This community opinion was contributed by Robert Bernosky, a Hollister resident leading efforts to recall San Benito Health Care Director Josie Sanchez. The opinions expressed do not necessarily represent BenitoLink or other affiliated contributors. BenitoLink invites all community members to share their ideas and opinions. By registering as a BenitoLink user in the top right corner of our home page and agreeing to follow our Terms of Use, you can write counter opinions or share your insights on current issues. Lea este articulo en español aquí.

  • Running a hospital is not like anything else in local government; it is far more complex.
  • Governors and administrators need to be sophisticated, experienced, and curious. We do not have that.
  • The recall of the District 4 health care district board member begins the process of getting sophisticated, experienced, and curious individuals involved.
  • Insight is taking advantage of our situation (especially unsophistication); their behavior is well understood by more sophisticated individuals: they are a low-ball buyer of our extremely valuable asset. Don’t be confused with any so called “lease” arrangement.
  • In light of the downside of any interested buyer not being as permanent as the government, we need to do what is necessary to operate the hospital ourselves at this time.
  • Hiring a competent CEO that has the vision and experience to execute on the plan experts developed to greatly improve Hazel Hawkins Hospital and make it the economic superpower in the county makes the most sense.

Running a hospital is very far different than running any other government entity, especially in the context of the size of San Benito County. No other government entity in San Benito County has $160 million of revenues almost entirely dependent on high-volume, sophisticated billing of other government entities like Medicare and Medi-Cal and private insurers. Instead of repairing one road that many people travel on using long-lasting equipment and processes that are well understood, hospitals provide services performed by specialists to many individuals one at a time, using expensive, sensitive. and complex equipment with technology that is constantly being improved.  While the costs and source of funding for a road repair are known, the predictability of costs for a patient walking into a hospital and the source of funding for many is unknown and frequently non-existent. Any payment is subject to elaborate procedures and regulations that few understand.

The personnel required to operate and oversee such a complex entity in a complex industry must be experienced and sophisticated.

This makes the case why San Benito County should outsource the running of Hazel Hawkins Hospital to a third party, if one were available. But a private operator that needs to make a profit is hard to come by; San Benito County simply does not have the volume of private insurance payers that a HCA, Dignity Health, Sutter Health, or similar hospital operators require. Higher-paying private insured patients offset losses caused by the high volume of low-payer Medicare and Medi-Cal patients that San Benito County has.

Naturally, there are entities that will take advantage of the fact that a government entity has already incurred the costs involved in building facilities like Hazel Hawkins Hospital, the government is a poor operator and are unsophisticated sellers.

That may be where we are wading into with the Insight. The high capital costs have already been incurred. The District board is naive, hired management lacking experience and sophistication, and is getting substandard results. Hazel Hawkins Hospital is ripe to be taken over by a sophisticated low-ball buyer.

The problem we face with a private buyer at any price is that they can change their mind at any time. Even if the District enters into an agreement that guarantees a level of services, agreements can be nullified one way or another, and while being adjudicated can cause great damage in the meantime. Today we have the ability to operate a hospital and with the right management and oversight can improve performance. If we sell out and then Insight ceases operations, we have to start from the beginning, i.e., building a new hospital and hiring personnel from the ground up. That would be prohibitively expensive and time-consuming.

Perhaps the single largest defect in the governance of the San Benito Health Care District is a lack of curiosity by its elected board. For 18 months, they have been barraged with items that don’t make sense, but they do not seem to care. More importantly, we’ve seen no evidence of anything but a modicum of due diligence on Insight by board members or anyone with any medical experience on behalf of the district.

All of this complexity, required sophistication and experience, pushes the conclusion to be to do a transaction with a more sophisticated partner. In light of the downside of any interested buyer not being as permanent as the government though, we need to do what is necessary to operate the hospital ourselves at this time.  Hiring a competent CEO that has the vision and experience to execute the plan experts developed to greatly improve Hazel Hawkins Hospital and make it the economic superpower in the county makes the most sense.

Keep it local.