Sebastopol man invests heart, fortune in reviving hospital for western Sonoma County
All around Dan Smith, medical staff in scrubs and office workers in button shirts go about their urgent business, reviewing health care procedures, fine-tuning administrative processes, testing medical equipment - all in preparation for the rebirth of a small community hospital in Sebastopol.
The west county businessman and philanthropist, dressed in casual clothes and donning an even more casual smile, moves about the new Sonoma West Medical Center as if he owns the place. Staff are addressed warmly, like they are Smith’s own employees. When he needs a room for an impromptu conference, even hospital CEO Ray Hino’s empty office is open to him without asking.
Smith, who has done more than anyone to keep the former Palm Drive Hospital alive since it became a public facility 15 years ago, does not own the medical center. But there is much at stake for him as the hospital prepares to resume operations 16 months after it was closed.
A self-made software millionaire with humble beginnings, Smith and his wife, Joan Marler, have contributed nearly $9 million to the troubled hospital in donations and forgivable loans over the years. They also have donated countless hours of volunteer work.
Smith was there when it became a publicly run district hospital in 2000, rallying voter support for taxpayer subsidies to acquire and operate the facility. He helped raise money to prevent its closure in 2007, during the hospital’s first bankruptcy, and he has been instrumental in devising and financing the physician-led model he and many others hope will soon resurrect the facility and ultimately bring it out of its second bankruptcy.
Amid a chorus of skeptics who believe the next iteration of the hospital is sure to fail and fall victim to an evolving health care landscape that is unforgiving to small rural hospitals, Smith and Marler are defiant. At 69, Smith said he and his wife want to leave a legacy - a sustainable hospital for the west county that can both make money and save lives.
“We can’t take our money to our graves. Why not invest it in the future of our community?” he said.
The hospital, he said, can mean the difference between life and death for people in the west county. “I came to know a lot of people whose lives would not have been saved (without the hospital),” Smith said.
Far more than his previous efforts to bail out the hospital financially, Smith is behind every major decision surrounding Sonoma West Medical Center, a privilege afforded by both his money and his ability to devise a business strategy to reopen the shuttered facility, possibly by the end of the week.
“He fundamentally controls everything that’s going on over there,” said Sebastopol mechanical engineer Jim Horn, a vocal critic of Smith’s and a former hospital board director who strongly questions the viability of the new business model.
Other critics are more blunt, calling Smith an egoist and a bully, and questioning his motives. Some say he’s using Sonoma West as a platform to promote and market his tablet-based electronic health records system, which he is currently donating to the hospital at no cost.
Smith and Marler are familiar with the criticisms but alternately dismiss such claims as myth, cruel speculation and unfounded attacks that no longer affect them as they and other hospital supporters plow forward.
“This is all about perseverance,” Smith said one recent afternoon, sitting next to Marler in the outdoor patio of their Sebastopol home. “This is setting your mind to something and never giving up, even when things look really bad.”
Smith said he almost walked away from the hospital in its latest crisis, soured by his previous involvement that he said was plagued by “politics,” something he said he doesn’t do well.
When Marler learned the hospital was slated to be closed last spring, she called her husband in tears, telling him, “it’s not acceptable to let it die.” Smith told her he didn’t want to get involved, remembering previous attempts that went sideways.
But Marler insisted.
“So think of this - your wife is giving you the choice, you can be a schmuck or a hero,” said Smith. “There’s no middle ground ... I’m thinking to myself this conversation is not going well, so I put it to her: ‘You keep talking to me like this and it’s going to cost you millions and millions and millions of dollars of your money.’”
To which she replied, “I don’t care, you know, if it costs everything,” she said.
“We didn’t have anything before he sold his (software) company. We were both brought up as poor people. We don’t live like rich people,” Marler explained. It’s a point the couple makes often.