TRMC has come under increasing scrutiny as of late, in these pages and by the Tulare County Grand Jury. The Valley Voice took this opportunity to allow TRMC to rebut this at length. —ed
History
With the passage of two bonds and help from the federal government, the Tulare Local Health Care District was formed in 1946. Three years later, construction began on the 86-bed hospital. In 1951, the $1.1 million hospital was dedicated and opened to the public.
In 1993, as the city of Tulare grew, a major renovation and expansion project added a new pediatric unit to the hospital. Over the next 20 years, the District continued to add needed services including medical imaging, rehabilitation, home care and the state-of-the-art Evolutions Fitness & Wellness Center.
Many groups ensured the continuing success of the hospital, including the Tulare District Hospital Auxiliary which contributes tens of thousands of dollars toward the purchase of life-saving equipment every year. In 1987, the Tulare Hospital Foundation was established to raise much-needed funds for hospital services and expansion projects as well as educate the public about the many excellent hospital programs.
In 2014, the TRMC board agreed to affiliate with HealthCare Conglomerate Associates to manage the hospital – a decision that came as the hospital was on the verge of bankruptcy, and losing more than $1 million a month.
Under the management of HCCA, the hospital has had positive cash flow for 24 consecutive months and is positioned to provide high-quality medical care to our community for years to come.
Today, licensed for 112 acute-care beds, and employing more than 500 trained medical professionals and support staff, the hospital celebrates its 65th year of providing healthcare to the community and is positioned to meet the future health-care needs of the region.
Past governance
The hospital district enjoyed years of growth and support, but spent the better part of the last two decades in turmoil. In the past 10 years alone, there have been at least seven Chief Executive Officers and as many Chief Financial Officers. The health-care district’s Board of Directors has had an equally tumultuous history. The relationship between the Board, Administration, and doctors was continually strained. All this led to chronic instability that predictably resulted in financial losses, operational disarray, and loss of physicians.
Compare this with the leadership at other hospitals including our neighbors to the north where the CEO and CFO have been virtual fixtures for decades. At TRMC, even though there have been countless changes in Board members and CEOs, a core instability nonetheless persisted that illustrated a systemic flaw in the hospital’s governance structure. Recently, the Tulare County Grand Jury came to the same conclusion.
Community’s responsibility
In addition to the tumult within the hospital, a very small group of community and non-community players continued to “stir the pot” to ensure that the turmoil continued as it served their personal agendas. In some cases, that personal agenda was for self-aggrandizement, in others it was economically driven, and yet in others it was driven by outside competitive elements that saw our hospital’s extinction as serving their economic interests. Unfortunately, despite our hospital’s near miraculous turnaround over the past two years, some of these same elements are continuing with their old ways by misinforming the public and the press – a strategy that brought nothing but failure and shame to our community. The most recent examples are the purported claims that the “doctors were fired,” that HCCA is “buying the hospital,” and that HCCA is receiving a “30% bonus over and above the employee payroll.” Just for the record, all three are patently false. Here are the facts:
– The hospital board did reach agreement with a new medical staff organization, but not a single doctor was fired. All doctors have exactly the same clinical privileges they had before the change, the only difference is new physician leadership, which is dedicated to improving the quality of care. In fact, 95% of the doctors treating patients at the hospital have signed a letter supporting the change.
– HCCA is not buying the hospital nor is it contemplating such a purchase. By law, the District’s assists cannot be sold by a Board decision or any other mechanism. The only way the hospital could be sold would be by a vote of the public. Even then, it would have to be at the fair market value, with 100% of the proceeds being paid to the publicly owned district.
– The 30% “bonus” funds employee benefits, including health insurance, and most certainly is not being kept by HCCA.
Seismic requirements for hospitals
The state of California has suffered numerous earthquakes throughout its history resulting in loss of life and often complete destruction of the hospitals, which no longer can provide care following these types of events. For that reason, a law was enacted to ensure the survivability and continued operation of hospitals to provide services following earthquakes. Senate Bill 1953 mandates that all California hospitals be rebuilt to meet these new seismic guidelines. There are no exceptions.
The Tulare Regional Medical Center complex is now 65 years old, out of compliance with the state requirements and must be replaced. There is no option and we cannot negotiate our way out of compliance; neither can other hospitals in California. We must comply and we must begin immediately.
In order to complete the tower, we must ask voters for $55 million to finish job. That’s an amount previous administrations and multiple boards (including the one serving in 2005 when the first GO bond was introduced) knew it needed but failed to ask for.
The original official 2005 bond documents (which are public and can be viewed by anyone) show that the tower required $120 million to complete, but voters were instead asked to approve only $85 million and led to believe that additional funds would mysteriously appear.
