Sonoma Valley Hospital Forecast

            Sonoma Valley Hospital (SHV) is a nonprofit hospital located in Sonoma California. The hospital has 83 beds and an average daily patient volume of about 40. Sonoma Valley Hospital has been benefitting from a parcel tax which will be effective until 2017. The parcel tax provides approximately $3 million per year and creates financial stability for the organization. Sonoma Valley Hospital’s patient satisfaction is above the nation average, and it is continually rising. It also has an excellent staff satisfaction rate compare to other organizations in the sector. 

            The three main buildings of the organization were built between 1957 and 1978. The aging facilities needed upgrade and improvement. The organization had started the upgrade and improvement process two years ago and had done an excellent job, but the radiology equipment and some physical plant systems still awaiting needed upgrades.        

            SVH has been having a significant decrease in inpatient volumes since 2010. The projection of inpatient in for 2013 would be 1543 compare to 1615 in year 2010. However, outpatient services are increasing which also led to an increase in outpatient revenue.  SVH is considered challenged sustainability under a study of exposure verses readiness of hospitals for the changes in healthcare performed by Deloitte in 2012. The finding suggested that the organization needs to reposition its financial and strategic plans in order to survive in the long run.

            Government sequestration and health care reform are pushing health care organizations toward value based operations. SVH needs to improve its efficiency and reduce unnecessary cost to maintain revenue margin. The organization also needs to be prepared for its $3 million per year capital shortage once the parcel tax expires in 2013. Capital project analysis can be used by SVH to analyze budgets for new projects while conducting the annual capital budgeting. The organization can also incorporate zero-based budgeting in to its plan to eliminated unnecessary projects so that more resource can be saved or relocated to other important operations.

            The future of healthcare profit margins is filled with uncertainties. Government budget cut may lead to constriction in Medicare and Medicaid payment, and other commercial payers will likely to follow suit. SVH will need to find more creative financing techniques, including different kinds of fundraising, and seek extensive partnerships that are able to provide additional capital funding.

Resource

Sonoma valley Hospital (2014). 2014 Three-Year Rolling Strategic Plan. Retrieved from

           http://www.svh.com/wp-content/uploads/2012/03/SVH-Stretegic-Plan-FY2014-
           DRAFT.pdf