Local News

Monday, May 12 2014 05:20 PM

Next big goal for KMC: Break even

  1. 1 of 1

    By Casey Christie / The Californian

    Kern Medical Center on Mt. Vernon Avenue and Flower Street.

    click to expand click to collapse
BY JAMES BURGER Californian staff writer jburger@bakersfield.com

Kern County supervisors and Kern Medical Center CEO Russell Judd, with the help of a consultant, on Monday hashed out the umbrella ideas under which they will try to turn the public hospital profitable.

The day-long session, Judd said, established a few very important points on which everyone agreed:

* Kern Medical Center has a problem.

* Kern County needs KMC.

* The county needs to fix the hospital's problems.

While those are simple statements, Judd said, saying them publicly is important.

"Being the public entity, we've got to say it out loud," he said.

Now it is up to Judd and his management team to develop a strategic plan for bringing the hospital to a break-even point.

Judd, now, has to evaluate:

* How KMC functions after the implementation of the Affordable Care Act.

* How KMC should be organized and governed. A health care authority is the most likely answer to that question.

* How physicians should be connected to KMC.

* What role teaching doctors play at Kern Medical Center.

* What services and programs at KMC cost and fit into the new KMC.

PROBLEM

The county and Judd's team have been pursuing solutions to KMC's problems aggressively for months.

The hospital lost $2 million in March, down from roughly $3 million in February. It's projected to have lost $25 to $30 million this fiscal year, which ends June 30.

County officials are pursuing creation of a hospital authority -- an independent agency run by an appointed board -- to take over control of KMC.

And Judd and his team plan to reduce the hospital's largest cost -- payroll -- by reducing overtime, leaving jobs empty, reducing hours and eliminating unnecessary positions.

That alone could reduce KMC losses by $10.8 million in the 2014-2015 year.

But even then, KMC Chief Financial Officer Sandra Martin projects, the hospital will lose $11 million.

"We are losing an immense amount of money every day," Judd said. "We've got to stem that tide."

County Administrative Officer John Nilon said the county expects to reduce staffing across all departments by as much as 107 full-time, filled positions in the coming year's budget.

After the proposed KMC budget loss is factored in, other county departments could lose an additional 111 jobs, Nilon said.

CLOSURE?

That cost presents a challenge to supervisors.

Hearing consultant The Camden Group say that making money at a hospital is going to only become more difficult as healthcare reform changes American health care didn't help supervisors feel more comfortable.

But for the most part, the board directed Judd to figure out a way to keep KMC open and drive it toward break-even.

Supervisor Mick Gleason described his support for keeping the hospital open as weaker than Judd's, while Supervisor David Couch said his support is "conditional."

But a wide coalition of community members voiced support for the hospital and committed their time and resources to help figure out a solution to its and the county's problems.

"Health care is a human right. I can think of no other priority in the county more important than making sure that every resident of this county has access to health care -- even if there is a cost," said community activist Dolores Huerta. "Our priority has to be to strengthen Kern Medical Center as a safety net in our community."

Speakers from the Dignity Health system of hospitals, Kern Health Systems and San Joaquin Community Hospital said they, too, support the success of KMC.

And Clinica Sierra Vista is on board.

"For 43 years, our organization has relied on Kern Medical Center for care," said Clinica CEO Steve Schilling. "It is really critical that Kern Medical Center think about what it should become -- what it needs to be."

Representatives from the Service Employees International Union, Local 521 -- Kern County government's largest employee union -- are on board.

They said they believe the hospital can be successful and are committed to partnering with the county to pursue the hospital's future.

But KMC nurse Carmen Morales-Board said the bottom line discussion of costs at the hospital must be tempered by a discussion of the value of KMC's services.

GOALS

In the end, supervisors gave Judd the five guiding goals to pursue over the next 120 days.

He will answer them with strategic and tactical plans that, everyone hopes, will move the hospital toward healthier financial footing.

Couch said he wants Judd to develop a plan that gets the county hospital all the way to break-even.

Once they know what it will cost the community to get to that point, he said, the county can make decisions about what services and functions should be subsidized by the county's general fund.

Have something to share? Comment on this story

Bakersfield.com Daily Deal!

Manuel's Casa De Mariscos

Daily Deal

$20 worth of Mexican food for $10

Value
$20
% Off
50%
You Save
$10
16 Bought
Buy Now! See more deals