Sonoma Valley Hospital cost-cutting plans move forward

Two major cost-cutting moves at financially strapped Sonoma Valley Hospital have been finalized, and a public meeting is planned to discuss the third – a proposal to close the hospital’s skilled nursing facility.

Healing at Home, the hospital’s home care service, will be transferred to Hospice by the Bay, a regional not-for-profit organization, effective Oct. 1. The boards of both agencies have approved the move, with the hospital board unanimously approving the transfer Sept. 6.

Hospice by the Bay, which has operated in Sonoma County over 25 years, acquired the home care service and its assets for free from the hospital. The service provides nearly 9,000 home care visits each year, according to the hospital’s chief executive, Kelly Mather.

“It was a money-losing operation, that was clear to us,” said Board Member Bill Boerum. “Reluctantly, I think it was something that had to be dealt with because of the losses.”

Boerum added, “It’s a lost opportunity for the hospital. Home health care is a trend in the industry. More and more organizations are providing health care,” and technologies such as remote monitoring have been developed to provide this care, he said.

As to why the hospital couldn’t successfully capitalize on the trend, “There were dis-economies of scale. We tried to expand the service into Northern Marin and beyond, and it just couldn’t be supported,” the board member said. “We were doing this for Kaiser, and they wouldn’t pay our rates any more.”

The hospital’s revenue was $59 million in the fiscal year 2018, with a $3 million net income loss, according to unaudited numbers supplied to the Index-Tribune by the hospital.

Healing At Home Director Lisa O’Hara has said that the transition should be smooth for local patients. O’Hara, a Sonoma resident and a 20-year member of the hospital staff, will join Hospice by The Bay.

There will be no interruption in service for patients, according to Wendy Ranzau, the chief operating officer of Hospice by the Bay.

In another major cost-cutting move, the board voted in July to close the hospital’s obstetrics department, a move bitterly disputed by many members of a standing-room-only crowd at the July meeting of the hospital board of directors. The department is expected to sustain a half-million-dollar loss in the fiscal year 2018 and has seen a 35 percent drop in births since 2015.

The obstetrics department is closing Oct. 31.

“The Number One sign of the downfall – the closure – of a hospital is the closing of units,” said Rachael Hairston, who gave birth to her infant daughter, Helen, about a year ago at the hospital. The Sonoma resident addressed the board at the July meeting along with others imploring that the obstetrics department not be closed.

“The first inclination of the oncoming storm was the decision to close our (obstetrics). This included all ob/gyn, labor and delivery and pediatric services,” Hairston said.

“Every hospital that has closed in the last decade, the story started like this,” the Sonoma resident said.

In response, Boerum said, “I don’t think the changes made in those two service lines represent in any way the downfall of the hospital.” Boerum described them as necessary management adjustments in response to the hospital’s financial woes.

“We’ve now lost (obstetrics) and home hospice, and SNF is on the chopping block,” Hairston said.

The latter reference is to the hospital’s skilled nursing facility. A proposal to close the facility is the third of the three major cost-cutting moves.

“It’s not on the chopping block,” Boerum said. “It’s under serious review and re-evaluation as to whether the right cost numbers are involved or whether adjustments can be made that would make it profitable.”

Boerum said he has talked to community members including caregivers, family members and friends of the facility’s patients in the last few weeks about the possible closure.

“I’ve talked to people who visit daily at the skilled nursing facility. They are not going to do that if they have to go to Santa Rosa,” Boerum said.

“There are four issues: The cost dynamics, which are being closely re-examined; the issue of convenience for caregivers, family and friends; the issue of placement in facilities around here; and the quality of care,” the board member said.

The board had originally planned to discuss closing the skilled nursing facility at its July meeting, but postponed the discussion to allow for further study and to allow the public to weigh in, according to hospital officials.

The hospital formed a task force in August to identify ways either to improve the skilled nursing facility’s financial performance to make it sustainable or recommend closure. Board members and representatives of the hospital administration, physicians and residents are on the task force.

Also, the hospital has engaged a consultant with experience in skilled nursing facility financial and operational management to help with the assessment.

The hospital is holding a meeting Sept. 27 to get public input on the future of the skilled nursing facility. The meeting will be held in the Council Chambers at 177 First St. W., and will begin at 5 p.m. The task force is planning to make an interim report on its findings at the Board’s Oct. 4 meeting.

Reach Janis Mara at janis.mara@sonomanews.com.