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Thursday, Mar 28, 2024

Back to Health

Five years ago, Valley Presbyterian Hospital was on the brink of closing, losing millions of dollars every year as doctors took their business elsewhere, leaving empty rooms behind. Debt holders were circling, threatening to take the facility. Today, that past is but a distant reminder of just how far this Valley institution has come. With its fiscal house in order, CEO Gustavo A. “Gus” Valdespino is now focused on instituting a more patient-centered culture and looking to further remodel and expand the Valley’s only locally owned and controlled nonprofit hospital. “We’ve made the necessary improvements so that doctors and patients want to come to us,” said Valdespino, who was recruited two years ago to continue the repairs started by former CEO Albert L. Greene, who passed away in April, 2009. “Our big focus now is building on that success, to improve patient experience and to create a patient centered culture here.” That cultural transformation will be no small task. Valley Pres gets just average patient experience scores, according to CalHospitalCompare.org, a service of the California HealthCare Foundation. Seventy-one percent of patients said they’d recommend the institution, below the state average of 73 percent. Its surgical patient experience score was ranked below average. Still, those familiar with hospital say the heavy lifting of bringing this institution back from the brink is now pretty much done. From a deficit of $8.3 million in 2005, the hospital finished 2010 with a $23.8 million surplus and very little debt. Gross patient revenue nearly doubled in the same time period to $871.6 million in 2010 from $440.9 million in 2005, and that’s while occupancy rates rose to 56 percent from a paltry 44 percent in 2005, according to figures submitted to the state. The average daily census has gone from 150 to 190 and the number of surgeries has doubled to nearly 700 a year, Valdespino said. Some of those gains — in particular the $24 million surplus — was the result of a one-time increase and is not indicative of the hospital’s normal operations, Valdespino noted. But the hospital is using that cushion to reinvest for the future with big plans to renovate half the hospital that has not been updated and add some 80 to 100 new beds by 2020. Board members who saw the hospital through its recovery credit Valdespino and his predecessor, Al Greene, for the work. “We were on the edge of closing our doors,” recalls David W. Fleming, counsel at Latham & Watkins and the longtime chairman of the hospital’s board of directors. “There was a lot of political turmoil and we were losing patients. We had to go out and bring in more business and that is exactly what Al Greene has done and now Gus is continuing that work. The census is higher. Our equipment is absolutely state-of-the art. We’ve made huge strides in the last few years. The hospital is running better today than ever in its history.” Doctor relationships That’s a big change from a few years ago when Valley Presbyterian was losing patients, and more importantly, doctors. Those familiar with the history of the 350-bed institution say the former leadership somehow lost sight of the importance of maintaining good relationships with physicians. In fact, those relationships became, in the words of one board member, “out-and-out antagonistic.” Another board member, Dr. Nicholas Di Domenico, an internist, said there was “poor communication between the medical staff and the administration. The administration had its own ideas about how to make the hospital prosper; the medical staff had different ideas.” Resources were tight, he added, and there were differences about how to invest the limited money. Doctors, for example, pushed for more staffing and updated equipment. With a $70 million bond outstanding, the administration didn’t feel it had the money to spend, he said. Board member Bill Allen, president of the Los Angeles Economic Development Corp., said the situation led to deteriorating buildings and equipment. “Because the hospital had not kept up with the physical plant and was not really marketing itself, it lost some of the positive relationships with its physicians,” Allen said. Doctors leaving created a vicious cycle of declining revenue and declining reinvestment, added Dr. Greg Kay, a board member and heart surgeon. “If doctors are not happy, they won’t send you patients.” When Greene was named CEO in 2006, one of the first things he did was invite Dr. Kay to join the board. A well-known heart surgeon, Dr. Kay gave the hospital much needed cachet with physicians. It sent a powerful message that the relationship with doctors was valued, Dr. Kay said. Since then, Valley Presbyterian has increased the input of physicians. Of 15 people on the hospital’s board, seven are doctors, a majority. One of the first things these doctors insisted on was capital investment in facilities and equipment, say those familiar with the situation. Under Greene and then Valdespino, the hospital managed to borrow money to pay off the $70 million tax-exempt bond. That move gave the hospital some financial flexibility to reinvest in the hospital. “We retooled everything from radiology to maternity,” Valdepino said. “We rehabbed pediatrics. We enhanced the emergency room. We upgraded our operating rooms.” Improving care Among other improvements, the hospital today has a state-of-the art cardiac care and stroke centers, an amputation prevention center, one of only a handful of such centers in the country, and a new hip and knee institute. Its pediatric and neonatal intensive care units are staffed 24/7 by board certified physicians. And in April, the hospital will open a newly expanded labor and delivery unit with seven new rooms, the result of a $4.5 million investment. In all, the hospital has pumped more than $20 million into capital and facility improvements in the last three years, Valdespino said. It took a few years, but eventually the doctors came back, bringing their patients and increasing utilization—along with occupancy rates and patient revenues. “The doctors are very happy with the direction the hospital has taken,” Dr. De Domenico said. Growing revenue allowed the hospital to pay off the bond holders, Fleming said, noting that today the hospital’s balance sheet is the healthiest it’s ever been. Debt is under $5 million and counting the value of its real estate, the hospital has over $100 million in assets, he said. The hospital also benefited from a state program to help hospitals with a disproportionate share of uninsured and poor patients. It was this — the federal Hospital Provider Fee program — that gave the hospital a $24 million surplus in 2010, Valdespino said. Valdespino said he plans to leverage the surplus to remodel about half the hospital that has not been upgraded and add 80 to 100 new beds in the next eight years. Equally important to getting its fiscal house in order was building trust and transparency between the administration and the clinical staff, Valdespino said. One way he does that is a weekly blog with employees. Valdespino also makes a point of walking the hallways and rounding on patients with the clinical staff. He also admits when he’s wrong — publicly. An idea to partner with public health officials from Guam to bring critically ill patients to the hospital went nowhere, and he didn’t hesitate to undo the program. With some of the harder challenges behind him, the Cuban-born CEO is turning his attention to patient satisfaction issues. The hospital has received accolades from the Daily News, whose readers have voted the hospital best in the Valley six years in a row. But it may have to work harder to achieve consistently higher grades from CalHospital Compare, which includes data from government and private sources, including the Office of Statewide Health Planning and Development. Other Valley hospitals, for example Providence Holy Cross, outperform Valley Presbyterian on many measures, including overall patient experience, on which Holy Cross rates superior. Seventy-seven percent of Holy Cross patients would recommend that institution, higher than the state average of 73 percent. Improving patient experience is important not only for its own sake. The Centers for Medicare & Medicaid Services (CMS) will begin paying hospitals with superior patient satisfaction scores an incentive payment starting in 2013. Valdespino recognizes that there is room for improvement. “Our scores are OK now,” he said. “But we want to take it to the next level.” While the incentives are good, it’s not the driver, he said. “We want to do it because it’s the right thing to do. It’s why we are here.”

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