Financial reform the goal at Barton Hospital |

Financial reform the goal at Barton Hospital

Mike Pottage

The current revolution in medical care is not being driven by the advance of science, but by the escalation of expenses and the responses to out-of-control costs.

Barton Memorial Hospital isn’t immune to the financial infection that has spread throughout the land. Barton in April launched a major cost-cutting campaign conceived during a year of study by two firms of consultants, the administration, the staff and the board.

If everyone did their job properly, and the reform works, about $2.4 million will be saved on an annual basis in salaries, contracts and hospital purchases. And, it will be accomplished without reducing medical care.

The reform has a bottom-line goal, the continued independence of Barton Memorial Hospital, and a financial profile written in black ink.

Chief Executive Officer William G. Gordon says so far “it’s working.”

But smiling accountants are not always good morale boosters. Gordon and members of the 14-member board of directors, acknowledge all this change has unsettled staff, causing emotional responses ranging from concern to fear.

After all, the consultants came up with $3.5 million in salary reductions. The hospital administration opted to go for 30 percent of that amount, but even that reduced number can be viewed as a personal threat.

Change “is a real issue when you go through the entire hospital as we have done and try to redesign the way we do work,” Gordon said. Board President John Cefalu echoed, “change is going to promote dissension” particularly “when employees are insecure about their jobs. The board is adamant that people are not going to lose their jobs.”

“The unrest,” Gordon added, results when people ask themselves, “Do we really trust the administration and the board that these changes will come about through attrition?”

That issue of trust is greatly complicated by an ugly family feud pitting a group of six physicians and their legal assault on Barton Memorial against the hospital and its counter suit aimed at the Carson Valley Medical Group. It’s the type of conflict that makes tabloid headlines. The physicians continue to practice at Barton, but the legal contentions spread among staff, at the very least testing loyalties.

“We would be better off, the hospital would be better off, the community would be better off if this thing would just go away,” Gordon said. But there are egos at stake, and the group of six physicians has refused to settle the lawsuit, even on terms that could cost Barton $520,000 plus legal fees, according to Gordon. The physicians and their legal staff say it is up to the hospital to make the settlement offer, and so far, no money has been put on the table.

In fact, the group’s claims for damages are exceeded by its own legal fees, and that has become a contention in any settlement agreement.

Gordon says the hospital board, its two insurance companies and the administration are solidly aligned against a payoff.

“If healing is to take place,” Gordon observed, “it will be much more difficult if this thing goes to trial.” That trial is scheduled to start Sept. 8 in Placerville.

“It hasn’t affected the quality of care,” Gordon said, but the existence of the lawsuit contributes to the atmosphere of distrust.

These are unsettled times at Barton. Viewing the staff’s unrest, Cefalu said, “The board and administration have been open and forthright and some will accept it and some will not.” History shows “we are doing a good job, he added, citing an independent commission’s top-10-percent rating of Barton. Good medical care, Cefalu said, reflects the fact “we have a damn good medical staff” and a financial position “in the black.”

Barton Memorial is a child of the ’60s, built during the explosive expansion of medical facilities fueled, in part, by federal tax dollars, and local funds collected by the formation of an association and the sale of stock.

The rules are that 11 of the 14 board members hold a share of that original stock. “I lived at South Lake Tahoe when there wasn’t a hospital here,” Cefalu says.

He also had the experience of having a 3-year-old suddenly become seriously ill. The family took the hour and a half ambulance ride to Placerville, and later, John and Judy Cefalu became very active in the efforts to establish Barton. Judy was a charter member of the auxiliary and provided expertise to guide the Candy Stripers.

Cefalu, with eight years on the board, is not skeptical about the hospital’s future. It will, he says, remain independent and in the black. Rumors of a take-over, he said, ignore reality. “It will never happen because the association that controls the hospital would never let it happen.”

Tomorrow: Barton Memorial reinvests itself.

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