Performance Excellence
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Performance Excellence

4/14/11: Performance Excellence News Release

Salinas Valley Memorial Healthcare System, like other leading institutions across the state and nation, is facing unprecedented challenges in a changing healthcare landscape. We are meeting the challenge by redesigning the model of care and instituting a system-wide restructuring in order to create the Healthcare System of the future. We are confident this transformation will put Salinas Valley Memorial at the forefront of innovative healthcare strategy and implementation, while ensuring the future viability of our organization and affordable healthcare for the people of our region.

Hospitals everywhere feel the recession

Though the economy is showing signs of recovery, the recession continues to adversely affect hospitals and the patients they serve. According to a March 2010 survey by the American Hospital Association, patients continue to delay or forego care, as family budgets remain tight. Seventy percent of hospitals across the country reported lower overall patient volumes and 72 percent reported fewer elective procedures.

Additionally, patients' financial challenges have resulted in a significant increase in government-sponsored programs such as Medi-Cal and Medicare. These programs pay hospitals less than half of what it costs to treat a patient, and more people enrolled in these programs means an additional financial strain on hospitals. Nearly nine in 10 hospitals reported an increase in care for which the hospital received no payment at all.

At Salinas Valley Memorial, our charity care has increased dramatically—from a budgeted $2 million per year to more than $15 million in the 2009-10 fiscal year.

Hospitals across the country are continuing to feel the effects of this recession. Nearly three-quarters of hospitals report reduced operating margins. At the same time hospitals, like all Americans, have less income from investments. Gains on investments traditionally have helped hospitals subsidize losses from patient care, particularly from Medicare and Medi-Cal, which pays less than the cost of caring for patients. 

Looking toward the future

Behind every challenge is an opportunity. We are now in the position of creating the future of healthcare. This video from the Governance Institute features thought leaders discussing the culture change that will be embraced by leading institutions across the country.

Salinas Valley Memorial - leading the change

At Salinas Valley Memorial we are adapting to the new economic realities of healthcare, while continuing to advance leading edge quality care. Our Healthcare System has a history of strong financial stewardship, and we believe that responsible leadership calls for decisive action during challenging times. We have developed a plan that restructures our organization for increased efficiencies and cost effectiveness, while maintaining quality and value for our patients.

Earlier this year we launched the Performance Excellence initiative. Through this project we benchmarked our processes with best practices at leading institutions across California and the nation. Like many other top performing hospitals, we enjoyed a high patient/employee ratio. However, it is now time to continue our standard of excellence with a streamlined staff, just as top hospitals across the nation are doing. Over the course of the past year we have reduced our staff size through attrition by approximately 100 positions. 74 employees have accepted the voluntary buyout package. Our goal is affordable healthcare for our community, as well as immediate and sustainable performance excellence without compromise of quality or satisfaction.

SVMH is currently in discussions for a new contract with the National Union of Healthcare Workers (NUHW).

This is happening against the backdrop of a rapidly changing environment that has put our hospital and others across the country under tremendous financial pressure. Our goal is to make the necessary adjustments now that will ensure this hospital is able to deliver on its mission for years to come. 

Jim Gattis: Let's resume meaningful talks at SVMH

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