Management Performance Associates

Marian Medical Center Santa Maria, California

Santa Maria, California
Catholic, not-for-profit
130 acute beds, 99 skilled
Fixed price, heavily regulated environment
Affiliations: academic medical center support in key specialty programs


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 four tax-exempt financings

Key Moves

  • Revamped 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 Board involvement in operations
  • Financial and CQI performance measures
  • Highly incentivized management team
  • Extensive concentration on physician relations