Fears of a third bankruptcy or another closure of the original Palm Drive Hospital were  heightened last week after the current Sonoma West Medical Center (SWMC) operators resorted to asking the already-bankrupt Palm Drive Health Care District (PDHCD) to help cover their payroll and other immediate expenses.

Although very deep in debt from two previous bankruptcies the district was able to help SWMC because west county taxpayers had just paid $2 million in parcel taxes in December.

After reopening the hospital on Oct. 30, patient use has been steady but billings and revenues have been lagging far behind business expenses that top $2 million a month.

With the help of a PDHCD  equipment payment of $600,000 and another $400,000 in a new loan, a Feb. 4 payroll of $544,475 was paid to a hospital staff that totals just under 100 people. Another $555,364 payroll must be paid on Feb. 18.

Most recent public comments, including a petition from a new group called Friends of Sonoma West Medical Center are focused on preserving the “life saving” emergency room. “Locals feel safer and are relieved that they no longer have to face long hours of waiting in Santa Rosa hospitals,” the Friends petition reads.

Since opening Oct. 30, there  have been 1,617 emergency room visits, leading to a total of 536 actual medical cases. Of that total, 201 were defined as  “high level” or “severe” cases with the remaining cases filed as less urgent cases, according to a report from CFO Doug Goldfarb. There have been eight ambulance visits to the reopened emergency room during the same time period, Goldfarb said, adding no tracking is kept on how other patients arrive.

Ray Hino, CEO for the reopened hospital told a public meeting two weeks ago there has been 2,961 patient visits since Oct. 30, including 211 admissions and 83 surgeries.

Hino related that local cardiologist Dr. Thomas Cunningham told him, “in its last 10 years before closing, Palm Drive was never as busy as Sonoma West Medical Center is today.”

Forecasting continuing business levels, Hino said the SWMC hospital “will have built up $1.7 million in cash” by the month of May. His calculations are based on a “realistic” average of 15 patients per day, 60 outpatient surgeries per month and 20 patients per day in the emergency room.

 Alanna Brogan, executive director for the PDHCD that is extending the loans for the hospital called Hino’s predictions “very conservative and look correct.”

To open the money spigot at the hospital, federal Medicare reimbursements and private insurance payments need to happen.

The reopened hospital was re-accredited by the federal Center for Medicare Services (CMS) on Dec. 7 and a new billing number was finally transmitted to Hino last week.

After another 21 days of review by the Medicare payment clearing house service Noridian, as much as $4.5 million in net accounts receivable, retroactive to Dec. 7 cases, are anticipated.

“Once this happens, Medicare is actually a pretty prompt payor,” said Hino.

New reimbursement contracts with major insurance carriers are now taking place, Hino also reported. These include Anthem Blue Cross, Blue Shield, United Healthcare, Aetna, Healthnet and Cigna.  CFO Doug Goldfarb said a few contracts may be in place in February, with other negotiations continuing through March.

Private insurance contracts ae very important to a hospital because they set limits on the amount of payments that can be 30 percent and lower than actual gross billings. Too low reimbursements often have been cited as part of the former Palm Drive Hospital’s failure and bankruptcy.

Prior to the closing of Palm Drive Hospital in April 2014, the Sebastopol and larger region of western Sonoma County relied on the acute care hospital for disaster response and as a central resource for overall emergency  medical response by local law enforcement and fire departments.

Hospital supporters also point out the emergency room serves as a vital resource for the local elderly population who have limited transportation options.

In 2013, the Palm Drive Hospital’s emergency department lost $1.3 million, according to state hospital reports. The emergency room saw 7,035 visits with 945 classified as “severe/life threatening.”

In partial response to the 2014 closing of the emergency room, the PDHCD last year funded $20,000 to support Bodega Bay EMT services and other emergency response training in the district.

A new physicians group took over the emergency room duties on Feb. 1, replacing a former group led by Dr. Rodney Look. After paying Dr. Looks group almost $1 million, including $477,000 before the hospital reopened late last year, Hino said the new group’s contract will save the hospital expenses.

The Sonoma West Medical Center board of directors next meets on Monday. Feb. 15 and the Governing Board of the hospital meets in public session on Monday, Feb. 22.

Both meetings are in the hospital’s conference room at 501 Petaluma Ave.

(18) comments


WAIT A MINUTE!!! I worked there years ago and never got paid!! why are we still throwing away our tax dollars on this dump!!! Pay your former employees PDHCD is a joke!!!


Sorry CCB...
You're shooting the messenger here, but you won't ever believe that and when this enterprise once again goes in the dumper — not from any reporting or perceptions, but from this thing we like to call "reality" — you and several sectors of this community will cast blame on people who should be held blameless...
The district soon will not have the money to be shaken down anymore...
But most people don't even know the difference between the district and SWMC anyway...
And yes Diana, the headline wasn't perfect, but as someone who was at the meeting, the body of the story could have been a lot worse...


Thank you for helping to educate those who haven't had the pleasure of Medicare's unpredictable reimbursements. Indeed, I experienced a Claw Back from them which was "accidental" and took 120 days of screaming and threatening before they corrected their error. Still 120 day when you are cash poor hurts and they didn't pay a penny of interest.
So, even if Medicare pays they can change their mind even though you have the money.


Everyone predicts that the Medicare money is on the way but I remember a few years ago that Palm Drive admitted on March 9, 2011 that it had improperly billed Medicare for $2.3 million in services. It was said at the time that this was an inadvertent mistake and unintentional and maybe that is true but Medicare has a long memory and many more computers than the hospital. Having been involved in medical group and hospital management for a long time I have seen Medicare "take back" reimbursement it believes it is owed. Hopefully this matter has already been resolved, if not the cycle will repeat itself and the hospital will be looking for handouts once again. In any event the cycle will repeat itself and the hospital will inevitably be gone.


