Rehabilitation Institute and Cottage Health System Announce Letter of Intent

Santa Barbara – Rehabilitation Institute at Santa Barbara (RISB) has approached Cottage Health System (CHS) to discuss possible options for its future with the goal of sustaining acute rehabilitation services on the Central Coast. Today, the two not-for-profit organizations signed a Letter of Intent to determine whether it is of mutual benefit to bring the programs and services of RISB under the license of Santa Barbara Cottage Hospital (SBCH) and thus into the Cottage Health System.  

Due to the financial realities of reductions in Medicare and third party payments, plus increased and costly rules governing access to acute medical inpatient rehabilitation care, RISB has experienced significant operating losses over the last few years that can no longer be supported by the current and historical level of private donations and foundation grants.  Cottage believes it will be able to provide RISB with economies of scale and reduced overhead expense by bringing rehabilitation services and programs into the Cottage governance and management structure.

It is the intent of RISB and Cottage to continue the excellent care for which RISB has been respected for over 50 years.  Both nonprofit organizations recognize the critical contribution made by RISB to the continuum of health care available on the Central Coast.

“It is the priority of RISB’s board to preserve the excellent care and outcomes in rehabilitation,” emphasizes Michael Focht, chair of the RISB board of directors.  He added, “Patient outcomes have consistently exceeded national standards.”

RISB patients have diagnoses of stroke, traumatic brain injury, spinal cord injury, neuromuscular diseases, orthopedic problems, amputations, and other conditions compromising functional independence.  There are generally about 20 patients in the hospital each night, two thirds of them residents of the South Coast.  In 2006, 94% of RISB patients returned to community settings rather than to other levels of institutional care.

“In order to ensure the viability of the Institute’s mission,” explains Melinda Staveley, MS, RISB President/CEO, “we must explore with due diligence this opportunity to reduce cost by decreasing duplicative overhead and gain the benefits inherent in being part of Cottage Health System, a larger not-for-profit provider with a community mission and belief in the value of acute medical rehabilitation services.”

“We have always valued the tremendous work performed by the medical rehabilitation team of physicians, therapists, specialized nurses, psychologists, and neuropsychologists at the Rehabilitation Institute,” says Cottage Health System President and CEO Ron Werft.  “Like RISB, we want this important service to continue in our community.”

CHS Board Chair J. Robert Andrews agrees.  “This is the right thing to do for our community.  There’s no question that smaller hospitals face increasing challenges in today’s healthcare environment. We’ve witnessed that in our own communities during the last decade. In order to survive financially, the Santa Ynez and Goleta hospitals also saw the need to approach Cottage and consider pooling resources. Today, both facilities are operating with a positive bottom line.”

Under the Letter of Intent, during the next 90 days both organizations will evaluate such details as staffing, financial considerations, and the final structure of the agreement.  It is anticipated that a new RISB Foundation will be established into which the gifts that have been donated to RISB over the years and restricted to various rehabilitation services and endowment will be placed.  The RISB Foundation’s sole purpose will be to support and sustain the delivery of acute medical rehabilitation inpatient and outpatient services at Santa Barbara Cottage Hospital.

RISB is expected to stay in its current facility located at 2415 De La Vina Street, purchased from Cottage almost eight years ago.  After extensive remodel, including seismic retrofit to bring the building into compliance with the year 2030 State of California codes, RISB moved into it in 2001 from the old Santa Barbara County General Hospital.  The land has always remained under ownership of CHS, which leases it to RISB for a nominal $100 per year.

ABOUT REHABILITATION INSTITUTE AT SANTA BARBARA

Rehabilitation Institute at Santa Barbara is an independent, 38-bed, not-for-profit acute care medical rehabilitation hospital.  In fiscal year 2006, RISB’s inpatient programs served 653 patients.  The Tuohy Foundation Aquatic Center served 180 community members in therapeutic aquatic classes and/or physician-ordered aquatic therapy in its 92 degree pool.  Keck Center for Outpatient Services provided 7400 treatments.  RISB’s mission is best summarized in this phrase “Renewing hope and nurturing independence” – what RISB has been doing for over 50 years.  Visit www.risb.org.

ABOUT COTTAGE HEALTH SYSTEM

Cottage Health System, the parent organization of Santa Barbara Cottage Hospital and its associated Cottage Children’s Hospital, Santa Ynez Valley Cottage Hospital, and Goleta Valley Cottage Hospital, is guided by a volunteer board of directors from the greater Santa Barbara community.   Last year, the hospitals provided inpatient care for 21,000 people, treated 62,000 patients through their 24-hour emergency departments and helped deliver 2,700 newborns.  With a staff of more than 2,500, Cottage is the largest private employer in Santa Barbara County. Visit www.cottagehealthsystem.org.