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Hospital Board Passes Budget, Plan
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Members of the Oak Valley Hospital Governing Board moved the facility forward on Wednesday, June 27, approving the 2012-2013 Fiscal Year budget and a three-year strategic plan to carry the hospital into 2015 as it transitions into a new facility.

According to Chief Executive Officer John McCormick, the $55 million budget shows a $3 million loss “on paper” but he reported that the hospital should have a “positive cash flow” nearing $4.2 million.

The loss was explained as depreciation of the new building when finally moving in next month and paying off old debts.

During its financial report, McCormick indicated that Oak Valley Hospital was operating at a $362,000 profit for this year.

McCormick described the new budget as “aggressive.”

“We have to change our culture; we have to change our path,” said McCormick. “Healthcare is going from volume based to value based.”

The board also approved a capital improvement budget of nearly $4.3 million, identifying an MRI machine and including a $500,000 building fund and $500,000 for contingency expenses.

“For things that break,” McCormick said to explain the amount for the contingency fund.

The three-year strategic plan identified goals and objectives that McCormick wants to take Oak Valley toward for his preferred operating model in upcoming years.

“The good old days of making money off cost increases are going away,” said McCormick. “The hospitals that give excellent service are the ones that will survive.”

In other actions, the governing board approved a three-year contract for McCormick with a $240,000 annual salary for the first year with the possibility of raises for the subsequent years. The contract also gives McCormick up to six weeks of personal time off for vacation, holidays, and illness.

Since taking over as CEO in October after the board placed longtime CEO John Friel (See related story) on paid leave for the final four months of his contract, McCormick has been credited with improved communication and morale at the hospital.

The board also accepted the ratified contract by the hospital’s union employees of United Steel Workers. The union covers the majority of Oak Valley’s workers who are not management or physicians.

The contract grants “bonuses” of $300 to $2,400 to the hospital employees who have not seen pay raises in three years.
Approximately 200 workers, including all Registered Nurses, Radiology Technicians, Respiratory Technicians, Dieticians, Pharmacists, Phlebotomists, Housekeepers, Clerks and other staff are covered by the contract.