Mendocino Coast District Hospital Request for Proposal (RFP)

Mendocino Coast District HospitalApril 11, 2019

Mendocino Coast District HospitalRequest for Proposal (RFP)

Menciocino Coast District Hospital (“MCDH”) is a 25 bed Critical Access Hospitallocated in Fort Bragg, California and is accredited by the Joint Commission. Its

services include a 24-hour emergency department, intensive care unit, obstetrics,

inpatient acute care medical/surgical unit, swing bed unit, pharmacy, surgery, imaging,

laboratory, home health, ambulance, hematology/oncology, respiratory, physical and

occupational/speech therapies and a rural health clinic. Since 1971 MCDH has providedhealth care services to the residents of Mendocino County who reside along a 70-mile

stretch of rural coastal communities. MCDH is a vital resource for the residents and

visitors along the somewhat isolated coast of Mendocino County.

It serves a District of approximately 23,500 individuals. The District is divided into a

primary service area and a secondary service area. The primary service area consists of

seven zip codes, encompassing the communities of Westport, Fort Bragg, Caspar,

Mendocino, Little River, Albion, Elk and Comptche. The secondary service area consists

of three zip codes in the southern coastal communities of Gualala, Manchester and Point

Arena.

MCDH is unionized and UFCW 8 is the recognized representative of all the employees

paid on an hourly basis including regular full-time, regular part-time and per diem

employees (excluding supervisor, management and confidential employees).

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MCDH is a 501 (c)(3) non-profit entity and is classified as a Special District in the State

of California. For almost 50 years, MCDH has been dedicated to a mission of making

a positive difference in the health of our rural community. MCDH’s vision is to:

• Play a vital role in the overall health and well-being of the community and will be

the key element in the healthcare system serving the needs of our community.

MCDH will provide leadership to enhance the efficiency, coordination, quality

and range of services provided within our rural healthcare system.

• Continue to be the healthcare provider and employer of choice within our

community by implementing technology updates and achieving superior clinical

skills.

• Have a positive impact on health by encouraging personal and community

responsibility for health and wellness. Our efforts will play a decisive role in

people choosing to stay in our community or to locate here.

After careful thought and deliberation, the Board of Directors of MCDH (the “Board”) has

determined that the timing is appropriate to seek options regarding a potential lease or

sale. The Board is committed to finding the right lease partner or buyer to ensure that

exceptional local healthcare continues continue to be delivered on the Mendocino

Coast and the surrounding area.

The purpose of this Request for Proposal (RFP”) is to provide a structure which allows

the Board to differentiate between potential leasers or buyers and to give each

responding organization an opportunity to articulate what makes them an attractive

option for the community. In considering proposals, the Board is interested in identifying

a partner having the following nine characteristics:

~ A commitment to the continued provision of quality healthcare services to the

residents of the Mendocino Coast and the surrounding area

~ A strategic vision for the future of MCDH

~ A demonstrated culture of quality and accountability

~ A proven track record of operational success to ensure the ongoing vitality of MCDH,

as a stable and professionally rewarding organization for its employees and medical

staff

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Sufficient capital to allow MCDH to maintain high-quality care for its patients and

improve its physical facilities

A system reputation that will add value to MCDH’s existing brand and reputationwithin our community and among physicians, consumers, and insurance plans

Capabilities, facilities, clinical integration, leadership, and strategies necessary tobe well positioned for success in an era of healthcare reform

I A commitment to transparency in dealing with all its constituencies

• A demonstrated history of following through on its promises and commitments

Please be assured that all organizations submitting a response will be accorded fair

and equal treatment in the review of their respective proposals. The District’s

interim CEO will be available for questions or to provide additional information whenever

necessary.

To be considered responsive to this RFP, your proposal should address the

elements outlined below and in the following pages. Not all transaction elements

may be relevant to all participants.

Background Information on Your Organization

• Business and Hospital Operational Experience

I Describe your business and indicate the number of years of hospital

operational experience you can bring to MCDH through your operations,governance, and management.

• Organizational Structure and Current Scope of Services

I Describe the organizational structure or structures under which your business

or businesses are conducted (including joint ventures and partnerships) andthe current scope of services you provide.

• Please provide the following information regarding your organization:

~ Organizational chart

~ Description of your management, including key management personnel

I Description of your relevant experience with the type of transaction proposed

~ Tax status

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Description of the nature and extent of medical school affiliations, if any

Locations of facilities and businesses operated

Audited financial statements for the most recent three (3) fiscal years.

Description of the basis on which you believe that you have sufficient current

and future financial resources to support the payments due under the terms of

the proposed transaction and to operate MCDH on a basis which is consistentwith the commitments set forth in this RFP.

Identification and contact information for your team members, including legal and

financial advisors, if any.

Description of programs you have implemented that have changed

healthcare in the communities in which you operate.

Strategic Planning

Describe your strategic focus, plan, direction, and goals, as well as the

challenges you face in achieving these objectives, and how you plan to addressthese challenges.

