ArticleVisit the Natividad Medical Center Press Room to continue reading about the Hospital's progress toward VISION 2010 and other news and events. Salinas' Natividad Medical Center Posts Record ProfitsThursday, August 5, 2010
Jim Johnson » Continue Reading County Safety Net Natividad Medical Center Prospers After $25M LossMonday, June 21, 2010
Diane Mano, Senior Editor, Healthcare Finance Newsweek » Continue Reading Natividad ER physician honored for Haiti service Tuesday, March 30, 2010
Richard Green, The Salinas Californian » Continue Reading Article Archive:
Natividad on Stable FootingHospital Team Makes Budget SavingsMonday, May 19, 2008
Jim Johnson, Monterey County Herald Hospital and county officials are touting the early signs of financial progress at Natividad Medical Center, including a positive cash balance at fiscal year's end for the first time in more than two decades. Natividad still has an operational deficit, but the public hospital's interim management team is promising even more substantial, long-range fiscal improvements. According to Natividad's interim Chief Financial Officer Harry Weis, the hospital had $3 million left over June 30, the end of the 2006-07 fiscal year, after paying its bills and before the county's $10.4 million subsidy. Weis said no one at the Salinas hospital can remember the last time it had money left over before the county ponied up its share. Veteran county Treasurer-Tax Collector Lou Solton said it has never occurred during his 22 years in local public service. Solton is a nonvoting member of the hospital's board of trustees. Last year, Natividad had a cash balance of about $100,000 after the county's $22 million subsidy, Weis said. Weis and Solton warned that the positive cash balance is merely an early signal that the hospital is starting to find more sound financial footing and that there's plenty of work to be done. The interim management team from Wellspring Partners, a subsidiary of Huron Consulting Inc., is in the early stages of implementing a series of business improvements aimed at stabilizing the hospital's bottom line. The management consultants are working under the terms of a two-year, $7.5 million contract between the county and Huron that includes a recently approved longrange strategic planning consultant. Weis noted that the $3 million cash balance is after the $2.4 million the county has paid to Huron. He said the consulting fee comes out of the hospital's budget and doesn't include any contributions of up to $8 million from Salinas Valley Memorial Hospital and Community Hospital of the Monterey Peninsula, which is being held in a separate account. The two other hospitals agreed to the contribution in 2006 to help the county hospital through its crisis. Meanwhile, Natividad has a nearly $5 million operational deficit even after the interim managers declared that the hospital had cut its losses by more than $20 million in 2006- 07 over the previous fiscal year. The deficit includes depreciation of hospital assets, Weis said. More than half the reduced operating losses — about $12 million — were attributable to increased revenue from government funding sources, Weis said. More than half of that represents longterm sustainable sources, he said, as a result of identifying additions government funding. "That really hadn't happened before," Weis said. Despite the uncertainty of government funding sources, Solton said he expects the hospital to be able to maintain its ability to tap "roughly" the same amount of funding in the future. Solton said the interim managers are simply more skilled at identifying funding opportunities than previous administrations. Natividad improved its billing and collections by about $5 million and reduced its expenses by about $3 million. A positive cash balance doesn't mean the county can halt its contributions to the hospital, which needs cash reserves to offset unpredictable government funding sources and losses incurred from treating uninsured and MediCal patients, Weis said. Money is needed to replace aging equipment and to keep the building maintained. But it allows the county to reduce its contributions significantly, he said, noting that Natividad is budgeted for a $6.2 million subsidy in 2007-08. Solton said it's essential for Natividad to begin investing in capital improvements to remain competitive and strengthen its long-term fiscal viability. Weis acknowledged that the hospital's fiscal projections don't include the effects of possible changes in government funding, but said that's another reason the hospital needs a strong cash reserve account. "Our work isn't finished," Weis said. "This is an early team effort. We still have a lot more work to do to make Natividad a model public hospital." "This group is top flight and knows what it's doing, and that's being reflected in the numbers," Solton said, adding that the success of longer-term improvements is "the way this management group will make its mark." |
