“You should speak to David Shaw,” recommended New Mexico Hospital Association Lobbyist Dan Weaks at an online informational meeting held on Nov. 19 about Sierra Vista Hospital’s proposed restructuring.
Shaw is CEO of the Nor-Lea Special Hospital District in Lovington, New Mexico, which he described, in a recent interview with the Sun, as “one of the most profitable, publicly owned critical-access hospitals in the country.”
The Sierra County Joint Powers Commission—the “owners’ board”—is seeking to change the hospital’s ownership and governance structure to a special hospital district, the same as Nor-Lea’s. ( Links to the Sun’s two previous “explainers” on the proposed restructuring can be found at the end of this story.)
If enabling legislation sponsored by New Mexico Representative Rebecca Dow and New Mexico Senator-elect Crystal Diamond passes in the upcoming Roundhouse session, the special hospital district will become the owners of Sierra Vista Hospital, which will be overseen by a five-person board of trustees elected by and representing Sierra Countians. The trustees may be at large or single-member candidates; which form of representation will be decided by the Sierra County Commission.
Shaw said Nor-Lea’s trustees are chosen as single-member candidates. Voters within each of five districts of equal population choose their trustee for a four-year term. Nor-Lea serves a population of about 12,000—similar in size to that served by Sierra Vista.
“I spend a lot of time and effort educating the board,” Shaw said. “I think if I do a really good job educating them, they do a really good job of serving the people.”
Shaw and the trustees meet once a month. Very few members of the public attend—“I think,” he explained—“because they are happy with their medical care. Sometimes I have to tip the press when something big is happening.”
Shaw also makes a point of soliciting feedback from a broad spectrum of community members. “I think most of the people know me. I’ve built a lot of relationships in the community.”
Another key to the hospital’s success and stability is the length of Shaw’s tenure. “I have been CEO for 21 years,” Shaw said. “I’ve raised my family here. I am invested in the community.”
Special hospital districts have taxing authority, allowing them to collect up to 4.25 mills of property tax with voter approval. The Nor-Lea Special Hospital District collects 4.0 mills, approved by Lovington voters in two increments.
“We have an election every two years,” Shaw said of the Nor-Lea hospital district’s two levies, one of which is for 1.5 mills, the other for 2.5 mills. Each sunsets every four years.
“Passage is never a problem,” Shaw said. “It is approved by about 90 percent.”
Tax revenues and the expenditures they support are explained every year on the Nor-Lea Special Hospital District website. These local tax dollars help local people, as they largely go to indigent and charity claims for “district members only.”
The website also publishes a price list comparing medical-service charges among the five surrounding hospitals. Nor-Lea is the most competitive.
The year-end audit report presented annually on the website is accompanied by a long essay by Shaw. He explains what new projects were undertaken and why. The “why” is based on findings from regular community health surveys, a practice that goes back many years, demonstrating long-range planning and goal setting that is monitored, with results communicated to the public.
For example, a survey showed Nor-Lea needed 25 additional primary care physicians to meet demand. Over the last 10 years Shaw has made it a budgetary goal to close the gap. His 2019 essay reported 20 of the 25 needed primary care docs have been hired.
Another community survey showed 20 years ago the district had one of the highest death rates from cancer in the state. In the intervening years, Shaw’s 2019 essay states, the district’s cancer death rate has been reduced from 36 percent to 6 percent. It is now among the lowest in the state.
Asked what advice he would give to the Sierra Vista Hospital JPC about forming a special hospital district, electing trustees and then holding a vote on a new property tax, Shaw said: “I am on the side of transparency. You have to make the case to the public. Patient care should be the focus.”