Describe how you see MCDH helping your system accomplish these goals and

how you plan to integrate MCDH into your system.

Legal Actions/Inquiries

Describe any prior or currentipending state or federal legal actions/inquiries

involving your organization, your management, or Board of Directors.

• Ethical and Religious Directives

~ Describe any ethical or religious directives of your organization that would

impact the future operations of MCDH.

Structure of the Proposed Transaction

Describe the specific amount, terms, timing, and form of capital commitments you are

prepared to make in a relationship with MCDH.

Describe your commitment to assume all pre-transaction and post-transaction

liabilities of MCDH and provide indemnification of MCDH against such liabilities,

along with evidence of appropriate financial resources to support such

indemnification.

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Legal Entity for Agreement with MCDH

Describe the legal entity that will enter into an agreement with MCDHregarding the transaction that will own, operate, or hold any required

licenses for the delivery of healthcare services at MCDH.

Board of Directors

Describe the proposed governance structure and the ongoing role of MCDH’s

current Board.

Comm tmentslObjectives

As to each of the Commitments set forth below, you are asked to agree to the

Commitment1 describe how you are handling similar commitments within your existing

organization, and how you intend to ensure meeting the Commitment if you arechosen as the successful party to negotiate with MCDH.

• Operational Commitments

~ Describe your commitment to operate MCDH as a full service acute carehospital for the foreseeable future.

~ Describe the proposed management organization structure for MCDH following

the closing of a transaction.

• Rights of Reversion

b Describe your commitment to provide MCD H, or a surviving organization, with

rights of reversion of the operations and assets of MCDH in the event youfail to meet your commitments or if there is a bond defauft or sale,

insolvency, or bankruptcy of your organization.

Maintaining Charitable Purposes and Meeting Community Healthcare needs

Describe your commitment to maintain the mission/vision of MCDH, and

collaborate with the District to meet the current and future healthcare needs ofthe community.

• MCDH StaffingI Retention of current MCDH staff, who are currently under the employment of

the current lessee of the Hospital.

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D Describe your commitment to retain MCDH employees following the closing

of a transaction.

D Describe any anticipated employee benefit changes.

D Demonstrate any staffing or other plans to achieve economies of scale.

Clinical Services and Physician Recruiting

Describe your commitment to take steps to ensure that, subject to patient

choice, all medical services for which there exists financial capability at MCDH

will be performed locally rather than at outlying, tertiary care facilities,

whether or not owned or controlled by your organization.

Describe your commitment to maintaining existing clinical services at MCDH

and indicate the minimum timing that you are prepared to make for maintainingsuch services.

Describe any new services you anticipate implementing during the next five years.

Describe commitment to expend significant financial resources to recruit new

physicians to the community and grow MCDH’s current complement of clinicalservices, and specify what level of capital commitment you are making to do so.

Describe which, if any, clinical services may not be maintained at MCDH.

Clinical Quality Improvement

Quality Measurement

Describe your commitment to develop and implement a proven plan for

clinical quality measurement utilizing national and regional benchmarks and

accountability.

Staff DevelopmentDescribe your commitment to develop and implement a proven plan for

improvement of the medical staff, nursing staff and non-physicianpractitioners with corresponding education and training programs, includingdevelopment and implementation of centers for excellence in specific clinicalareas.

• Capital Improvements

Describe your commitment to needed capital improvements, including funding of

growth initiatives intended to maintain facilities, equipment, and other capital

items at a state-of-the-art level for comparable community hospitals.

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Mendocino Coast District HospitalApril 11,2019

Competition and Right of First Refusal

Describe your commitment (a) not to own or operate any other entity which

competes with MCDH in its service area and (b) to afford MCDH or a survivingorganization with the right of first refusal in the event you should seek to sell the

assets or operations of MCDH following the closing.

Strategic Vision

Describe the strategic vision you have for your presence and role in Mendocino

County. How does MCDH fit into and allow you to achieve that vision? Describe

the strategies that are currently beyond the reach of MCDH and that are

possible with your involvement to deal with evolving payment systems,

including a well-designed strategy for Accountable Care and population health

management readiness.

Information Technology

Describe your commitment to provide MCDH with information technology that

will support clinical excellence, integrate MCDH with other system facilities,

meet all federal and state requirements for funding, and promote participation

and success in evolving payment structures.

After receipt of Proposals, MCDH may, based at its sole discretion, select

organizations with which to continue affiliation discussions. MCDH requests that your

Proposal be as specific and detailed as possible. Site visits at MCDH can be

arranged prior to the Proposal submission deadline.

Proposal Submission Deadline: May 10, 2019

Contact Person:

Wayne C. Allen Mendocino Coast District HospitalInterim CEO 700 River Drive707-961-4630 Fort Bragg, CA. 95437wallen mcdh net

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Mendocino Coast District Hospital Request for Proposal (RFP)

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