Monroe’s Valley General Hospital, facing economic hard times and internal tension, will change leadership and ask taxpayers for money to bring new doctors and a new clinic, following announcements made last week.
Mark Judy to leave
In a mutual decision, the Valley General Hospital Board of Directors and hospital CEO Mark Judy agreed last week that it was a good time for him to leave the hospital. Judy brought significant changes to the hospital, and it resulted in stress within the hospital such that it was felt that Judy had fulfilled his function and that it was time for a change for all concerned, explained VGH board chairman Neil Watkins.
“Cultural change is difficult to sustain as it is,” said Watkins. “He was a successful change agent but he felt it was time to move on. Change is loss and loss is mourned and it’s hard to get past that.”
What those changes were and who had a hard time adjusting to it, Watkins did not say, other than to mention that Judy brought about some changes in the way things were done at the hospital.
Judy, 61, came to VGH nine years ago after a career in hospital administration that began in 1975. He worked then as an assistant administrator at Everett’s General Hospital, returning to Everett to serve as General Hospital Medical Center president and CEO in 1984 after three years in California.
Judy will finish at VGH July 29. The board hopes to find his replacement by then.
During Judy’s career at Valley General, he oversaw some growth of the hospital, including the recent expansion of the emergency room, the purchase of a $1.4 million MRI machine, the construction of the next door Medical Office Building which includes space leased by the hospital, and the enlargement and relocation of the hospital’s drug and alcohol treatment facility.
He also stepped in to help save the medical clinic in Sultan, approving a $308,000 loan to the clinic to help the foundering practice remain open. The clinic remains in business six years later.
But during Judy’s tenure, the hospital also struggled financially, due in part, say some citizens, to a critical loss of doctors during that time. Auditing firm Moss Adams reported last year that the hospital lost $1.6 million in 2004, $1.5 million in 2005, and after a profitable 2006, lost even more in 2007 and 2008. Part of the reason could be a declining number of surgeries; outpatient surgeries declined from 2,100 in 2001 to 1,600 in 2008, with the number of inpatient surgeries remaining steady at about 800.
Such was concern among some residents that 10 formed a group called “The Citizens for the Preservation of Snohomish County Hospital District No. 1.”
“We’re concerned with the fact that the hospital is not doing well; in fact, it’s doing worse and worse,” said one woman who belongs to the group.
Declining patient numbers, low cash reserves, a lack of some services, low public confidence in the hospital and insufficient number of doctors were among the concerns named by the group. And internal communications show that there was discontent among at least part of the staff, with tension between some of the doctors and nurses and Judy, and a 2006 survey of employee morale found that morale was low in some areas.
However, the financial struggles of the hospital, also attributed to high levels of charity care and bad debt on the part of patients, was not a factor in Judy’s departure, said Watkins. “It had nothing to do with that,” said Watkins, who said that the hospital’s finances are in fact improving.
Levy
The hospital now will seek a levy to accomplish three goals: the hiring of more doctors, a new clinic in the Cathcart area, and improvements and repairs to the existing hospital. “There are no clinics in the Cathcart area, but it’s part of our taxing district,” explained Kathy Nelson, hospital spokesperson. “It’s growing there. They are taxed for us, so we feel we need to provide services.”
Currently Cathcart residents are about 19 miles from any large hospital, including VGH, she said. A facility would cost about $1 million, and would not be expected to be profitable, but rather the goal would be to break even, said Chief Financial Officer John Beltz.
The levy would also ask for about $1.25 million for upgrades and repairs to the hospital. “We have a lot of buckets around when it rains,’ said Nelson. The roof is about 30 years old and needs to be replaced, and there are some needed electrical repairs.
Also patient rooms need some slight expansions, the administration said. “Rooms are pretty tight when is comes to all the equipment you use that wasn’t in use 40 years ago,” said Nelson. The windows in each room could be pushed out to create window seating and free up some space, said Beltz. Other small adjustments to the rooms could result in several additional feet of floor space, he said.
Also, more energy efficient windows would result in a savings over time. The entire cost of needed upgrades and repairs would probably be about $2.5 million, but he projects will be staged over time, said Beltz.
The third and most important piece of the levy is a physician business plan. “It’s getting harder and harder to get doctors to come into a small hospital,” said Nelson.
The levy money would enable the hospital to attract good doctors which then would generate revenue for the hospital. The hospital would seek general surgeons, OB/GYNs, perhaps an orthopedic surgeon, two family practitioners and two pediatricians.
Getting doctors to work for the hospital is good business sense, because not only does the hospital benefit form the patients those doctors bring, but they can refer to other doctors and services within the hospital. And they don’t compete with the hospital, said Beltz. It works out well for doctors, too, he said, eliminating the significant financial risk and overwhelming time constraints associated with private practice.
Currently, people in the Valley General Hospital taxing district pay about 12 cents per every $1,000 of property value. The hospital will ask for that rate to increase to 35 cents. The state average for hospitals is 68 cents, Nelson noted.
“There are 40 taxing hospitals in the state and we are ranked 40th in tax rate,” she said.
The owner of a $300,000 home would see taxes go from about $26 per year to about $105 per year if the levy is approved, she said.
The levy will go to a vote in August.
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