Executives at Natividad Medical Center, the smallest safety net hospital in California, told attendees at the Healthcare Financial Management Association's recent ANI conference that the once-struggling facility has enjoyed an amazing financial recovery.
The Monterey County, Calif.-based hospital went from a $25 million loss to an $8 million gain in just four years by instituting team-building, setting financial perimeters through data collection and renegotiating contracts with HMOs. Natividad also benefited from a $10 million private donation; 6 million from Salinas Valley Memorial Hospital and 4 million from Community Hospital of Monterey Peninsula that launched the recovery.
Natividad CEO Harry Weis said public hospitals like Natividad train 43 percent of California's doctors, but only constitute 6 percent of the state’s hospitals. Public hospitals also provide care for the majority of the state’s indigent population.
“We had a myriad of reasons to succeed,” Weis said, adding that “a properly constructed system can be a very powerful growth engine.”
Natividad has been a fixture in northern California for more than 100 years, but mismanagement brought the hospital to the brink of closure in 2006.
Weis and his team were brought in to overhaul the hospital in 2006. Today the facility generates $166 million in net revenue, with an annual payroll and benefits of $78 million. The hospital has also added 110 full-time employees.
As recently as 2006, Natividad received more than $20 million in county funding, but Weis said the hospital needs no such assistance these days.
Part of the recovery can be traced to a change in the facility’s culture from “what we're doing is good enough” to one focused on pride in performance, Weis said.
Nurses were made key members of the “success team,” and hospital staff were held accountable for the first time in years. In addition, the ER billing department upgraded the hospital’s fees to match the prices of services to those of surrounding hospitals, Weis said.
Jeffrey Bass, MD, director of Natividad’s emergency department during the turnaround, said he and his staff focused on making triage more efficient. Patients in the ER were treated and sent home if they had low acuity illnesses, which freed up beds for patients with more severe problems.
As a result of the changes, ER wait times went from four hours to roughly 30 minutes. Bass said patient satisfaction spread by word of mouth and the hospital increased the volume of patients they were able to handle.
“We want to debunk the myth that public safety net hospitals can never make money,” Bass said. “We don't think we’re a fluke. This is a model that can be reproduced over and over again.”