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ValleyCare board chair speaks out

Uploaded: Feb 13, 2014
John Sensiba, chairman of the board of ValleyCare Health System, sat down this for an interview about the system and the recent departure of long-time CEO Marcy Feit.
Here are key points we discussed.

STRATEGY: Sensiba emphasized that the board wholeheartedly supported the strategy of developing an integrated service model with physicians employed by a medical foundation that is joined at the hip to the hospital. Over the past five years, ValleyCare has acquired some of the largest primary care practices in the Livermore Valley and built contractual relationships with key specialists to provide a continuum of care. The model is similar to the Kaiser Permanente model.
The foundation has run at substantial and increasing losses from 2009-2011 (2012 or 2013 results were not available). Losses grew from $5 million to $7 million to $10 million, while net assets were negative $22 million after the year that closed in June 30, 2011.
The hospital organization, by contrast, was positive on its bottom line in each year. Financially, the system is fine, he said.
Sensiba said that the trend needs to change trajectory, but the really important number how the overall enterprise does, not any specific part. Losses in the physicians' foundation, which refers patients to the hospital, could be absorbed as long as the health system overall performed well.
ValleyCare, under Feit's leadership, has reached out into the community with a number of programs designed to provide care even if they do not directly pencil on the bottom line. It operates campus health care at both Las Positas and Chabot community colleges as well as the Livermore Rotary Foundation's mobile health van and the innovative clinic at the Livermore Wal-Mart store.
PARTNERSHIPS AND AFFILIATIONS: Sensiba said that the system was not for sale, but it was likely that ValleyCare would seek a partner that could help with the necessary capital funding. As a stand-alone system, in the long run, it does not have the access and capability to tap the capital markets that systems will need to continue to invest and stay up with the ever-changing trends in medical care.
He also said that the competition from the joint venture of San Ramon Regional and John Muir was welcome. The venture purchased a four-story office building across from the BART station last month and announced plans for an urgent care center and physicians' offices.
"Competition is good. Our strategy is there is abundance and we will strive to meet our mission of quality care. I am confident we will be fine," Sensiba said.

FEIT"S DEPARTUE Although Feit's 16-plus-year tenure in the CEO position as well as her 42 years at ValleyCare seemed to come to an abrupt end to this observer, Sensiba said the board had considered the change for a while and there was no event that precipitated the change that was announced Feb. 4 in a letter to the hospital membership.

COMPENSATION: Reviewing the IRS 990 forms for the hospital, there were three salaries that jumped out: a $1.96 million payment to Feit in 2010 and payments of $1,047,000 to CFO Ken Jensen and $1,044,000 to general services vice-president Vern Brown. These were management retention bonus that the board put in place to ensure that the key management team stayed together, Sensiba explained. Once the plans vested, then the retention bonus was payable in one year, which accounted for the salary spikes. Jensen was paid $532,000 the year prior, while Brown received $350,000.
FUTURE: ValleyCare is an unusual non-profit because its ultimate governance is the 1,400 members who have invested in the hospital. They elect the board. The community raised money back in the 1960s to build Valley Memorial Hospital in Livermore on East Stanley Boulevard. Those who contributed $100 or more in those days (and for the next few decades) became members of the corporation. The membership would have to approve any sale or formal financial partnership.
The volunteer board, Sensiba said, is driven by its mission to provide quality health care to the people in the valley. If there was a partnership or sale that would ensure that mission was met going forward, then the board would need to do its duty and bring it forward to the membership and the community. He also pointed out that the requirement for a corporate vote ensured that there would not be secret deals.
Sensiba, a certified public accountant who leads a firm in Pleasanton, emphasized that he and the board are committed to transparency and keeping the membership and the community informed. The board is fleshing out its short-term plans and expects a public announcement within the next few weeks.
He said that the board will discuss the search for a new CEO when it meets this month, but said it was not urgent because the board has confidence in the management team and the interim CEO Scott Gregerson. It's also important that the board agree to its short-term and longer term strategy so members know what type of person they are looking for to lead the organization. Gregerson joined the hospital in 2012 after working for both hospitals and physicians' groups. He is an attorney and very intelligent according to both Sensiba and a number of people recommending him on his LinkedIn profile.

