Request for Proposal
Overview
Following is a call to qualified professionals in the fields of hospital facilities planning, operations, finance and risk analysis for proposals to:
a) provide assistance in the on-going planning process for a health care system for the Sonoma Valley Health Care District; and
b) prepare a comparative evaluation of the projected capital costs and future operating results for alternative health care delivery systems (the “Options”) for Sonoma Valley.
Background
Like other hospitals in California, Sonoma Valley Hospital (“SVH”) is , under the SB 1953 mandate to update its hospital to current seismic standards. Measure C, a bond issue that would have provided $148 million in financing for that purpose, was defeated by the voters in April 2006. A search is now under way for a solution that will receive the 67% vote needed to pass it in a future election. During the last weeks of the Measure C campaign, several community leaders, under the banner of the Plan B Committee, assembled a small group of health care experts who reviewed the District’s business plan which was represented by Measure C, took community testimony and issued a report now known as the “Plan B Report”, a copy of which is attached. To facilitate that search, leadership from both sides of the Measure C issue has now come together to form the Sonoma Valley Health Care Coalition (“SVHCC”), a citizens group concerned with the future of the hospital in our community.
SVHCC has established an Options Committee (the “Committee”) which is charged with identifying, evaluating and prioritizing alternative development plans, assessing their implications under potential future scenarios, and recommending the economically viable Option(s) most likely to receive majority support in preparation for another bond issue election, probably in June 2007. The Board of the Sonoma Valley Health Care District (the “District”) has pledged its support and assistance to SVHCC and the Committee, and will cooperate in the activities and the funding for the studies requested in this RFP. It is anticipated that SVH will be the contracting party with the successful candidate. All direction under the engagement, however, will be directed by the Committee on behalf of SVHCC.
Objective Of The RFP
In order to make its evaluations in a timely and informed manner, the SVHCC Committee is in need of the services of an experienced consultant with extensive hands-on knowledge of the workings of small hospitals in California - hence this Request for Proposals.
The consultant selected will be expected to work with the Committee as it formulates, evaluates and compares the Options and provides the financial projections and risk analyses necessary to arrive at a Business Plan for a facility and health care system that will be sustainable over at least the life of the financing bonds – 30 years from 2008 – and beyond.
Tools And Assets Available
The successful candidate will be given access to all of the books, records, research, plans, projections and other information generated by SVH during the several years the District has been studying the issue of replacement or retrofitting of the existing hospital.
The successful candidate will also be given access to, and, unless the consultant has an in-house analytical tool that it prefers to use, will be expected to utilize, as appropriate, SVH’s business planning model (the “Planning Model”). Financial projections developed by the client will be delivered in the Business Model. A copy of the Planning Model and a brief overview is attached.
Options For Evaluation
In the process of identifying potentially viable options to be evaluated, the Committee has utilized the matrix format on pages 6 and 7 of the Plan B Report to define and evaluate alternative health care delivery systems for the Sonoma Valley. Out of the six options presented in the Plan B Report, for purposes of your proposal you should assume a base case of four Options to analyze. In making its selections, the Committee has established three “gates” through which each proposed health care system will be required to pass to be further considered as an Option. The gates are:
a. Financial sustainability
Reasonably projected operating cash flow will be sufficient to maintain the system into the foreseeable future;
b. Quality health care
The health care system\ will delivery a high standard of care, at least equal to the status quo; and
c. Basic emergency
The Committee has decided that, to be acceptable, any Option must include a Basic Emergency Room as defined under California law.
The health care systems alternatives described on Exhibit A attached, should be considered examples of Options that pass gates b. and c, although they have NOT been accepted or rejected by the Committee. It will be the consultant’s job to determine if an Option passes gate a. - the financial sustainability requirement.
It is possible that the Committee will produce two or more additional sub-sets for Option D. Including the incorporation of one or more public/private partnerships for certain medical services. If such proposals are considered potentially viable components of a health care system for Sonoma Valley, they will be incorporated in a separate Option to be evaluated and the consultant will be so notified.
Scope Of Work
The first task will be to develop an analytical framework to evaluate the various proposals. The objective of this task is to ensure that a common ‘measuring stick’ is used in evaluating the various proposals. Questions to be resolved in this task include:
· How should (or should) differences in projected operating results be considered in the evaluation. For example, if two Options have similar capital costs, but dissimilar operating results, how should these differences be reconciled be taken into account?
· If options provide solutions that are viable over different time frames, how should that be taken into account? For example, if one Option must be abandoned at 2030 and another Option is viable beyond 2030, how should that difference be taken in account?
· If there are substantial differences in uncertainty afforded by the various Options, how should they be evaluated?
The consultant is required to complete the following tasks:
Using the broad space plans and gross building square footages provided by the Committee for the major clinical and administrative areas in each Option, prepare a capital budget for each Option;
Examine the Business Model provided by SVH sufficiently to:
i. accept it as the primary analytical tool for evaluating the Options and modify the Business Model and develop satellite models as necessary to meet analytical needs not met by the existing Business Model; or consultant’s tools or
ii. elect to use a proprietary tool under the control of the consultant, provide client with a description of such tool and explanation of why you prefer to utilize it.
