Sonoma’s hospital announces Ensign as skilled nursing facility operator

Nearly a year after Sonoma Valley Hospital officials raised the possibility of closing the hospital’s skilled-nursing facility in a cost-cutting move, officials this week announced a likely deal to outsource operations – but keep the facility open at the hospital.

Ensign Group, a national manager of skilled nursing centers, is working with Sonoma Valley Hospital officials on a proposal to assume operations as of July 1. Ensign runs 197 similar nursing centers, in addition to 254 health care facilities in 16 states, according to a May 8 announcement from the hospital. Ensign was one of two operators to submit proposals to SVH to operate the skilled nursing facility.

Last year SVH took a hard look at the skilled nursing facility’s operational losses, which were amounting to more than $800,000 per year and organized a task force to study ways to make improvements, including closing the facility as it did the obstetrics department last October due to revenue loss.

Sonoma Valley Healthcare District board chair Joshua Rymer called it a “positive and necessary step” to strengthen services and put the hospital on “a more stable financial footing.”

“(Outsourcing skilled nursing services) will generate incremental revenue for the hospital instead of the current situation where we are losing money,” said Rymer.

Under the proposed agreement, said Rymer, Sonoma Valley Hospital will receive revenue from Ensign both as part of a revenue-sharing agreement, and through the hospital providing certain medical and operations services to Ensign. Under the draft agreement, added Rymer, SVH would not be liable for any losses incurred by Ensign.

Prior to seeking an outside partner to run the facility, the skilled nursing task force implemented changes to the program with an eye for cutting costs, but analysis showed that the facility would still face revenue loss in part because the hospital was unable to bring in more patients who need long-term care.

Ensign is contracted with other health care organizations in the area, such as Kaiser and St. Joseph’s Medical Center. According to Rymer, Ensign would be able to bring in patients in those outside networks, which could help to create a sustainable operation.

Ensign could also help SVH expand its services.

Rymer cited Ensign’s “capabilities in post-acute care” as advantageous to Sonoma Valley patients, as well as the addition of other services Ensign can provide.

“Specifically, Ensign brings capabilities in post-acute care that we do not possess, including broad expertise operating facilities under ever-changing regulations and significant efficiencies of scale. Additionally, Ensign’s ability to add a subacute unit, which will bring in new patients. Ensign reports that currently there are only two subacute units in the North Bay and both operate near capacity,” Rymer said.

Under the proposal, the facility will remain under the hospital’s license with administration and board oversight. All but one nurse was offered a job with Ensign, Rymer said.

Ensign operates several facilities in the area including Broadway Villa Post Acute in Sonoma.

Melissa Evans, director of the skilled nursing unit, said Ensign should be able to support longer patient stays than were feasible under SVH, which has been about 17 days on average in recent months.

Sonoma Valley Hospital CEO Kelly Mather expressed hope that the agreement with Ensign is another step in the right direction for the hospital.

“With this final change in fiscal year 2019, we see a positive future and financial sustainability,” said Mather.

Email Anne at anne.ernst@sonomanews.com.