Mendocino Coast District Hospital Request for Proposal

Mendocino Coast District Hospital April 11, 2019

Mendocino Coast District Hospital Request for Proposal (RFP)

Mendocino Coast District Hospital (“MCDH”) is a 25 bed Critical Access Hospital located in Fort Bragg, California and is accredited by the  Joint  Commission.  Its services include a 24-hour emergency department, intensive care unit, obstetrics, inpatient acute care medical/surgical unit, swing bed unit, pharmacy, surgery, imaging, laboratory, home health, ambulance, hematology/oncology, respiratory, physical and occupational/speech therapies and a rural health clinic. Since 1971 MCDH has provided health care services to the residents of Mendocino County who reside along a 70-mile stretch of rural coastal communities. MCDH is a vital resource for the residents and visitors along the somewhat isolated coast of Mendocino County.

It serves a District of approximately 23,500 individuals. The District is divided into a primary service area and a secondary service area. The primary service area consists of seven zip codes, encompassing the communities of Westport, Fort Bragg, Caspar, Mendocino, Little River, Albion, Elk and Comptche. The secondary service area consists of three zip codes in the southern coastal communities of Gualala, Manchester and Point Arena.

MCDH is unionized and UFCW 8 is the recognized representative of all the employees paid on an hourly basis including regular full-time, regular part-time and per diem employees (excluding supervisor, management and confidential employees).

MCDH is a 501 (c)(3) non-profit entity and is classified as a Special District in the State of California. For almost 50 years, MCDH has been dedicated to a mission of making a positive difference in the health of our rural community.

MCDH’s vision is to:

  • Play a vital role in the overall health and well-being of the community and will be the key element in the healthcare system serving the needs of our community. MCDH will provide leadership to enhance the efficiency, coordination, quality and range of services provided within our rural healthcare system.
  • Continue to be the healthcare provider and employer of choice within our community by implementing technology updates and achieving superior clinical skills.
  • Have a positive impact on health by encouraging personal and community responsibility for health and wellness. Our efforts will play a decisive role in people choosing to stay in our community or to locate here.

After careful thought and deliberation, the Board of Directors of MCDH (the “Board”) has determined that the timing is appropriate to seek options regarding a potential lease or sale. The Board is committed to finding the right lease partner or buyer to ensure that exceptional local healthcare continues continue to be delivered on the Mendocino Coast and the surrounding area. The purpose of this Request for Proposal (“RFP”) is to provide a structure which allows the Board to differentiate between potential leasers or buyers and to give each responding organization an opportunity to articulate what makes them an attractive option for the community. In considering proposals, the Board is interested in identifying a partner having the following nine characteristics:

  • A commitment to the continued provision of quality healthcare services to the residents of the Mendocino Coast and the surrounding area
  • A strategic vision for the future of MCDH
  • A demonstrated culture of quality and accountability
  • A proven track record of operational success to ensure the ongoing vitality of MCDH, as a stable and professionally rewarding organization for its employees and medical staff.
  • Sufficient capital to allow MCDH to maintain high-quality care for its patients and improve its physical facilities
  • A system reputation that will add value to MCDH’s existing brand and reputation within our community and among physicians, consumers, and insurance plans
  • Capabilities, facilities, clinical integration, leadership, and strategies necessary to be well positioned for success in an era of healthcare reform
  • A commitment to transparency in dealing with all its constituencies
  • A demonstrated history of following through on its promises and commitment

Please be assured that all organizations submitting a response will be accorded fair and equal treatment in the review of their respective proposals. The District’s interim CEO will be available for questions or to provide additional information whenever necessary.
To be considered responsive to this RFP, your proposal should address the elements outlined below and in the following pages. Not all transaction elements may be relevant to all participants.

Please be assured that all organizations submitting a response will be accorded fair and equal treatment in the review of their respective proposals. The District’s interim CEO will be available for questions or to provide additional information whenever necessary.
To be considered responsive to this RFP, your proposal should address the elements outlined below and in the following pages. Not all transaction elements may be relevant to all participants.

Background Information on Your Organization

  • Business and Hospital Operational Experience
    • Describe your business and indicate the number of years of hospital operational experience you can bring to MCDH through your operations, governance, and management.
  • Organizational Structure and Current Scope of Services
    • Describe the organizational structure or structures under which your business or businesses are conducted (including joint ventures and partnerships) and the current scope of services you provide.
  • Please provide the following information regarding your organization:
    • Organizational chart
    • Description of your management, including key management personnel
    • Description of your relevant experience with the type of transaction proposed
    • Tax status
    • Description of the nature and extent of medical school affiliations, if any
    • Locations of facilities and businesses operated
    • Audited financial statements for the most recent three (3) fiscal years.
    • Description of the basis on which you believe that you have sufficient current and future financial resources to support the payments due under the terms of the proposed transaction and to operate MCOH on a basis which is consistent with the commitments set forth in this RFP.
    • Identification and contact information for your team members, including legal and financial advisors, if any.
    • Description of programs you have implemented that have changed healthcare in the communities in which you operate.
  • Strategic Planning
    • Describe your strategic focus, plan, direction, and goals,  as well as the challenges you face in achieving these objectives, and how you plan to address these challenges.
    • Describe how you see MCDH helping your system accomplish these goals and how you plan to integrate MCDH into your system.
  • Legal Actions/Inquiries
  • Describe any prior or current/pending state or federal legal actions/inquiries involving your  organization, your management or Board of Directors.
  • Ethical and Religious Directives
    • Describe any ethical or religious directives of your organization that would impact the future operations of MCDH.

