Editor: There apparently is a perception in the community that
the financial crisis at Healdsburg District Hospital would not
cause the Hospital to close. People speculate that the Hospital
could just become a “clinic,” providing emergency service and
outpatient care. We did evaluate this possibility, as one scenario,
as part of our business planning effort – and the resulting
“Turnaround Plan”. While I cannot speak for the District Board, I
believe I can outline why this scenario was considered not to be a
viable alternative.
To begin with, there are numerous regulations governing the
operation of a certified emergency room. Suffice it to say that if
Healdsburg Hospital further reduces services by closing the acute
in-patient service, the Hospital most probably cannot remain a
certified emergency room. While we could be an urgent care center,
we would lose our Emergency Room license.
Even if somehow we could keep the ER open, the in-depth analysis
we recently undertook shows the following:
- Assuming that all outpatient usage remains the same, the
“clinic” scenario still loses almost a $1 million/year.
- We could implement several of the initiatives identified in the
Turnaround Plan to reduce these losses, but this requires:
- Infusion of approximately $1 million dollars of working
capital
- Plus the $1 million to complete the ER renovation
- Best forecast shows that we might achieve a break-even status
by July ’04.
However, the assumption that outpatient usage will remain the
same is unrealistic. Doctors will have to use other hospitals for
inpatient matters, and will migrate some, if not all, of their
outpatient work there. Further, without a Hospital here, it seems
reasonable to expect that more doctors will be moving away, and no
new physicians will be willing to come. Our physicians are our
partners – without them we cannot survive in any form. This clinic
option is not one they support, especially as all of the District
communities are growing. We currently need more doctors, not less
in our communities.
Further, how willing are our communities to support a plan that
reduces services, has only a break-even pay-off, and a downside
which we could not recover from? The clinic option is not a
fall-back position that the Hospital could recover from. If we lose
the license as an acute care hospital, we do not believe we could
reopen this Hospital.
We continue to have conversations with many community groups and
are receiving overwhelming support for the “Turnaround Plan.” It
creates new, profitable services and the critical mass to sustain
the Hospital. Our communities’ support and investment can produce a
return, and while it is a very uncertain future in healthcare, the
plan provides the Hospital a future.
Dan Hull, CFO, Healdsburg District Hospital
