Parting words from the CEO

Wayne Ferch has a distinct perspective on health care. He’s spent a quarter-century working in medical administration, including the past 10 1/2 years at Feather River Hospital in Paradise.

During his term as president and CEO, Feather River has undergone a number of changes—the most conspicuous being physical, including construction of a clinic facility on the Skyway and a new emergency room at the Pentz Road hospital.

In the next few weeks, Ferch will head to Hanford, 30 miles south of Fresno, to run the Central Valley Network, a three-hospital health system soon adding a fourth. (Adventist Health, which owns and operates both Feather River and the Central Valley Network, recently announced Kevin Erich as his replacement, effective May 16.) Ferch grew up in the San Joaquin Valley community of Lindsay, “so it’s a little like returning home,” he said.

In the midst of his big transition, the outgoing CEO sat down for a half-hour interview in which he shared his views on local health care and what federal reform could mean for area residents and their hospitals.

CN&R: So, you’re leaving—was it something we did, something we said?

Ferch: [Laughs] No, not at all. I’ve always had a philosophy to try to leave on a high note, when things are going well. Although, now that I think about it, I realize it might be better to leave when you’re on a low note, because then it doesn’t feel so bad that people are disappointed you’re leaving.

Feather River is doing incredibly well; it’s at the top of the mark in terms of quality and results. A new opportunity came up, and I figured it’s time to take the challenge of a larger network.

You’ll come back sometime to see the finished handiwork?

Absolutely. I want to see the new ER. I’m staying within Adventist Health, and we’re pretty close between the hospitals, so I’ll definitely be working with Feather River and working with the new CEO to make sure the transition is very smooth.

During the time you’ve been here, what changes have taken place that might not be as visible as a facilities expansion?

One of the subtle things that’s happened is our Quest for Excellence, and that’s permeated every level of the hospital. We’re looking for national best practices and results in everything we do—and the nice thing is, in the surveys we’ve done, patients are seeing that … although they may not know a lot of the details, like our infection rates being best in class and the mortality rates being 40 percent of what’s expected.

A big thing on people’s minds right now is finances, with health-care reform so long in the headlines. What would you say is the state of the financial health of Feather River?

I would call it guarded. It’s good, stable, but all of health care is under siege financially. The operating margins of all hospitals in California are razor, razor thin. With the state wanting to cut what it pays for Medi-Cal—and already we’re not really paid enough for the Medi-Cal treatments we do now—it’s a tough environment financially for hospitals.

Give us your take on health-care reform.

It’s worrisome because there are a lot of broad principles in the law, but what we’re finding is there are few specifics—and, as we’re wrestling with the specifics, some of them are turning out to be very optimistic and probably not realistic.

For example, under health-care reform, the plan was to have everybody on an electronic medical record by a certain date. Well, there are hospitals that simply can’t afford it, plus it takes a lot of time to do that. We’ve been on a march toward an electronic record for probably eight years, and we’re ahead of most.

Part of health-care reform hinges on savings that are supposed to come from the electronic record, but our experience is that it doesn’t save money. It is safer, and it provides better access to data, which are good things, but I personally don’t believe there’s any savings incurred through an electronic record.

Another way they were planning to pay for health-care reform was by cutting Medicare payments to hospitals. Again, the details are lacking; the broad brush shows a $4 million cut a year to Feather River Hospital, and that certainly is not sustainable. That’s more than our entire bottom line.

The $4 million cut was supposed to be offset by the uninsured patients all of a sudden becoming insured. Fact is, a hospital like Feather River is Medicare—we treat Medicare patients [predominantly]—and while there are some underinsured patients on the Ridge, there aren’t a lot of uninsured. We’re not the same as a hospital in Chicago or downtown L.A.

So, the idea of health-care reform is good, but it disproportionately affects different hospitals.

How will this affect other local hospitals?

Butte County is somewhat similar. Enloe also will experience a pretty dramatic cut to Medicare. Enloe probably has a little less Medicare than we do, but they also have the trauma system—and trauma isn’t something hospitals go into because of profit, they do it because it’s the right thing to do. Unfortunately for Enloe, they don’t always get adequately paid for everything that they do, so I’m concerned for Enloe as well.

From your vantage point, what can people around here expect over the next five years in health care?

I think people in Butte County are very lucky. In Paradise, Chico and Oroville, those three main hospitals are quality institutions, three places where the physicians are of stellar quality. Even though at Feather River we like to compete with them and try to be better, they’re all doing the same thing, and it’s good for the community. I think, as a result, people in this area have access to some of the best medical care that’s out there.

I’ve been asked many times, “What’s the strategy for health-care reform?” Frankly, the strategy for health-care reform is very simple: Be excellent at what you do. If you take care of patients well, take care of your staff well, take care of your physicians well and are responsive to your community, I don’t think there’s a lot to worry about with health-care reform. Ultimately you’ll be successful if the community rallies around its hospital because it feels it is its hospital.