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Vital signs are good for ValleyCare and Stanford

Uploaded: May 12, 2016
Displaying the Stanford “brand” has been good for the ValleyCare Health System as it nears the anniversary of its takeover by Stanford Health.
CEO Scott Gregerson, speaking to the Pleasanton Men’s Club this week, outlined the significant turn-around for ValleyCare that has continued since Stanford took over the former community hospital. That arrangement has been a win for both the community and the hospital system with business up about 10 percent this year.
ValleyCare had been hemorrhaging money before the board, led by Chairman John Sensiba, decided that it was time to change leadership and relieved long-time CEO Marcy Feit and promoted Gregerson. The hospital had been losing money so it had nothing to invest in necessary capital improvements (Stanford is putting $50 million into capital improvements) and the cash on hand was way too low.
Gregerson said that the hospital managed to breakeven in its first year after it was on track to lose $14 million. About two-thirds of the money came from improved revenues as leadership re-negotiated reimbursement rates with insurers. The remainder came from cost-cutting as it shed innovative, but expensive ventures such as the Wal-Mart clinic, the nursing school mobile health van and turned over the executive staff at significantly lower salaries than the previous leadership.
For the current year, Gregerson believes the hospital will be $14 million or more in the black, a $28 million turn-around in two years. While the finances are good, he is very pleased with how the hospital ranks in a variety of measures of quality of care. It is in the top 3 percent nationally based on outcomes for Medicare patients.
An interesting change he has seen since Obamacare kicked in—more patients have high deductible insurance plans and now are actively shopping for price. And, of course, the government is squeezing hospitals and physicians alike on costs. He explained vast disparity between the “list cost,” a number based on a contract with a single insurer (likely an outlier) and what is actually collected. He said the hospital collects 16 percent of its gross billings.
He believes the future is likely a single-payer system because the current national health care approach is both way too expensive (nearing 20 percent of the gross domestic product) and producing poor outcomes in terms of life expectancy. He suggested googling health care outcomes and comparing costs versus outcomes by countries.
Gregerson also is very troubled by the trends of students who go into medicine. The best and brightest are more likely to go into financial services or technology than into medicine. More than 50 percent of physicians surveyed reported they are burned out and would not choose medicine as a career if they had to do it over again.
Given the expense ($200,000 or more) to get through medical school, the starting salaries (about $140,000 for a pediatrician) and the expense of housing, recruiting physicians will continue to be a major issue as well where his staff lives. He told of one young general surgeon at Stanford who is looking to come to ValleyCare because she, and her husband who also is a doc, are tired of living in a small apartment.
Scott’s solution—free medical education for students who will agree to work in the United States. That would alleviate the huge debt burden (most physicians do not get out of debt until after they turn 50) and presumably help attract smart and talented students. One of the biggest challenges in Obamacare in California is finding physicians who will accept patients covered by MediCal, which reimburses physicians at very low rates.

What is it worth to you?


Posted by Mark C, a resident of San Ramon,
on May 12, 2016 at 10:18 pm

We can all save a lot on medical costs if NIH would be funded more and focus on the most ROI fr investments in R&D. Today May 12th is ME Awareness day. Myalgic Encephalomyelitis(aka CFS, Chronic Fatigue Syndrome) is an aquired Neurological or immune disease that is poorly understood and affects 2 million in the US. It is more common than AIDS and worse than AIDS, yet AIDS, with 75% males, gets $3B/year in R&D fuinding still, even though now a treatable disease, due to R&D. In contrast, ME/CFS with 75% females, gets a paltry $6M per year, which represents gross discrimination against Women and M.E./CFS. The US Govt, HHS, NIH, CDC, FDA need to end this gross neglect of their duty, and fund disease R&D in proportion to prevalence, severity of disease and years of function lost.
San Ramon is estimated to have aprox 300 people with this disease, some of which are bedridden or housebound for years at time. Most are not diagnosed or misdiagnosed since almost no doctors have any training in ME/CFS, yet every MD is aware of AIDS, a rarer and milder disease now. This lack of training, even by most Stanford MD's, leads to typical patients seeing over 20 doctors over tow or more years to get a good diagnosis for this disease. To truly lead, Stanford, Kaiser, John Muir etc need to develop cost effective diagnostic screening panels for ME/CFS to lead to rapid diagnosis in 6 months or less with 5 MD visits, at greatly reduced staff, and make dedicated programs that make sense for patients with ME/CFS. Luckily, some privatly funding has allowed Open Medicine Foundation to start this year perhaps the top R&D study of Severe M.E./CFS patients in the Bay Areas, coordinated by PRof Ron Davis at Stanford, but this is grossly underfunded, for a severe, lifelong disease that affects 20,000,000 worldwide. To make up for HHS/NIH gross neglect for ME/CFS, see for a current summary of this disease.

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