Looking at the audited financial statements for the past 12 years, it is inconceivable to me that anyone on the board or administration at the time or since genuinely believed that they could make up the difference. In fact, even the official 2005 bond documents very specifically state that additional GO bonds will be needed to build the tower.
Why didn’t they request it then? Because the board and administration at that time believed $85 million was all voters would support. So, instead of coming to the public and laying the facts as they were, they instead spun fantastical tales of how they were going to fund the difference. When we are speaking today of another GO bond, it is not something new. We are simply bringing to the surface what was known and true 10 years ago. Had HCCA been involved in 2005, we would have simply stated the true need right up front and worked with the community to address it. This is yet another of the messes that the inexperience, chronic infighting, misdirected agendas and the multiple poor decisions of the past have left for us to fix.
Building project
Our new tower will bring us into compliance with the state’s rigid seismic requirements, and will enable TRMC to provide modern-day care to patients for years to come. Our current 65-year-old building will not be allowed to continue to serve patients. Period.
All California hospitals wishing to survive are doing what we are doing, and most communities understand they will benefit from the required upgrades. Here in Tulare County, our neighbors in Visalia are facing the same requirements. While their cost to upgrade will be far greater than ours, there is no option.
Let’s consider the alternative. What if we decided that we really aren’t willing to fight to keep our hospital in Tulare? What if we just allowed all of the ineptitude and anger of the past decade to permit our hospital to fade away? The health and economic consequences would be catastrophic. As our region is already short of acute care beds and short of doctors, the quality of general health care would rapidly degrade. When emergency medical conditions such as trauma, stroke and heart attacks strike, every minute counts. If patients were forced to to travel to out of town hospitals, very bad outcomes would occur.
Economically, the loss of our hospital would be devastating. More than 500 jobs would be lost. The businesses those workers support would suffer, and property values would decline. People would choose other places to live because Tulare would lack access to quality health care. The exodus from Tulare of the health-care professionals alone would be almost immediate, and we would lose the ability to attract the very people we need to make Tulare prosper. That’s a gamble with our future that we should not be willing to make. To choose that path would be beyond reckless.
What’s changed
Stability. The private-public partnership that HCCA has with the Tulare Local Health Care District is unique and likely the first of its kind. In this innovative arrangement, the district’s mission remains intact and its assets remain fully owned by the public, yet its operations are run like a private business. Thus, this unique arrangement ensures that it is to both parties’ mutual advantage to be good stewards of the District.
HCCA has succeeded beyond what anyone had dared to hope on January 10, 2014 when it embarked on this mission. The turnaround has been dramatic and instantaneous. Every month of the last two years has seen a positive net profit. All employees received pay raises on their first day with HCCA, and they’ve had additional pay raises since. More jobs have been added. Compare this with past years of multi-million dollar losses, layoffs, and no raises. The hospital’s financial returns from 2015 alone were three times the national average and were greater than they have been in the previous 12 years. The hospital valuation has increased by $28 million in these last two years.
Confirmation of the change
Fitch Ratings is a national credit rating agency that rates virtually all hospitals in the United States, and many other businesses. Their valuations are used by banks and bond holders – just like a credit score is used in assessing how credit worthy an individual is. In the past two years, Fitch changed its outlook prediction for our hospital from “negative” to “stable” and followed that with another upgrade to our creditworthiness. It called TRMC’s turnaround “dramatic.”
In addition, we have now had two annual financial audits by an outside firm and both have unequivocally affirmed our progress, removing the “going concern” qualification and, confirmed the positive financial transformation. All these documents are available to the public for review.
Community enhancements
Since HCCA partnered with TRMC, the county has benefited from numerous enhancements to health care:
1. Three Medical Offices were opened or expanded to full-time availability in Tulare, Lindsay and Earlimart, improving access to care in rural and underserved communities.
2. Within the hospital, HCCA has launched technologically-advanced services including stroke tele-neurology, making diagnosis and treatment faster when time counts, and a precision dual-energy x-ray absorptiometry, or DXA, a bone-density scanner that uses 1/10th the dose of radiation of a standard x-ray.
3. Our Evolutions Fitness & Wellness Center has added two infrared saunas for members that provide the benefits of a sauna at lower, more comfortable temperatures.
4. A momentous partnership with Cerner, supplier of health-information technology and provider of Community Works, will allow us to integrate all departments into a logical, easy-to-use IT system that protects our patient records and information at the highest level possible.
The strides made by HCCA in just two years are nothing short of extraordinary, but the situation will improve with stable governance and an experienced team at the helm. Together, HCCA and Tulare Regional Medical Center have the expertise, the experience and the determination to move the hospital from a tangled past to a high-quality, sustainable future that our community deserves.
Kathleen Johnson is vice president of marketing for HCCA/Tulare Regional Medical Center.