Report 2011-113 Recommendations and Responses in 2013-041

Report 2011-113: Salinas Valley Memorial Healthcare System: Increased Transparency and Stronger Controls Are Necessary as It Focuses on Improving Its Financial Situation

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of 2012-041 Response Not Implemented as of Most Recent Response
Salinas Valley Memorial Healthcare System 1 15 1 n/a 4

Recommendation To: Salinas Valley Memorial Healthcare System

To help reduce its operating costs and improve its overall financial situation, the Health Care System should continue to try to modify its employee benefits, such as paid time off, so they are aligned with industry practice.

Response

SVMHS, from the Board of Directors through the Administrative Team, wholly embraces Recommendation 3 and recognizes that the future financial stability of the health system depends on its ability to reduce overall operating costs, including the alignment of employee benefit costs with industry standards.

As a first step in addressing this objective, effective Fiscal Year 2011-12, SVMHS altered benefits available to non-represented employees by terminating the existing pension plan and creating a new plan (a 403b plan) with decreased costs accruing to SVMHS.

During Fiscal Year 2012-13, SVMHS focused on putting in place a new Chief Executive Officer (hired in April 2013) and a new Administrative Team (completed in August 2013). Since coming on board, the CEO and Administrative Team have devoted significant attention to building relationships with employees and their representatives that will facilitate making the changes required to better secure SVMHS's future.

This team also has further refined and continues to implement a strategy to carry forward additional cost savings related to benefits provided to all employees. In addition, the strategy addresses overall operational efficiencies through various labor and non-labor initiatives.

Admittedly, a goal of this nature cannot be achieved immediately and unilaterally. Opportunities to make progress arise through periodic negotiations of contract renewals with represented units. As SVMHS makes incremental progress towards the goal of overall and equitable reductions in employee benefit costs, the challenge for the hospital is to maintain stability, retain qualified employees, attract qualified candidates and meet the needs of the community.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: 10/1/2014
  • Response Date: October 2013

Current Status of Recommendations

All Recommendations in 2013-041