There is a role for government at all three of our levels – local, state and federal. Government at the local level is best at understanding the needs of local constituents to which it is directly delivering services. The major pillars of our community are included here – city government, school districts and hospitals. State and Federal governments are more effective in ensuring that we have the physical and regulatory infrastructure necessary to protect our citizens in need and ensure the private sector has an opportunity to compete and thrive. I am a believer in Schumpeter’s theory of “creative destruction” as it is generally used today and as we have observed, experienced and benefited from here in Silicon Valley.
The enterprise Hospital district is a unique construct in California. Its state granted charter, as enumerated in Health & Safety code secion 32121(j), is to provide “health services, including but not limited to outpatient programs, services and facilities, retirement programs, services and facilities… or other health care programs or services and facilities and activities at any location within or without the district for the benefit of the district and the people served by the district.”
This charter, which realistically acknowledges that we can’t and don’t put up literal or physical walls preventing people in adjacent communities from receiving healthcare services from hospital districts also provides significant benefits to healthcare community residents. While El Camino Health does provide uncompensated care for all comers, including people who reside outside the district, roughly half of all services the hospital provides are to citizens from outside the district. The contribution margin out-of-district residents generate from the services they receive essentially subsidizes the operations of the hospital for the district residents – allowing El Camino Health to provide superior quality to what it could if it only provided services to district residents.
El Camino Health is a hybrid; a hybrid that, depending on governance and management can be the best or worst of both worlds. In a best case scenario, as a locally owned and managed institution, actively and transparently engaged with the community, we have been able to provide nationally recognized quality that is aligned with community needs. In a worst case scenario, as we have seen with other districts around the state, where the hospital is not controlled by the district and its publicly elected officials (including the sale of the hospital to an entity with minimal community ties who treat the hospital purely as a financial asset), hospitals’ quality can atrophy, leading to poor financials and a downward spiral of diminishing quality and financials.
As a nation we face an unsustainable growth in our healthcare expenditures which have grown from 7 to over 18% of our GDP -- approaching $4 Trillion in too short a timeframe. We have been unable to develop the proper structure to provide high quality, affordable health care insurance for everyone in the country. This challenge has not been solved anywhere around the world; while US’ healthcare expenditure as a share of GDP is the highest, the expenditure growth rate is comparable among most developed countries over the past several decades
In local communities each hospital job supports two other jobs. Until the growth of Google, El Camino Hospital had been the largest employer in Mountain View and supported jobs throughout the county.
The mission of our hospital must be to focus on providing the best quality healthcare for the most people in our district (and surrounding areas) – now and far into the future. We have undertaken important scenario planning analysis that will enable us to respond to different potential structural changes in the healthcare industry and reimbursements as defined by lawmakers in Washington and Sacramento. It is not our charter to solve these broader problems, but to anticipate the needs of the community and prepare to serve this community as it evolves. The board’s responsibility is to be the long term steward of this community asset and ensure, as we approach our 60 year anniversary that we remain a vibrant, independent institution for the next 60 years.