Comments

 +  Like this comment
Posted by livermore resident, a resident of Livermore,
on Feb 14, 2014 at 10:09 pm

Congratulation for Mr Sensiba and the BOARD of DIRECTORS commitment to transparency. Mr Sensiba\'s accounting and business consulting expertise will be very valuable in analysis, auditing and advisory for finding the reason for "increasing and substantial loss" of medical foundation year after year of total 22 million from 2009-2011. (We don\'t really know how much more loss in 2012 and 2013.)

Who is responsible for loss of medical foundation? CEO/CMO/President of medical foundation should be transparent about where the revenue created by hard-working physicians goes to? Physician members of Valleycare foundation are not reimbursed more than other competing foundations such as PAMF, John Muir or Sutter foundations. Before acquisition of primary care groups by ValleyCare, All physician offices are in the black and doing well. Why substantial and progressive loss after being acquired by Valleycare medical foundations? WHO IS RESPONSIBLE FOR MANAGEMENT?

If Mrs. Feit\'s "involuntary departure" is related to loss from medical foundation, shouldn\'t CEO/CMO/President of medical foundation be partly responsible for "increasing and substantial loss" of medical foundation which has been getting support from ValleyCare Hospital for last 5-6 years since foundation was formed. HOW MUCH LONGER HOSPITAL has to support medical foundation? IS NEW POTENTIAL PARTNER HELPING VALLEYCARE HOSPITAL FINANCIALLY WILLING TO SUPPORT FURTHER INCREASING AND SUBSTANTIAL LOSS OF MEDICAL FOUNDATION?


 +  Like this comment
Posted by Concerned resident, a resident of Livermore,
on Feb 16, 2014 at 8:43 am

Valley care offered top notch medical care and my family had upmost respect for nurses and staff of valley care. The problem lies not in the healthcare provided but the politics. The medical foundation,ran by people that have not worked in the clinical environment have taken successful caring private practices and turned them into corporate offices. Staff are told what to say what to do obviously these people knew how to provide top quality care based on their patient satisfaction and full schedules from their days of orivate practice. It is so sad to see the great physicians of valley care being treated like children when they don't know what told to do. PAMF has the same model that the foundation is trying to follow,but PAMF has people at the top that know what they are doing. Failure starts at the top. What organization,in a small hospital,foundation needs CEO,COO,CMO,President and multiple directors.

Marci Feit did follow her goals to set this up. But due to other directions taken she was unable to follow up in those who caused so much of the demise of valley care. I know all this because my physician left valley care after 15 years as part of a well known private practice and I chose to follow my doctor.


 +  Like this comment
Posted by Billie, a resident of Ruby Hill,
on Feb 17, 2014 at 2:46 pm

Well, I\'m not surprised how things are ending up at Valley care. As many people learn, at some point boards get lazy and start rubber stamping the executives whims, including salaries and special benefits that add up to a lot of money. Most residents have no idea how much money, their taxes (and fees) go to bogus projects and compensation.

Wake up neighbors. How much are you paying for power, garbage collection or water? How much of that money is for executive perks?


 +  Like this comment
Posted by Pleasanton Resodent, a resident of Carlton Oaks,
on Feb 19, 2014 at 12:38 am

If the foundation has lost $10 million dollars, with negative assets of 22 million--- who is going to pay this? Are the doctors responsible?? Administration??? Taxpayers?? or the members of the corporation?

If it is taxpayers, the Board and Mrs Fiet should be sued for incompetence.


 +  Like this comment
Posted by lab diane, a resident of San Ramon,
on Feb 20, 2014 at 4:22 pm

Marcey Feit needed to go along time ago. She was a sorry excuse for a CEO! As a former hospital employee, I could see clearly she was out to gratify her enormous ego. I say good riddance.


 +  Like this comment
Posted by livermore res, a resident of Livermore,
on Feb 27, 2014 at 5:41 pm

Feit could not do anything or spend any amount without Board approval, so if there is a financial concern the CFO and and the board would be the ones to blame. The stress that ALL HEALTH CARE orginzations are under is only going to get worse, not better. the amounts of money they collect from insurance and MEDICARE ETC is going down. The system will need to find a big brother with deep pockets to carry them. Feit was a ACE HEALTHCARE worker, that rose to the top because there was nobody else that could. She did the best she could for 40+ years. Now all of a sudden the newly elected board has all the answers? It\'s easy to be a "back seat driver" when you didn\'t enter the company at the bottom and spend 40+ years working your way up. lets see you all do that! then you will be qualified to throw stones.


