Valley Public Radio News
8:37 am
Mon February 27, 2012

Reedley hospital emerges from bankruptcy

When we get sick, this is what most of us want to see a doctor.That’s what the people of the town of Reedley wanted when they voted to establish the Sierra Kings Health Care District. They taxed themselves and sold bonds to build their own hospital. “What individuals felt is that they could really not for their own health care travel 35 minutes to Fresno or Visalia for major health care,” says Kathy Omachi.

Omachi is a member of the hospital district board of directors. She says Reedley faced what many rural communities deal with; little to no access to health care. Small cities like Corcoran, Kingsburg and Selma followed Reedley and also established hospital districts. They would soon learn that providing health care to an underserved population was much more than selling bonds to pay for the buildings.

“You’ve got the ever increasing cost of staffing, and requirements, benefits, insurance, you’ve got property taxes, supplies, malpractice insurance that could run one million dollars a year. All those things can really sink a hospital,” says Omachi.

Reedley’s financial woes were made worse by managers who severely mismanaged the 44 bed facility. In 2009 board members learned that the hospital managers were using bond money for operating expenses and had withheld over a million dollars that was to be deposited in the employee pension plan…the hospital’s finances were so bad it could not purchase basic supplies like bandages.

“I personally feel that as a board member that we did fail the community. But what our obligation was to take the bull by the horns and make the situation right,” says Omachi. Both the chief executive and chief financial officers were fired, and in 2009 the hospital district filed for bankruptcy.

Area residents like Joe Moya believed Reedley was headed for the same fate as Dinuba’s hospital which closed after filing bankruptcy in 2002. “That was the talk not just in Dinuba but Reedley they were afraid that was going to be it for sure,” says Moya.

New life was breathed into the Reedley hospital when Adventist Health, a nationwide health organization agreed to take over the ailing hospital last year. The deal provides a way for Sierra District to pay off its creditors and come out of bankrupt. Omachi says it was a smooth transition that prevented the hospital from laying off any employees.

“If it wasn’t for Adventist Health Care System to step forward we would have closed the doors.”

This is not the first time Adventist Health has stepped in and took over an ailing rural facility. In 1998 it bought sacred heart hospital in Hanford, the following year it took over the hospital in Selma. Tracy Belson, regional director of operations for Adventist says the health network saw Reedley as an opportunity to grow its services.

“The Reedley market had been an underserved market as far as health care and we found it was going to be a great opportunity for us to take our mission, vision, values into that area and serve the patients in that community,” says Belson.

The Adventist Health Central Valley Network consists of four hospitals and health clinics that cover a 25-hundred mile area, located in places like Dinuba, Parlier and Orange Cove. “These are patients who traditionally might fall through the cracks in the regular health care service areas,” says Belson.

They are the underserved patients with Medi-Cal insurance, or no insurance, the kind of patients that cost medical facilities a bundle. Linda Borges, director of business operations says Adventist Health can provide the service because of its corporate structure and resources. “Our clinics are hospital based clinics in which have the support of our hospitals, the resources that we need to be financially run these clinics and serve the patients in the communities.”

Adventist Health is also a faith based organization and serving the underserved is seen as part of its mission. It is a philosophy that is embraced by some of its doctors.

Dr. Sireesha Reddy is from the Bay Area. She went through a six month training program at Loma Linda University, an Adventist affiliated medical school located in Southern California. She is doing her residency training at the Reedley hospital.

“This is the area where I feel I’d be more beneficial to my patient population. There is a need everywhere but here is where I felt I could learn more and be a better doctor.”

So far it seems the people of this rural valley community are embracing the hospital. “I went to the Selma hospital which is Adventist Health and if the Reedley hosptial can be run anything like the Selma hospital is a good move,” says Reedley resident Glen Friesen.

The bankruptcy deal Adventist Health worked out with the Sierra Kings hospital district could see the two forging a permanent relationship. Adventist is paying the district $800,000 a year to lease the hospital for 15 years. That money is allowing the beleaguered hospital district to pay off its creditors and emerge whole in about three to four years. The district won’t be able to build another hospital in the area but it can use its money to provide transportation services, pre-natal care and other health education.

“We could not have done this without Adventist Health Care,” says Omachi.

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  Special funding for this program comes from the California HealthCare Foundation
http://www.chcf.org/