CEO Editorial: Health reform, preserving an essential Valley asset

Community CEO Tim Joslin

Balancing consumer needs with limited resources is a critical issue in the health care reform debate that’s dominating political campaigns and legislative agendas in California and elsewhere.

In times like these it’s important to remember that Community Medical Centers is an essential health care system and economic asset to the Central Valley, but also very vulnerable to any ill-advised governmental action or downturn in the economy.

Community is the largest provider of medical services in one of the most economically and demographically challenged areas of the country.

• Most Valley counties have been designated by the federal government as medically underserved with insufficient numbers of physicians, dentists, nurses and mental health professionals.
• Although we have some of the state’s fastest growing cities, the region was characterized in a 2005 Congressional report as having more abysmal social and economic conditions than Appalachia.
• The rates of diabetes, asthma, heart disease and other chronic ailments are higher here than state and national averages.

The consequences of these realities are most keenly felt at acute-care hospitals – Community operates Clovis Community Medical Center, the Fresno Heart and Surgical Hospital, and Community Regional Medical Center with the region’s only burn and Level 1 trauma services.

Our fixed operating costs are high. We deliver care – irrespective of ability to pay – at a patient’s time of most dire need. And we must produce a minimum financial margin – at least 3 percent – to reinvest in our workforce, new technology and expansion, and to pay back our bondholders.

We must succeed in all these areas. Our viability is essential to the Valley’s well-being and future.
 
Over the last two years, Community has delivered nearly $250 million in uncompensated patient care. Yet in that same time, I’m happy to say, we have reversed the negative financial trends of prior years. As reported in The Bee, Community realized a positive bottom line of about 1 percent in the last fiscal year. And the first quarter of this fiscal year continued to trend positive.

If this momentum continues, it means reinvestment in our staff, new information technology for our doctors, expansion of our Clovis hospital, and generally better access to better care.

It’s crucial, however, that Valley residents – whom we depend upon for support – understand the precarious nature of the financial turnaround we’re experiencing. Many variables could lead us back in a negative direction, particularly when it comes to critical government reimbursement and staffing shortages.

Nearly 70% of our patients rely on government programs like Medi-Cal or Medicare. Reimbursement from these programs is too low to cover actual hospital costs, however, and the pool of uninsured that depends on these programs continues to grow significantly.

Our health care system in the Valley – hospitals, physicians, clinics -- depends on adequate government reimbursement. Current payment levels are tough, but most of the talk in Sacramento and Washington is about cuts. Cutting already inadequate payments would be a double whammy in the Valley, where reimbursement already is below average.

Similarly, while it’s no secret that our nation as a whole is facing a deficit of nurses and other licensed health care professionals, the problem is more acute in California and especially in the Valley.

At any given time, Community typically has 50 or more nurse positions open. We are forced to recruit from outside the region and even outside the state.

I’m proud that Community is a locally controlled nonprofit organization, that it provides the lion’s share of medical services in this region and that it has expanded with the Valley’s population.

I’m also proud Community serves the Valley as an important economic engine.

• We are the region’s largest private employer and, last year, paid our 6,000 workers more than $408 million in salaries and benefits. Over the last two years, we’ve invested more than $20 million in market increases to our employees, atop their merit increases.
• Our nearly $830 million operating budget includes $115 million paid to Fresno and Clovis vendors for goods and services.
• So far, we’ve invested $350 million to expand the Community Regional, the largest downtown renewal project in Fresno history.

Community’s continued financial stability will require skillful management, vigilance as lawmakers divvy up budgets and, most importantly, the continued support of community leaders across the Valley.

Community CEO Tim Joslin's editorial appeared in the Feb. 5 edition of The Fresno Bee in the opinion section.

Thursday, February 07, 2008