Palm Drive Hospital, again in financial trouble and facing a $750,000 deficit, will be looking to its fund-raising arm, the hospital care foundation, for help.
"We are going to dig ourselves out of this hole using a lot of tools. The affiliation with Marin General, sound business practices, increased revenue and a strong relationship with the community through the foundation," said Chris Dawson, treasurer of the Palm Drive board. "They have to be part of our future."
However, relations between the Sebastopol hospital and the non-profit Palm Drive Health Care Foundation have deteriorated.
Hospital directors complain the foundation didn't fund the initiatives it asked for last October, including an expensive digital mammography machine that was supposed to draw patients who are now going to other Sonoma County hospitals.
They also say the foundation, which was started in 2002, is funding other health care programs in the community instead of solely funneling money to the hospital.
"It has been pretty tenuous," hospital director Frank Mayhew said. "I got pretty upset with them at a couple of meetings. They weren't funding us, they were funding other stuff that was not Palm Drive. I asked them to change their name."
Foundation members, however, blame a high turnover of hospital chief executive officers, nine in five years, and the lack of a cohesive business plan that they can sell to donors.
"I don't think the foundation can get the hospital out of the mess it is in," said Dan Smith, a former hospital board member who is now on the foundation board. "We could be doing fund-raising if the hospital could develop a strategic plan, a turnaround plan."
Palm Drive's interim chief executive officer, Rick Reid, will be presenting a 90-day plan to the district financial committee on Thursday.
Reid said his plan is meant to stem the losses for the next three months so that on June 30, when the fiscal year ends, the deficit will be $750,000 to carry into the next year.
As of the end of February, the hospital had a deficit of $864,158. When the hospital board adopted a $30.4 million budget a year ago, it had projected it would have a $914,287 surplus for the same period.
Hospital officials said that last October, they asked the foundation to pay for a digital mammography machine, $340,000; the cost for a consultant to help recruit new doctors, $20,000; salary for a social worker, $50,000; radiology equipment, $150,000; and a chaplaincy program, $10,000.
As an indication of how relations have soured, the foundation said the requests were discussed but never formalized and then an interim chief executive officer said the hospital may not need a digital mammography machine after all.
If the hospital wants an expensive mammography machine, it needs to accompany the request with a business plan so the foundation has something to show donors, said Stewart Goldberg, foundation president.
"It gets pretty difficult to raise money without a real business plan," Goldberg said. "The foundation is 100 percent behind the hospital, we have to figure out a way to do it in a positive fashion that will make an impact. And if a digital mammography machine is the answer and will generate all kinds of revenue for the hospital, we will try to go out and raise the money."
The foundation also has been struggling fund raising, which Smith, who has personally donated $2 million to the hospital, blames in part on the hospital's shaky finances.
The foundation raised $358,918 in 2010, the last year that figures were reported to the Internal Revenue Service, compared to $585,894 in 2009.
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