How Sonoma Valley Hospital went from only days of cash left to ‘stable and healthy’

After a decade of leadership at Sonoma Valley Hospital that sometimes required steely resolve as she worked to stabilize the facility, Kelly Mather leaves knowing her work there is done.

“I think it was time for me to move on,” Mather said last week. “I felt like I had accomplished what I wanted to accomplish.”

Now settling in to her role as CEO of BayHealth Development, a joint venture between UCSF Health and John Muir Health, Mather leaves the 75-bed Sonoma Valley Hospital on solid ground.

“She turned it around from what was, in the minds of the community, a failing organization and one that was financially bereft, to one that is certainly stable and healthy and high quality,” said Joshua Rymer, chair of the Sonoma Valley District Board.

Small hospitals are generally not very secure, Rymer noted, but given that, SVH is now in “a relatively good position.”

Under Mather’s leadership, the hospital has gone from having five to 10 days of cash on hand, to an average of 60 to 70 days of cash on hand, Rymer said.

Longstanding leadership

Mather’s move to BayHealth marks her fourth time serving as CEO at a hospital. Before Sonoma Valley Hospital, she served for nearly eight years at Sutter Lakeside Hospital. Her first CEO role was at San Leandro Hospital, where she stayed for five years.

“I’ve been doing this for a long time, since I was 28 years old,” said Mather, now 53.

Mather resigned from Sonoma Valley Hospital in July and joined BayHealth on Sept. 1, but split her time between both organizations until Dec. 31. BayHealth also developed and operates the Canopy Health network, which includes Sonoma Valley Hospital.

The upward climb

When Mather arrived at Sonoma Valley Hospital in 2010, the board was in the midst of a capital campaign to help modernize the facility that was built in 1957.

Construction began the same year on a $46 million wing that was built to survive an earthquake. The wing, which opened in 2014, houses the hospital's emergency department, surgery center and central utility plant.

That achievement was a highlight of Mather’s career, but would be outshone in the years to come.

If the hospital was going to become financially viable, Mather knew she would have to make some big moves, including one that would be met with great resistance.

In 2018, Sonoma Valley Hospital entered into an affiliation with UCSF Health, closed its obstetrics unit, transferred ownership of its home health care service to UCSF-affiliate Hospice by the Bay, and turned over operational management of its on-site skilled nursing facility to the Ensign Group.

"We not only survived in fiscal year 2019, we made the hard decisions and very difficult changes that led to our hospital having the best year in decades,” Mather told the Business Journal in 2019. “We exceeded budget by 50%. It has taken nine years, but I believe SVH has truly turned a corner."

Concerns about the OB unit’s future began in 2009, before Mather’s tenure. In 2014, under her leadership, there was a conversation about closing the OB service line, but it was decided to leave it untouched.

The hospital was delivering about 100 babies a year, well below the 50 babies per month, or 600 a year, that would be needed to sustain the OB service line, Mather said, noting about 50% of hospitals nationwide no longer have OB units.

“By the time we got to 2018, Kelly knew the writing had been on the wall for a long time,” Rymer said. “(The OB unit) had the potential to take the hospital down, (along with) the skilled nursing facility.”

The decision to close the OB unit caused an uproar from the community during public meetings — and beyond, Rymer said.

“There were letters to the editor, there were blog posts, and (neighborhood hub) Nextdoor was alight with comments,” he said. “There were lots of horrible comments about (Mather) and about us. It was very, very challenging.”

Mather handled it through reasoning and explaining the facts.

“I think that I always listen to concerns and people do want to be heard,” she said. “But I also try to do a lot of education. … If something is bleeding money, you’ve got to do something about it.”

Strong character

When asked how colleagues and friends would describe her, Mather said she’s been told she is tenacious and focused.

Those character traits allowed Mather to make the most significant and lasting decision for the hospital’s future — the affiliation with UCSF, according to friend and former colleague Dr. Sabrina Kidd, SVH’s chief medical officer.

“The initial agreement was reached quickly and did not have a lot of terms, but this agreement opened the door to the future of SVH and has already been strengthened,” Kidd said in an email statement. “It will ensure SVH continues to offer high-quality care to Sonoma for years to come.”

Mather also pointed to the UCSF Health affiliation as one of her two top accomplishments at Sonoma Valley Hospital, the other one being having raised over $35 million in philanthropy — a big achievement for a small hospital.

UCSF also will be using the hospital's new outpatient diagnostic center when it opens in the spring.

The partnership was not only key to Sonoma Valley Hospital, but also to Mather’s future.

“Once we affiliated with UCSF Health, I felt like it was time for me to make a change,” Mather said, adding she reached out to UCSF to ask if there were any opportunities available. “I wanted to go bigger and work with a larger organization.”

Her new role also brings new challenges, including opening a cancer center and a standalone outpatient surgery center.

And she’s happy about where Sonoma Valley Hospital is headed.

“When I started, we were suffering from furloughs and lack of cash on hand. I felt like it was such a diamond in the rough, a small hospital with great potential, but needed more leadership,” Mather said. “I think I'm leaving the place in a very good financial situation for our size hospital. I feel very positive about leaving at this time.”

Cheryl Sarfaty covers tourism, hospitality, health care and education. She previously worked for a Gannett daily newspaper in New Jersey and NJBIZ, the state’s business journal. Cheryl has freelanced for business journals in Sacramento, Silicon Valley, San Francisco and Lehigh Valley, Pennsylvania. She has a bachelor’s degree in journalism from California State University, Northridge. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.