To Keep the Record Straight

November 20, 2017

Just to keep the record straight, I would like to respond to the opinion piece by Sandra Bodley and Sukey Robb-Wilder which the Press Democrat published on Friday.  In this the authors decry the possibility of the Palm Drive Health Care District taking over management in a restructuring of Sonoma West Medical Center.

While the central claims are false, and I will get to that, first I want to make an observation:  Ms. Bodley was elected as a Director to the Palm Drive Health Care District in November of 2012 and served until December 2016 when the new board was seated.  When she was elected, Palm Drive Hospital had shown a $5 Million profit in 2010 (in part from the bonds and taxes) and a very slight loss (less than $100,000) in 2011.  However the hospital over which the District Directors maintained control and oversight, had not grown business since 2010 and by Ms Bodley’s end of first year, was showing over a $1 Million loss, had grown management salaries such as to have salaries and benefits over 60% of net revenue (a responsibility of the Directors) and supply costs almost double the industry average and the actual costs in 2010.  Putting it bluntly, those directors squandered the $5million and never recovered but they did allow costs to rise exponentially.  Not a financially sound management plan.

In 2014, this Board of Directors had so mismanaged the District that they had to declare bankruptcy and close the hospital they were charged with running.  Director Bodley stated at a public meeting that the community needed to just accept it because “the new normal “ was not to have small community hospitals. And, in negotiations with the Palm Drive Healthcare Foundation to keep the hospital open, as one of the two Board Directors assigned to the negotiations, Director Bodley personally rejected an offer of $1.5 Million just to keep doors open while problems were addressed.

During the period from 2010 which showed a $5 Million profit and 2014 hospital closing in bankruptcy, the Directors never proposed new lines of service, opportunities to grow the business, nor reorganization of management or supplies to cut costs.  Never once did they acknowledge their responsibility for keeping a hospital in the community through their strong oversight.

The central point, here, is that the person complaining about the prospect of hospital financial mismanagement is the same person who oversaw the mismanagement decisions leading to the bankruptcy in 2014.

It is difficult, therefore, for any of us working hard at reopening and supporting a hospital which provided a community resource in the recent wildfire crisis to take as credible the comments of a Director who not only oversaw the bankruptcy and closure, but who also refused to accept help to keep open and who personally, as one of 2 Directors negotiating with the Foundation to set conditions for reopening, insisted on the “firewall” which has led to the IRS issue requiring restructuring.  The “firewall” provided assurance that the Directors actually had no real responsibility for the hospital or its management. The IRS problem stated by former Director Bodley was of her making—she would not agree to any reopening without this “firewall.”

Now to the simple facts:  The District Directors have these choices: to reissue bonds as taxable bonds which would cost the District over $5 Million (according to our bond attorneys and advisors) or to make some simple changes in the management agreements to retain the current tax-free bonds.  These bond positions were thoroughly outlined at a public meeting which included the bond advisors and legal advisors.  The public was there and encouraged to participate.  Nothing was hidden. Between paying $5million and roughly $50,000 penalties while we resolve the technical language seems, to me, a “no brainer.”  The District certainly cannot afford $5 Million while still working to solve the bankruptcy brought on by the actions or lack of oversight by former Director Bodley and her colleagues.

The changes WILL require that the District take financial responsibility for the hospital…something that the public should expect of the elected Directors anyway.

The present District Board has looked into multiple opportunities for increasing income and keeping costs under control.  At the moment the hospital is showing more than a $500,000 monthly profit much of this (although not all) due to our new toxicology lab and we intend to expand to add more advanced laboratory services while investigating a number of important services for our community—all of which will produce income.

The hospital in Sebastopol has had a number of people trying to close it for several years—allegedly because they see no real use for it or they object to the community voted taxes.  And it is certainly true that the District was ill served by former Boards of Directors.  Several communities successfully detached from the district although hospital records show that Sonoma West Medical Center is still serving approximately the same number of patients from those areas.  During the fire, SWMC saw 544 patients in 10 days of which 51 were from the detached areas.

It is discouraging to find a few people noisily decrying this hospital which faithfully serves West County and anyone who needs help.  It is particularly discouraging to have a former Director who was specifically responsible for the last bankruptcy mismanagement as one of the noise makers.

As an elected District Director, I intend to work hard to keep a hospital in our community and hopefully we will succeed.  It is not easy but even with the 4 small community hospitals in Sonoma County, our county still has fewer beds than are needed for our population.

Sonoma West Medical Center has annually received the highest patient satisfaction rating in Northern California—and did again this year.  We are trying to build a medical facility which can provide a community resource and give the care for our patients which allows healing and good health outcomes.

So—don’t believe everything you read by people whose agenda is to close the hospital.  The taxes will not go up.  The Board of Directors is working tirelessly to create a financially viable hospital and serve the community that voted in 2000 to have a public hospital.

Gail G. Thomas, Director
Treasurer, Palm Drive Health Care District