New SHCHD CEO’s Record of Rural Health Advocacy

When Matt Rees, the new chief executive officer of the Southern Humboldt Community Healthcare District, was named a “Healthcare Hero” by Nevada Business Magazine back in 2008, it was because he had proved himself an able leader of a small rural hospital.

The magazine write-up mentioned that as CEO of Pershing General Hospital in Lovelock, Nev., located 90 minutes outside of Reno, Rees had brought about a financial turnaround.

In particular, the magazine noted that the hospital’s gross revenue had tripled after five years of Rees’s leadership, from $6 million to nearly $18 million.

Several years later, when he was running the show at Mayers Memorial Hospital in Fall River Mills, Calif., a town east of Redding, Rees received another award: the 2014 Advocate of the Year Award from the Association of California Healthcare Districts.

As its title suggests, this award was different. It didn’t have to do so much with strengthening Mayers Memorial’s financial position, although gross revenues did go up — from $22 million to roughly $30 million — during the five years Rees was in charge there.

Instead, the award had more to do with another hat Rees wore while he was at Mayers Memorial: that of an advocate, a role that led him to work cooperatively with the California Hospital Association, a Sacramento-based lobbying group that is influential on health care matters.

“Matt Rees really stood out with his engagement on issues that were significant for his [hospital] facility,” such as capital improvement projects, recruiting of staff and ensuring access to care, commented Ken Cohen of the Association of California Healthcare Districts, the outfit that gave Rees the award.

Rees was unusual in his willingness “to meet with legislators and staff and with being available to testify at legislative committee hearings,” Cohen added.

Advocating on important issues, it turns out, may have played a part in the decision last month by the Southern Humboldt Community Healthcare District’s governing board to hire Rees to replace outgoing CEO Harry Jasper.

In an interview last month, board member Gary Wellborn said Rees’s involvement with CHA was a positive because it indicated that he was plugged into the “outside [health care] network.”

“We’re very isolated up here. If you don’t have the contacts, you’re sheltered. You need outside contacts. There are changes going on in health care daily,” Wellborn said.

What Rees earned recognition for with the 2014 award, at least in part, was his involvement in a battle to reverse massive cuts to the state’s Medi-Cal program — cuts that among other things would have resulted in a 25 percent reduction in reimbursement rates to skilled nursing facilities.

The magnitude of the cuts meant that most hospitals with such facilities — which included Rees’s Mayers Memorial as well as Jerold Phelps Hospital here in Garberville — would likely have been forced to shutter them.

After CHA filed a lawsuit contesting the cuts, the matter was before the courts. But after a negative court ruling, Rees got busy.

“I went to my employees and told them we would have to close down one of our skilled nursing units” if the cuts stood, Rees related, explaining that Mayers Memorial had two such units.

“I met with employees at both of our [skilled nursing] facilities and they asked what they could do. I said: ‘We need to put pressure on the legislative people.’”

To apply such pressure, Rees knew that it would be necessary for both him and his staff to be directly involved.

“Some of the bigger hospitals have a specialized person who contacts legislators [about issues important to the healthcare district]. But at rural hospitals, you don’t have that,” Rees explained.

One thing Rees did was reach out to CHA. A second thing was to lay out a line of attack with his staff.

“We designed a plan to get community support [against the cuts] and to put pressure on elected officials to overturn [the cuts],” Rees said.

A signature-gathering drive along with a letter-writing campaign was launched. Rees made frequent trips to Sacramento to testify at legislative hearings. And, at the suggestion of one of his staff, a video was created. It communicated the impact of the cuts on Mayers Memorial through a series of interviews with residents of the hospital’s skilled nursing facilities and their family members.

The video, posted on YouTube, was “incredibly helpful” to the lobbying effort against the cuts, Pat Blaisdell, CHA’s vice president for continuum of care, recalled last week.

“It demonstrated the value of the services” provided by skilled nursing facilities, said Blaisdell, who added that the video “inspired” CHA to produce videos of its own emphasizing the importance of skilled nursing facilities at other hospital districts.

“Hospital-based skilled nursing facilities exist all over the state but they are particularly critical [in rural areas where they are] sometimes the only skilled nursing facility in the community,” Blaisdell explained.

Jan Emerson-Shea, who handles external affairs for CHA and was directly involved in the production of these other videos, confirmed that the one produced by Rees and his staff was the inspiration for the broader CHA effort.

The videos, shown to legislators and the media and posted on the organization’s “advocacy website,” were intended to “educate decision-makers and put a real face on the people [who would be] impacted by the cuts,” she said.

As for Rees himself, Blaisdell said he proved adept when it came to communicating with legislators. “He stood out. He became one of our go-to folks” in the lobbying effort against the cuts, Blaisdell said.

“We needed to tell the rural story as effectively as we could. And Matt was great at that. He was particularly good at demonstrating how skilled nursing facilities supported the whole rural community,” she went on, adding that Rees was also utilized in terms of communicating with the press.

Peggy Wheeler, CHA’s vice president of rural health care and governance, confirmed Rees’s central role. “I could count on Matt Rees. He stays keyed in,” Wheeler related.

“Matt is one of those rare leaders who truly understands the value of advocacy in creating success and financial and operational sustainability for rural and critical access hospitals in California,” she added.

The opposition to the cuts culminated in a massive rally held on the steps of the State Capitol in June 2013 — a rally at which Rees was in attendance. Later that year, the Legislature removed the cuts “prospectively,” as Emerson-Shea put it — in other words, into the future.

But there was nothing stopping the state from applying the cuts, which took the form of reduced rates of reimbursements and were in effect for more than two years, retroactively.

“Hospitals were receiving the full rates but they had this hanging over their head — that the state could take millions [of dollars] back by retroactively applying the rates,” explained Emerson-Shea, who added that that possibility came to be known as “clawback.”

Clawback, it turns out, was eliminated last week thanks to the passage of legislation by both the State Senate and the State Assembly.

“So hospitals are now protected and won’t see their [Medi-Cal] rates cut,” Emerson-Shea said.

At his new hospital, in other words Jerold Phelps, the demise of clawback means that “a liability on the books for over $250,000” has been removed, Rees said last week.

It also means that, while it took a while, the lobbying effort Rees was involved in has ended up being an unqualified victory.

“Getting good things passed and bad things reversed, that’s what advocacy is all about,” Rees said matter-of-factly.