Work with the Committee to identify the time frames or milestones within which to evaluate the financial viability of Options;
With respect to material business risks, work with the Committee to identify specific risk scenarios based on likely trends in payment schedules, market fluctuations over time and other potentially material exogenous variables and perform risk analyses with respect for each Option.
For any Option that is projected to generate cash flow in excess of that required to assure sustainability of the District and its hospital, identify and evaluate potential capital assets that might be owned by the private sector and leased to the District.
Use the Business Model and the agreed criteria, for each Option produce;
i. A capital budget;
ii. A first year, ramp-up and milestone(s) pro forma;
iii. A risk-adjusted pro forma;
iv. An analysis of the likely costs to the tax payer or property owner; and
v. Comparative analyses of the Options with supporting commentary;
Present findings in a written report and Power Point presentation suitable for presentation at public meetings; and
Participate in meetings of the Committee, the Steering Committee, SVHCC and the District Board as required to present and discuss the study.
Form Of Proposal Required
In addition to the necessary statement of the consultant’s qualifications and ability to do the work described in this RFP, the consultant’s proposal shall identify the following;
a. a lump-sum fee for the work included in items a. through g. in the Scope of Work (with respect to four Options such as those identified in Exhibit A);
b. payment timetable;
c. methodology and rates for item h. in the Scope of Work; and
d. a list of references.
Ownership Of Work Product
SVH and/or the District will own the work product, design and progress documentation and associated planning and design documents, whether complete or in progress. Consultant recognizes that it is not authorized to use this work product on other projects.
Qualifications Required Of The Consultant
The successful consultant will demonstrate current experience in the following areas of small hospital design and management in California:
accounting & finance;
risk analysis;
developing and evaluating small hospital business plans;
developing new capital budgets for hospital and health care systems; and
financial modeling for small hospitals.
The successful consultant will also demonstrate to the satisfaction of the Committee its ability to serve as an objective, independent advisor to the process without ties or other allegiances to SVH or any group or individual in the Sonoma Valley or its region.
Timing Objectives
Following are the anticipated timing objectives are:
July 18 - Issue RFP
Aug 7 - Proposals due
August 18 - Successful candidate notified
August 24 - Successful candidate to participate in Committee meeting in Sonoma
August 28 - Finalized list of Options to consultant
August 19 – October 27 - Work period
October 27 – Report due
August 24 - January 15 - Consultant to participate in meetings with SVH staff, Committee, SVHCC and BOD as requested
Date, Time And Place For Submission Of Proposals
Proposals in response to this RFP shall be delivered, via e-mail or courier, on or before 5 PM on August 7, 2006. Proposals should be delivered to:
Gary Nelson Bill Boerum
PO BOX 1378 320 Davila Court
Glen Ellen, CA 95442-1378 Sonoma, CA 95476-7652
e-mail:
theothergarynelson@sbcglobal.net e-mail:
bill@vom.comHome: (707) 938-1776 Home: (707) 935-9304
Office: (707) 935-6576 Cell: (707) 996-7005
Cell: (707) 318-3974
Peter Haywood
18000 Gehricke Road
Sonoma, CA 95476
e-mail:
haywood@vom.comHome: (707) 938-5386
Office: (707) 996-4298
Notification Of Award
It is anticipated that the successful bidder will be notified on or before close of business on August 4, 2006. Documentation necessary to the study will be available to the successful consultant immediately upon execution of the engagement letter.
Exhibit A
Options For Inclusion In The Study.
o Option A. Smallest Operationally-Sensible Hospital - Basic ER, under 20 acute nursing beds, 4 ICU beds, surgery. Future addition likely for services to aging population. Appropriately-sized medical office building privately financed.
o Option B. Adequate For Current Volumes - Basic ER. 4 to 6 operating rooms, 3-4 LDRs, 6 ICU beds, 25-25 SNF beds (SNF could be omitted). Appropriately-sized medical office building privately financed.
o Option C. Healthcare System - Basic ER, 6 – 8 Ors, ICU, 34 beds, night clinic for pediatrics, chronic disease-capable. Off-site Birthing Center. Network of community clinics. Private SNF. “Membership” system to facilitate long-term support of patients with chronic conditions and/or acute illnesses. Appropriately-sized group practice medical office building privately financed.
o Option D. Reuse of, and additions to, existing on-site buildings. Basic ER, 4 – 6 operating rooms, 3-4 LDRs, 6 ICU beds, 25-35 acute beds, 20-25 SNF beds. New hospital wing on West End of property to accommodate ORs, LDRs, SNF and inpatient services. New central plant. Route utilities from new central plant to new hospital building. New entrance and lobby for East & West wings and acute care. Adjacent, appropriately-sized, medical & group practice building. Off-site Birthing Center (if so, delete LDRs above). Network of strategically located community clinics (2).
