Silicon Valley Business Journal spotlights new VMC exec Linda Smith

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Health care exec returns to her roots as new head of Valley Medical Center

Premium content from Silicon Valley / San Jose Business Journal – by Lisa Sibley Date: Friday, April 8, 2011, 3:00am PDT

Linda Smith has come full circle in her career.

At age 17, the San Jose native began her health profession as a respiratory therapist at Santa Clara Valley Medical Center, while attending Foothill College. She remembers being frustrated that patients could smoke inside the hospital and wanted to make a greater impact on the medical community through hospital management. She transferred to University of California, Berkeley, while she continued to work weekend evening shifts at VMC to pay her tuition.

Now, after more than 20 years in the health care sector, Smith has returned to her roots. She began her post in January as CEO at VMC, the county’s 574-bed acute care hospital and the only level one trauma center in San Jose. With a fresh set of eyes and a focus on quality, patient experience, financial performance and electronic medical records, Smith oversees more than 5,600 employees. Smith has been tasked with $70 million in cuts from VMC’s $1 billion operating budget for fiscal year 2011-12.

“It is a tough job. I don’t have the financial resources I had in Wisconsin,” Smith said. “I never thought I would come back here, but this is the facility that has powered my career for the past 26 years.”

Smith comes back to the facility at a significant juncture in time. In November 2008, Santa Clara County voters approved an $840 million bond, Measure A, which provides for $790 million in seismic safety improvements as older facilities at VMC are upgraded or replaced by modern patient care and hospital support facilities. Measure A included $50 million to construct a health facility in downtown San Jose. The project is expected to open in 2012-13 on time. Another Measure A project is a building currently under construction on the center’s Bascom Avenue campus, expected to have 168 acute/transitional and intensive care unit beds.

Below is an interview with Smith edited for length and clarity.

Q: What experience do you bring to the job?
A: I am used to thinking about regional clinics and their connectedness to an acute care hospital. In Wisconsin, patients flowed back and forth between the hospital and 24 regional clinics. I am now taking that experience and learning how that applies to Santa Clara County and its network of clinics, which is smaller.

Q: How much has the need for health insurance coverage grown?
A: The Santa Clara County Public Health Department’s 2010 Risk Factor Survey found about two in 10 adults do not have health insurance in the county, and over the past decade, the percentage of adults without health insurance increased from 8 percent to 18 percent.

Q: Knowing this huge need, what are some of the challenges you face?
A: The data sharing system in place needs to be improved, especially in the area of electronic medical records. Before I arrived, there was a request for proposal to implement a $20 million electronic medical record program. Initially the hardware and training costs would be steep, but those costs would go down after the first year, and costs would be mostly for licensing the software. Putting this in place would improve the patient care, so we are re-evaluating this.

The need for this system is hitting just as county finances are stressed because property tax revenue is so low, and the county relies on these dollars. The federal government does offer some incentives to mitigate some of that, but you as a health care provider have to make the upfront investment.

Q: How are you going to close the budget deficit for VMC?
A: The vast majority is going to come from new revenue opportunities. The state has a program called the Delivery System Reform Incentive Pool. It ties federal funding to milestones in care delivery improvements, and will provide some significant revenue opportunities to help us make up that gap.

The remainder will come from a combination of cuts to head count and looking at dislocated services that will enable us to consolidate and still achieve needed clinical turnarounds. I have gone through financial problems in other health care leadership positions. It is not unique to VMC, rather it is the evolution of health care. Los Angeles County had severe financial problems in the mid-1990s, and we unfortunately ended up laying off 5,000 people. This is a much smaller system. Our labor organizations have also been coming up with cost-saving ideas, and we’re pursuing some of their suggestions.

Another thing we did in Los Angeles was look at where we could make deals on legal costs and supplies, and we didn’t give raises one year. That is normal business in the health care industry and in private industry. We look for ways to continually improve our operations and save money. I feel responsibility toward the taxpayers of Santa Clara County, and I keep them in mind in decisions I make.