Sonoma County Grand Jury
• 2007-2008
Like other small community hospitals, Palm Drive Hospital in Sebastopol operates with declining reimbursements and
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 8 findings
F1
Hospital executives and Board Members did an inadequate job of evaluating and communicating the serious financial trends and looking for ways to resolve the situation.
Related Recommendations (1)
R1
All Board members should receive basic financial training. California Special District Association offers training for new board members. Financial institutions and auditors also offer financial training.
F2
Financial Data: Fiscal Year Ending June 30 2003 2004 2005 2006 2007 Net Revenues from Operations $17,052,090 $14,958,886 $15,930,615 $16,772,800 $15,104,279 Operating Income or (Loss) ($3,451,399) ($4,304,254) ($4,499,097) ($4,936,734) ($6,925,239) Tax Revenues $1,838,051 $1,859,911 $4,402,300 $3,687,385 $4,030,946 Source: Audited Financial Statements
Related Recommendations (1)
R2
A five-year strategic plan, with benchmarks, should be developed and reviewed annually.
F3
Audited financial statements indicate: • Declining net revenue from Operations • Growing losses in operating income caused in part by low insurance and reimbursement rates. • Poor Accounts Receivable procedures and collections. • Bad decisions, i.e., closing and reopening the Intensive Care Unit. Opening long-term nursing facility and then closing it due to necessary repairs.
Related Recommendations (1)
R3
PDHCD should create a management-support group for the doctor population.
F4
2007 Auditor’s comments: “These conditions raise substantial doubt about the District’s ability to continue Hospital Operations in the future.”
Related Recommendations (1)
R4
The district should increase efforts to improve the image of Palm Drive Hospital in order to attract quality physicians and avoid losing patients to competing hospitals.
F5
Despite a County Healthcare budget in excess of $200 million, there were no county funds earmarked to assist the small hospitals in the county like Palm Drive.
Related Recommendations (1)
R5
As a member of the JPA, Palm Drive should investigate specialization in specific medical areas.
F6
The performance review process for the executive staff was ineffective.
Related Recommendations (1)
R6
The Board and Hospital Management should create job descriptions for all executive employees, emphasizing the importance of communications.
F7
A Joint Powers Agreement (JPA) was formed to allow hospitals to save money by coordinating purchasing, etc.
Related Recommendations (1)
R7
PDHCD should continue to keep taxpayers informed on financial matters.
F8
Most board members have limited experience in hospital operations and financial analysis; there has been considerable turnover of Board and key hospital operations personnel in the 2003-2007 periods. Conclusions As noted, there are several areas of improvement: Key Statistics Average 7-1- 2007 YTD 12-31- 2007 YTD Variance Hospital IP Census 8.4 10.9 30% ER Visits 20.9 21.4 2% Lab & X-ray 37.1 36.1 -3% IP & OP Surgeries 4.3 4.7 9% Other OP 2.6 3.7 42% Hospital Admits 524 708 35% Hospital Patient Days (Acute & Swing) 1,796 2,339 30% ICU Admits N/A 187 ICU Days N/A 472 ER Visits 4,484 4,593 2% Lab & X-ray 7,975 7,762 -3% IP & OP Surgeries 934 1,004 7% Other OP 555 795 43% • Higher reimbursement rates from insurance • Improved billing and collection procedures PROJECTIONS • Five- year projections show a continued need for parcel taxes and long-term debt. • An essential element of the Plan of Adjustment is for the District to issue Certificates of Participation (COP). COPs are similar to bonds in that they are used to finance debt. They are paid for by Measure “W” proceeds, and DO NOT require voter approval. A portion of the proceeds will be : o Used to create the “Plan Fund” to pay creditors who have allowed Claims filed with the Bankruptcy Court, o Used to repay the Operating Loan, o Applied by the district to finance future long-term capital and operating needs for the District, o Used to retire the approximately $9.2 million remaining in the 2001 bond issue. The amount of the COP is approximately $23 million. Commendations The District has been fortunate to have the leadership and financial acumen of Dan Smith, a concerned citizen whose financial generosity single-handedly kept the hospital doors open during dire times.
Related Recommendations (1)
R8
PDHCD should institute and manage an effective A/R collection program to enhance management-support practices.
Additional Recommendations 2
These recommendations are not explicitly linked to specific findings.
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R9PDHCD should institute an effective performance-review program for management.
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R10Sonoma County should show financial interest and use of influence to aid smaller hospitals. The County, as stated in its mission statement, is committed to providing superior and courteous services to support, preserve, and enhance the health of Sonoma County citizens. Therefore, Palm Drive Hospital should be preserved. Required Responses to Re
Conclusions 4
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CL1 Page 4Higher reimbursement rates from insurance
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CL2 Page 4Improved billing and collection procedures PROJECTIONS
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CL3 Page 4Five- year projections show a continued need for parcel taxes and long-term debt.
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CL4 Page 4An essential element of the Plan of Adjustment is for the District to issue Certificates of Participation (COP). COPs are similar to bonds in that they are used to finance debt. They are paid for by Measure “W” proceeds, and DO NOT require voter approval. A portion of the proceeds will be : o Used to create the “Plan Fund” to pay creditors who have allowed Claims filed with the Bankruptcy Court, o Used to repay the Operating Loan, o Applied by the district to finance future long-term capital and operating needs for the District, o Used to retire the approximately $9.2 million remaining in the 2001 bond issue. The amount of the COP is approximately $23 million. 37
Commendations 1
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CM1 Page 5The District has been fortunate to have the leadership and financial acumen of Dan Smith, a concerned citizen whose financial generosity single-handedly kept the hospital doors open during dire times.
No Responses Found 2
Government entities assigned to respond to this report. No response documents have been linked in our database.
Palm Drive Health Care District
Special District
Sonoma County Board of Supervisors
Elected County Office