 +  Like this comment
Posted by Valley Care Assoc, a resident of Grey Eagle Estates,
on Feb 27, 2014 at 5:50 pm

Over the past week additional key people have given notice, or plan too.
Several Doctors are now leaving the system or are planning to in the coming weeks. Some are going elsewhere, and some are leaving healthcare all together. Not only is there NO CONFIDENCE in the new leadership and direction of Valley Care, but there is NO CONFIDENCE in what is going to happen to the US healthcare system in general.


 +  Like this comment
Posted by Thanks Obama!, a resident of Ruby Hill,
on Feb 27, 2014 at 5:58 pm

I am sure the the balance sheet of Valley Care and every Hosptial in the country would be fine if we could all just agree to pay for own healthcare. It's NOT A RIGHT! IT'S A privilege! YOU should NOT EXPECT TO GET THE SERVICES OF ANOTHER PERSON FOR FREE! If you can't pay for your own Healthcare then go find a dumpster somnewhere, crawl in it and die. But stop flooding the hospitals with people who can't pay.


 +  Like this comment
Posted by Livermore Joe, a resident of Livermore,
on Feb 27, 2014 at 6:25 pm

Oh, Let me get this straight, We are all concerned about Losses here in the Valley?
Why don't we take a long close look at a little place called the lawrence Livermore Lab? They have losses in the Billions, they have some of the highest salaries around,and nobody ever says anything? That place sucks so much tax dollars that you can hear the sucking sound in Walnut Creek!
Lets not forget, it's not uncommon for every hospital to have some losses on their books, they have to provide their service even if you can't pay. How many other business could stay open if they had to do that? How about Wente? May I have a couple of pallets of wine please? oh but I can't pay for it.


 +  Like this comment
Posted by corporate member, a resident of another community,
on Mar 2, 2014 at 1:05 pm

Well it is certainly going to be interesting to see how this Board is going to balance the budget for the first time in "5 years". I guess I'm confused if it has been in the red all this time, why did the Board grant pay raises, retention bonus' & bonuses? The bottom line in any health care system is to cut costs, programs get cut i.e. out-patient cardiac rehab, the nursing school, LifeStyle Rx to name a few. Who knows what else is on the chopping block. The next thing will be to bring in more LVNs & aides to replace the RNs. Remember corporate members you can prevent your community hospital from being torn apart.


 +  Like this comment
Posted by past employee, a resident of another community,
on Mar 7, 2014 at 8:40 am

I just heard that more of the leadership team all ValleyCare has resigned or taken retirement.


 +  Like this comment
Posted by 680 Sam, a resident of Val Vista,
on Mar 31, 2014 at 4:13 pm

Does anyone have any idea HOW MANY Medi-cal (welfare) patients are seen at ValleyCare? Go into their ER on any night and you will see what your tax dollars are paying for! 95% of ValleyCare's ER patients are NOT PAYING for their ER services! The California taxpayers are.
What baffles me is that San Ramon Regionals ER has LESS than 1% Medi-cal patients. They are 20 minutes down the freeway from ValleyCare. Why the difference?


 +  Like this comment
Posted by Jack, a resident of another community,
on Apr 14, 2014 at 10:04 am

Great news that Feit is gone! I think Mary Feit was only interested in padding her already overflowing wallet. The care my family and I received at ValleyCare was horrendous! I could write a book about it and all the huge and very serious mistakes made by Marcy herself and some staff members, Hopefully, the hospital can get things together so that patient care improves.


 +  Like this comment
Posted by Lucy, a resident of Downtown,
on Apr 23, 2014 at 1:26 pm

The wages and perks paid to Marcy and many of the executives are outrageous for a community hospital. The board has ultimate responsibility for not taking action sooner and reconizing how careless management contributed to the losses in the past few years. Healthcare is a tough business and I hope the new CEO has the support to correct past mistakes, assuming it's not too late.



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