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September 30, 2009 > Healthcare- A stormy debate Part 2

Healthcare- A stormy debate Part 2

A TCV series by William Marshak

Continuing the discussion of health care, costs, reimbursement and insurance, TCV interviewed Washington Hospital Healthcare System CEO Nancy Farber to talk about the challenges of hospital operations in the present economic and political climate.

TCV: How is reimbursement determined at Washington Hospital Healthcare System?

Farber: When I became CEO in 1994, the Board was asked to look at existing labor policies. This was done and they were reaffirmed. These basically create the circumstances under which the unions have an agency shop here. The other two parts of the Board's labor policy are "tandem" and "parity."

Tandem means that no union will receive a benefit that other unions do not get. In periods of scarcity, other hospitals have sometimes negotiated extraordinary benefits for a particular group of employees. This creates resentment within the workforce.

Parity is the intention by the Board to meet the market; not to pay at the top or bottom, but to meet the market. This ensures a good selection of well-trained people who work at the hospital. This is the same policy for all employees including myself.

Periodic surveys are done to be sure pay is appropriate. In some cases, scarcity of certain job classifications and specialties, for instance respiratory therapists and ultrastenographers, demand very close attention to the wage scale of similar positions in our area.

TCV: What additional methods are used to assure trained employees?

Farber: The Board approved something I proposed many years ago. If we have a good employee in housekeeping or dietary for instance, who would like to become a nurse, radiology technician or respiratory therapist and meet the requirements for admission, they will be paid as if they are working here while in school. When they complete their course of study, they come back to Washington Hospital. These people have already established a relationship with the hospital and stay with us. That has worked out very well.

TCV: How does the hospital address the difference between percentage of salary increases and actual dollars?

Farber: We look at the basic dollar averages of pay for the area. We "normalize" the pay scale to the same range as others in comparable positions in the Bay Area. There is enormous longevity at Washington Hospital so many employees are at the upper level of the range for their job classification. For those at the top, we have given one-time cash payments to compensate for others who receive a salary adjustment.

TCV: How does the financial health of Washington Hospital relate to wages?

Farber: When I started as CEO, we needed to implement a 10 percent downsizing and did this as well as we could. There had not been good financial results for several years. The Strategic Plan had to be reworked to find ways to bring new revenues to the hospital. This was done by adding profitable programs and services. In today's era, that is cardiac care, neurosurgery and orthopedics. We lose money on Medi-Care and Medi-Cal patients so this is basically Robin Hood economics. Is this right? No. But we are just one hospital and cannot change things by ourselves. Although this process is distasteful at times, we have to make everything balance.

In my last 15 years as CEO, this hospital has experienced its best financial performance. This year we ended the year with $37 million on the bottom line - Washington Hospital has never had such a big year.

TCV: In light of the current economic climate this is remarkable. How did it happen?

Farber: We brought two University of California professors here to start a Gamma Knife program; Dr. Sandeep Kunwar does a lot of neurosurgery here. Our Center for Joint Replacement is also very successful doing more joint procedures than any other program in the Western United States. Dr. John Dearborn is a highly respected specialist who works at this facility. Patients have access to physical therapy during most of their waking hours and results are outstanding. These programs bring income that balances other areas of the hospital that are not profitable.

I do not know how to fix these inequities but it is the way hospitals function. My job is to make sure this hospital operates successfully and can meet the demands of our community.

TCV: What services does Washington Hospital provide to the community?

Farber: We have done a tremendous amount of work in the community including all kinds of free programs and services. Every three years we do a community needs assessment with the Hospital Council of Northern California. Using mortality and morbidity data by zip code, we can refine information to find out what is happening in our coverage area - Fremont, Newark, Union City, Sunol and the southernmost area of Hayward. Our last assessment showed a major Diabetes problem in Newark, worse than Oakland. This is a huge problem and we are responding to this by focusing on diabetes education is that area, handing out free meters, blood screening. The WOW (Washington On Wheels) Van is there frequently. Diabetes creates serious complications of other health problems and adds to treatment expense. A large Diabetes Clinic is now in the planning stage.

The hospital also supports all the free-standing clinics that receive county money. Tiburcio Vasquez, Tri-City Clinic and the public health clinic in Newark have also received free lab and x-ray for their patients. That has been happening since before I came to Washington Hospital.

TCV: What is Washington Hospital and how does this differ from other hospitals in our region?

To be continued next week...

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