Santa Maria, California
Catholic, Not-for-Profit
130 Acute Beds, 99 Skilled
Heavy Managed Care Influence Including Capitation
Affiliations: Academic Medical Center Support in Key Specialty Programs
Background
Profitable only from Non-Operating and Other Revenues; losses from operations increasing; no long-term finance policies; reserves shrunk to $2.0 million; random capital investment without any strategy; 50 percent outmigration from service area; extremely thin margins forced by predatory managed care pricing; highly competitive area with intense utilization pressure; health plans aligned with primary physicians.
Results Under MPA Leadership
- Became one of California’s top performing hospitals
- After 14 years, income from operations rose to $4.4 million; reserves climbed to $30 million
- Outmigration down to approximately 15 percent
- Market share up dramatically over competitors
- Rated “A” by Standard & Poors Corporation through 4 tax-exempt financings
Key Moves
- Re-vamped financial policies;
- Improved clinical capabilities through physician recruitment and clinical service development (cardiovascular, oncology, neurosurgery, orthopedics)
- Designed and financed a continuum of services including a 99-bed SNF, home health, infusion therapy, and community clinics
- Developed core competence in managed delivery including capitation
- Modernized and expanded facility
Leadership Focus
- Strategy, long-term positioning, and resource allocation
- Minimal operations at Board level
- Financial and CQI performance measures
- Highly incentivized management team
- Extensive concentration on physician relations
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