An Action Plan for Monterey Peninsula Regional Health Care Challenges

Your Monterey Peninsula Chamber of Commerce hosted a Quarterly Business Insights Breakfast on July 30, 2024 featuring Steven Packer, MD, President and CEO of Montage Health. Dr. Packer provided the Montage perspective on what he identified as three challenges facing health care in the region: (1) pricing and cost of services, (2) retaining a quality workforce, and (3) access and capacity of the system for patients.

Dr. Packer acknowledged news media reports that placed the three Monterey County hospital systems as among the most expensive health care providers in the state. He explained one major reason: the proportion of Montage patients using government programs with fixed costs (Medicare, Medi-Cal, and TRICARE) is 50% higher than in regions such as the San Francisco Bay Area. That means a small percentage of participants must pay the balance of health system expenses after government reimbursement.

In addition, Montage has to provide extra resources to retain medical personnel (doctors, nurses, and other specialized medical professionals) in an expensive area a bit separated from major metropolitan areas. The annual employee turnover rate for Montage is 10%, less than the 15% rate for California and 20% rate nationally. In fact, the Montage turnover rate has been dropping since its COVID peak of 10.7% in 2021, and it is only 2.2% so far in 2024. Vacancies have been stable at 4% and the system tries to avoid using traveling nurses to fill vacancies. A Center for Physician Excellence has been established to help doctors to stay in the Montage system.

As the median population of the region grows older, Montage is engaged in long-term planning for capital improvements at the hospital, including a new wing and additional parking. Hospital admissions have steadily increased since 2020, and this is not because of COVID. Montage also has been adding and expanding facilities and using technology for more immediate response to increased service demand. Montage (a non-profit system) tries to maintain a 3.5% excess revenue margin on its operations to fund future infrastructure needs and ensure long-term sustainability in times of economic contraction.

In response to Dr. Packer’s remarks, you may ask what the Chamber of Commerce can do to help Montage (and the other Monterey County health systems) face these regional challenges. Here are some ideas:

(1) Local businesses can participate in corporate wellness programs such as those offered by Montage to help keep their workforce healthy. [Link]

(2) Local businesses can strategize to maximize the number of their employees covered by commercial insurance or other health care coverage.

(3) The Chamber will continue to support public policies that encourage creation and growth of businesses with quality jobs that include commercial health insurance. Meanwhile, local voters and politicians should encourage adopting policies that invite ambitious young people and middle class families to stay in the region.

(4) The Chamber will continue to support the local K-12 school districts and community college districts that provide education to the children of households supported by local jobs. And it will continue to strive toward the establishment of a quality child care system that is affordable and accessible to ordinary households.

(5) The Chamber will continue to support fair competition among health insurance providers and not be lured into embracing simplistic solutions based on fundamental system change or theoretical ideologies.

Montage does not operate in a vacuum: it is very much intertwined with the condition of the local economy. That’s why Dr. Packer took the opportunity to speak at the Chamber's Quarterly Business Insights Breakfast.