Quality of care, not quantity, is the prescription for the hospital’s future financial health, according to a strategic plan presented to the Sonoma Valley Hospital board. The objective, said CEO Carl Gerlach, is to establish Sonoma Valley Hospital as the medical destination of choice for residents of the Sonoma Valley.
Reducing overhead expenses, savings on energy and software upgrades, and strategic partnerships to create buying power are also part of the plan announced April 1.
The goal is to reach 5 percent net profit by July 1, 2011. The hospital is currently running an annual deficit.
A smaller, more nimble company does have its advantages. Unlike some larger facilities, Sonoma Valley Hospital has an inherent strength to deliver quality health care in a personal and caring manner, Gerlach explained.
The disadvantage of a smaller company is the lack of buying and negotiating power. The hospital will build leverage in those areas by forming strategic partnerships with other hospitals and doctor organizations.
By working with Marin General Hospital, for example, Sonoma Valley Hospital will obtain lower costs for information software, and non patient-care services. In another partnership, the hospital is helping recruit and retain physicians to join the Prima Medical Group’s office in Sonoma.
By forming a larger buying pool with its partners, Sonoma Valley Hospital looks to improve reimbursement rates from private insurance companies from 130 percent of Medicare to 150 percent of Medicare – an improvement the Petaluma Hospital gained after a similar partnership with Santa Rosa Memorial Hospital. Lower costs for medical supplies are another benefit.
A new orthopedic surgeon and a new general surgeon will start practices this year, part of a cooperative effort to attract new physicians to the area. With those additional resources, and referrals through the Prima group, the hospital forecasts an increase surgical volume, from 648 in 2008 to a minimum of 800, next year.
Gerlach’s strategic plan also calls for the development, in conjunction with Blue Shield, of an HMO insurance product that can be offered to Sonoma and Marin County employers to compete Kaiser’s HMO insurance plan.
Tactics for the plan will culminate completion of the remodeled facility late in 2012. Completing the project “remove any uncertainty about the viability of the Sonoma Valley Hospital,” Gerlach stated. “While the goal is constant, the plan is dynamic and designed to adapt to ever-changing conditions in the healthcare world.”
