Case Study

Sierra Kings District Hospital Turnaround


SITUATION

Sierra Kings District Hospital (SKDH) in Reedley, California, is a 49-bed district hospital. Along with its five rural health clinics, it provides emergency and acute care services. It is one of the last district hospitals operating between south Fresno and Bakersfield. The hospital had struggled financially for several years. In 2008, it had a projected loss of approximately $4.6 million. In October 2009, it filed for bankruptcy. As a major employer in the town of 25,000, the threat of Sierra Kings’ shutting down would adversely impact the local economy.

SOLUTIONS

In 2009, HFS was called in to manage the hospital’s business office and billing systems. However, the engagement expanded well beyond a business office issue. With the serious financial challenges that the hospital was facing, an inter-disciplinary team was required. HFS brought in a team that included an Interim CEO and CFO, patient accounts specialists, reimbursement specialists, registered nurses, experts in coding, staffing experts and rural health clinic operations experts.

 

 
Pictured above: New hospital Site Adminstrator Denyse Bales-Chubb delivered a recognition award to former Interim CEO Sandy Haskins from HFS for his work in transitioning Sierra Kings District Hospital. (Ed Boling / The Exponent)
   

During a span of two years, this team worked with the hospital to reduce operating losses and maintain sufficient cash flow. The team also worked with civic leaders and hospital supporters, holding numerous formal and informal meetings over an 18-month period. The goal of the meetings was to build consensus for a strategic plan resulting in finding a "partner" to help preserve the facility.

RESULTS

HFS Consultants’ skilled, strategic approach was able to turn around the struggling hospital and position it to not only survive but to thrive in the years ahead. The hospital was able to navigate its way to a partnership with a healthcare system and successfully resolve its bankruptcy.

The HFS team accomplished the following:

  • Identified and achieved over $7 million of incremental cash flow, which, along with the protection afforded by the District’s bankruptcy filing under Chapter 9, was crucial in helping the hospital avoid closure.
  • In June 2011, the numerous community and stakeholder meetings paid off when District voters passed a measure with a 96-percent approval authorizing the Board to move forward with the hospital becoming part of the Adventist Health Central Valley Network.
  • The affiliation with Adventist Health began in November 2011 and served to preserve the hospital, maintain hundreds of jobs and allow Sierra Kings to pay its creditors in full through the bankruptcy process.

For more information on HFS Consultants' services with hospital and healthcare facilities turnaround strategies, please contact HFS President Rich Gianello at 510.768.0066 ext. 223.

"HFS Consultants promptly and professionally came to our aid in a time of crisis. Their team identified the most promising initiatives, developed effective action plans, conferred with our Board on sensitive matters, and executed our wishes with great skill. We could not have achieved such a successful outcome without their assistance."

-Kathy Omachi, Chairman of the Board, Sierra Kings District Hospital

 


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