CCB talk of biased statements, yours pretty well takes the cake on this one. Based on the information that was presented at the meeting by those who should know (executives and board members of the hospital) I'd assume that the facility is circling the drain.
Can anyone substantiate the value of the hospital's receivables? When dealing with Medicare or insurance carriers, until the check comes in you can only guess what you are going to be paid. There are so many "subjective" reasons to disallow charges that then require appeal that makes people's heads spin. That my friend is why the hospital couldn't borrow money in the traditional way and had to go "public" looking for help from the District.
The paper's interviewing other "tangentially" involved parties would not have changed the fact that, technically the hospital is insolvent until it can realistically project actual income from experience.
What I feel sad about are all the personnel who are being yo yo'd about not knowing if they will have a paying job tomorrow or next week or next month. Clearly this is not the way to build confidence and support in the community.


I am grateful that Sonoma West editors choose to publish realistic headlines rather than the biased manner other publications choose to use.
Great work by everyone at SW.


I wish I could get unbiased and comprehensive news from this newspaper. I really do. You didn't bother to interview any of the staff at the hospital for this article? You merely sat in at the District Board meeting and then deduced that they are going bankrupt again? I am involved in several ways with the hospital, mostly on the periphery. Enough to know the hospital's side of things. I have been so surprised and dismayed at the ongoing, one-sided misrepresentation of facts and sometimes outright untruths in your articles. Sadly I have lost my faith in your reporting. How many other stories in your paper are as inaccurate or biased as the ones about the state of the hospital. I am done reading your paper. It has taken a lot for me to write this to you but this story and its headlines were the last straw.


I chose to be transparent, and I do not agree that I should not express my feelings about how the press reports.

Interesting that no one has actually responded to my objection about the headline. You have no idea what kind of impact this kind of headline has on the staff, volunteers and other supporters of the hospital. Wake up!

Over and out of this discussion...


So you think that there were many ways that the events at the board meeting could have been portrayed ? Really? You mean like "spin" the facts? Thank God that we have freedom of the press and honest reporting. You say that you know a lot about how the hospital is being run. But, you do admit that financial intricacies are not your expertise. How about 2+2 doesn't =5.


I can't pretend to know the exact financial balances at Sonoma West Medical Center but can we agree that when the Chairman of the Board declares in public that they are in jeopardy of not meeting payroll that the situation is dire? This a mere couple of weeks after the opening "celebration"? But I'm sure Diana can find a positive spin for us.


Well Diana, as a consultant (I'm one as well, also in healthcare with 25 + years of experience) you of all people should know that one should never put down or speak negatively of any news source because you can never win without their support.
Sometimes silence is golden as much as our ulcers might complain!
Have a great weekend!


What kind of consulting work are you doing?
The Press Democrat sends reporters when there is a catastrophe, but Sonoma West Times & News is the only community news organization that has consistently sent reporters to board meetings even when things were calm. That's where the news is and not the press releases reprinted in other local press.
I can also point you to a large body of work in this paper that has boosted the hospital's programs (some that even Ray Hino has praised) but there is a certain population in this community that refuses to acknowledge all the positive press the hospital and district has received in these pages. And if anything is perceived as negative, it is because not everything that comes from that facility is unicorns and rose petals, regardless of what you're being fed.


I do know quite a bit about how the hospital is being run and how differently it is doing business as I have been a consultant working with the hospital since March, 2015. My main objection is to the negative headline. There are so many ways the recent events at the district board meeting could have been portrayed. Did you ever realize that the headlines are what people read more then the articles?

I won't get into the financial intricacies as that is not my expertise, and I know enough to know that Sonoma West Times is not the community newspaper I will trust with how it supports community institutions. In fact, it is contributing to a negative scenario more than you realize.


SWMC is not close to bankruptcy because they're dumping all the debt on the district/taxpayers...
The "fear mongering" is in the financial details (not the rosy projections we keep hearing from the SWMC administration)...


Diana, clearly you don't know the facts and before you get on your high horse criticizing Sonoma West take the time to learn them. By getting the facts I mean do your homework and go to the meetings ask questions of people who are knowledgeable (not limited to those feeding you the information) and then compare what you ave learned with that you are being told and make an educated decision of what is true.
Also, make sure you do the math, find out what things cost and how the fact that you bill something at one rate you are paid by the insurer at a lower rate. Learn the economics of running a healthcare business and staffing it. Be a human vacuum, learn everything before getting angry at those giving/bringing you the news.
After you do your homework you will find that the facts are pretty darn clear the hospital can't make it financially nor is there the "need" for one as the area is well served by existing facilities. Also long ER waits don't count because patients in an ER go through a process called triage where the sickest get treated first. Therefore if you are in a waiting room for a long time celebrate..... You aren't THAT sick.[beam]


The reporting from this newspaper is the most accurate, responsible and unbiased reporting in the community. So don't purchase the paper and keep your head buried in the sand. I assume that you attend board meetings and know all the facts. Or do you depend on some nutcase investigative reporter for your information?


Why is it necessary to have such a negative, dramatic headline from a community newspaper about an essential community institution? Do you truly think this sells papers? I no longer purchase this newspaper because of the irresponsible negative approach to issues that are important to the community's health and well being.

There is no indication that Sonoma West Medical Center is even close to a bankruptcy situation. You will say you are just reporting on expressed 'fears', but I still think you are part of a much larger problem of spreading negative fear mongering.


Wow... Three bankruptcies never looked so good, although I did not read anything in the article about the approval of the $600,000 in a closed session attended by Mr. Smith and Mr. Hino (neither of whom is on the PDHCD board).

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