Structure of the Proposed Transaction

  • Describe the specific amount, terms, timing, and form of capital commitments you are prepared to make in a relationship with MCDH.
  • Describe your commitment to assume all pre-transaction and post-transaction liabilities of MCDH and provide indemnification of MCDH against such liabilities, along with evidence of appropriate financial    resources to support such indemnification.
  • Legal Entity for Agreement with MCDH
    • Describe the legal entity that will enter into an  agreement  with  MCDH regarding the transaction that will  own,  operate,  or  hold  any  required licenses for the delivery of healthcare services at MCDH.
  • Board of Directors
    • Describe the proposed governance structure and the ongoing role of MCDH’s current Board.


As to each of the Commitments set forth below, you are asked to agree to the Commitment, describe how you are handling similar commitments within your existing organization, and how you intend to ensure meeting the Commitment if you are chosen as the successful party to negotiate with MCDH.

  • Operational Commitments
    • Describe your commitment to operate MCDH as a full service acute care hospital for the foreseeable future.
    • Describe the proposed management organization structure for MCDH following the closing of a transaction.
  • Rights of Reversion
    • Describe your commitment to provide MCDH, or a surviving organization, with rights of reversion of the operations and assets of MCDH in the event you
      fail to meet your commitments or if there is a bond default or sale, insolvency, or bankruptcy of your organization.
  • Maintaining Charitable Purposes and Meeting Community Healthcare needs
    • Describe your commitment to maintain the mission/vision of MCDH, and collaborate with the District to meet the current and future healthcare needs of the community.
  • MCDH Staffing
    • Retention of current MCDH staff, who are currently under the employment of the current lessee of the Hospital.
      • Describe your commitment to retain MCDH employees following the closing of a transaction.
      • Describe any anticipated employee benefit changes.
      • Demonstrate any staffing or other plans to achieve economies of scale.
  • Clinical Services and Physician Recruiting
    • Describe your commitment to take steps to ensure that, subject to  patient choice, all medical services for which there exists financial capability at MCDH will be performed locally rather  than  at  outlying,  tertiary  care  facilities, whether or not owned or controlled by your organization.
    • Describe your commitment to maintaining existing clinical services at MCDH and indicate the minimum timing that you are prepared to make for maintaining such services.
    • Describe any new services you anticipate implementing during the next five years.
    • Describe commitment to expend significant financial resources to recruit new physicians to the community and grow MCDH’s current complement of clinical services, and specify what level of capital commitment you are making to do so.
    • Describe which, if any, clinical services may not be maintained at MCDH.
  • Clinical Quality Improvement
    • Quality Measurement
      • Describe your commitment to develop and implement a proven  plan  for clinical quality measurement utilizing national and regional benchmarks and accountability.
    • Staff Development
      • Describe your commitment to develop and implement a proven plan for improvement of the medical staff, nursing staff and non-physician practitioners with corresponding education and training programs, including development and implementationof centers for excellence in specific clinical areas.
  • Capital Improvements
    • Describe your commitment to needed capital improvements, including funding of growth initiatives intended to maintain facilities, equipment, and other capital items at a state-of-the-art level for comparable  community hospitals.
  • Competition and Right of First Refusal
    • Describe your commitment (a) not to own or operate any other entity which competes with MCDH in its service area and (b) to afford MCDH or a surviving organization with the right of first refusal in the event you should seek to sell the assets or operations of MCDH following the closing.
  • Strategic Vision
    • Describe the strategic vision you have for your presence and role in Mendocino County. How does MCDH fit into and allow you to achieve that vision? Describe the strategies that are currently beyond the reach of MCDH  and  that  are possible with your involvement to deal  with  evolving  payment  systems, including a well-designed strategy for Accountable Care and population health management readiness.
  • Information Technology
    • Describe your commitment to provide MCDH with information technology that will support clinical excellence, integrate MCDH with other system facilities, meet all federal and state requirements for funding, and promote participation and success in evolving payment structures.

After receipt of Proposals, MCDH may, based at its sole discretion, select organizations with which to continue affiliation discussions. MCDH requests that your Proposal be as specific and detailed as possible. Site visits at MCDH can be arranged prior to the Proposal submission deadline.
Proposal Submission Deadline: May 10, 2019
Contact Person:
Wayne C. Allen Interim CEO 707-961-4630
Mendocino Coast District Hospital 700 River Drive
Fort Bragg, CA. 95437

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