Urgency in Petaluma Valley Hospital process
The clock has begun to tick in a hasty process to find a suitable operator for Petaluma Valley Hospital, and the collective uncertainty over exactly how Petaluma’s long term health care needs will be met is, to say the least, disconcerting.
For the past two decades, St. Joseph Health has capably operated the city’s only acute care facility on a lease from the Petaluma Health Care District, the public entity that owns the hospital. That lease is set to expire in January. In an ideal situation, another contract would have been in place by now, ensuring either continuity with the current operator, or a smooth transition to a new operator.
That’s not what has happened. The heath care district, under the guidance of its publicly-elected board of directors, spent much of the last year pursuing a new contract with St. Joseph, only to see that process abruptly collapse in October.
Both parties cited three main issues preventing a new contract: financial terms regarding how much St. Joseph would pay the district to operate the hospital, a non-compete clause, and what officials said were “complexities related to the need to maintain all family birthing center services.” While the first two issues relate to money, which can usually be resolved through compromise, the third issue lingered as a key sticking point.
As it turned out, St. Joseph’s policy decision to discontinue tubal ligations, a female sterilization process, was the primary reason the two parties were unable to reach agreement. District officials, believing that Petaluma’s public hospital should provide a full range of women’s health services, found this unacceptable. St. Joseph, which is part of a Catholic ministry that now disallows contraception procedures, found itself unable to bend to the district’s demands.
St. Joseph has agreed to stay on and operate the hospital until September, or until a new operator is on board, which likely won’t be sooner than next summer since Petaluma voters must ratify the new contract at the ballot, and the earliest this can happen is June.
Now that St. Joseph has no place in the future of the hospital, district officials have set an accelerated time line to choose the new operator. This expedited “speed dating” of potential hospital operators, which will give the publicly elected board and community members precious little time to thoroughly evaluate their qualifications, is unfortunate and could probably have been avoided.
Shortly before it requested bids from prospective operators two years ago, the district conducted surveys and focus groups to help it evaluate the kind of services desired at the 80-bed acute care hospital. Results showed the community wanted a provider that could maintain emergency services, inpatient services and intensive care, while expanding primary care services for new patients and greater availability of pharmacy and radiology services. Participants also expressed a strong desire for a provider that would maintain or even expand the maternity, obstetrics and gynecology programs at the hospital. Women’s health services, including contraception, were an important priority.
Although the public was prevented from learning what was contained in the various proposals the district subsequently received from a variety of prospective operators, it’s logical to assume that the proposal from St. Joseph made clear its new policy prohibiting tubal ligations. Despite this, district officials rejected all other bids and continued talks with St. Joseph officials well past their expiration date as the two parties struggled in vain to come up with a solution in a third-party provider of the tubal ligation procedures. Only when that attempt failed did the parties finally walk away from the table, leaving district officials up against the clock to find an alternative hospital operator in just seven months.
From a negotiating standpoint, the district is now in a somewhat weakened position, simply because it has far less time to dicker over such matters. And with the pending departure of St. Joseph casting a dark cloud of uncertainty over who will be providing health care services one year from today, physician recruitment and retention could become a major problem.
People responsible for operating health care facilities, including Petaluma’s locally elected health care district officials, live in very complicated times. The reality of soaring medical costs and dwindling revenue streams, coupled with economic uncertainties tied to the recent implementation of national health care reform policies, make operating a hospital today an increasingly difficult proposition. The recent election of Donald Trump, who has vowed to work with the Republican-controlled Congress to dismantle the Affordable Care Act, will make those challenges even greater.
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