Quick Take:

Watsonville Community Hospital’s new CEO, Stephen Gray, says he aims to transform the facility into one of the nation’s top health care institutions. Gray, who takes over Nov. 1, said Thursday that he plans to address the hospital’s financial struggles and prioritize the happiness of staff and patients. He believes the hospital has the potential to make a significant impact on the health outcomes of the surrounding communities, which rank among the least-healthy populations in the country.

Watsonville Community Hospital’s new CEO, Stephen Gray, says he wants to make the hospital one of the best in the country.

A Q&A with new Watsonville Community Hospital CEO Stephen Gray

About a month before he takes the reins Nov. 1, Gray sat down with Santa Cruz County media to share why he took the job, what his goals are and what he sees as the biggest challenges.

As the current chief administrator for the Sutter Bay Medical Foundation – Santa Cruz Division, Gray has over two decades of health care management — 17 of those with Sutter and several with Massachusetts General Hospital. He takes over as the hospital completes its first year of nonprofit ownership under the Pajaro Valley Health Care District, and as the hospital continues to struggle financially.

Gray said the hospital faces a difficult situation: 80% to 85% of its patients are underinsured and the reimbursements the hospital gets for services for those patients aren’t enough to cover the costs.

“It is very challenging to live in a health care world where a majority of your payers don’t pay you enough to cover your costs,” he said. “So you’ve got to be creative with how you provide services and what services you’re providing.”

He said his priorities are ensuring that the hospital is stable financially, and that staff and patients are happy.

“That involves providing a great service for the patients so they have a great experience and so they want to come here,” he said, adding that it also means the hospital needs to invest in the right equipment and in making sure staff are happy working there.

When it comes to specifics around how to do that, Gray said he’ll need time on the job to determine the approach. However, he will prioritize meeting with the chief financial officer, learning what the community needs are and getting to know the names of the 900 or so employees of the hospital.

On Wednesday, the hospital’s board of directors approved his four-year contract for annual pay of $640,000 — a contract that only board member Dr. Joe Gallagher opposed. Gallagher instead proposed reducing the pay and mentioned that former CEO Steven Salyer voluntarily took a 10% pay cut. Lookout asked Gray if he considered volunteering for a 10% pay cut as well.

“I really appreciate the generous offer that the board gave me,” he said. “I don’t know that I can speak to any changes to that at this point. But that’s what’s been offered to me, and I appreciated that.”

With his transition to his new role, Gray will be continuing his life as a Capitola resident. He has lived here with his wife, son, daughter and two dogs for 11 years.

This interview has been edited for clarity and brevity.

Lookout: Why did you take this job?

Stephen Gray: I think for this position, it’s about impact and opportunity. It’s about the opportunity to have an impact on this part of our community, which I consider my community. We’ve lived here for 11 years. My goal is to help this community as much as possible. When I look at publicly available data, one of the areas is the Healthy Places Index. You can go online, find the Healthy Places Index, look at a map. You can see which ZIP codes are in the healthiest quartile and the least-healthy quartile in California. The Pajaro Valley Health Care District encompasses the populations in Santa Cruz and Monterey counties that are in the least-healthy population, the least-healthy ZIP codes, in terms of access to health care, in terms of health care outcomes. The newly formed district and the rejuvenated hospital have such a great opportunity to help impact that. That’s what’s exciting and that’s what brought me here.

Lookout: What are your top goals for Watsonville Community Hospital?

Gray: I want to make this hospital one of the best hospitals in the country. The first thing to do is to become financially sustainable. We’ve struggled with that. The team here has done an amazing job since taking it over from the for-profit corporations to [make] the financial situation better, but it’s not fully there yet. We’re still losing money on a month-by-month basis. So that needs to be fixed first.

Then it’s about getting recognized as one of the best hospitals in the country. I think there are already a lot of amazing things that this hospital does. There are amazing clinicians, nurses and staff already here, and people need to know about that and [it needs to] get recognized for that. Then we need to do additional work on top of that to make it recognized nationally as one of the best hospitals in the country. There are national recognition programs that use publicly available data, there are others that you apply to so that you can get benchmark data so that you can compare yourself against the best of the best. Those are the kinds of things that we need to do. We need to strive not just to survive and tread water, but to swim and become some of the best of the best, because this community deserves it.

Lookout: Your Twitter handle says, “Family. Healthcare. Baseball.” Tell us about yourself.

Gray: I was born and raised in Massachusetts, about a half-hour north of Boston. I tell people the family religion was Boston sports, which includes a lifelong Red Sox baseball fandom. I’ve played baseball since I was a really little kid and continue to play actually now, into my adulthood — I play in an adult baseball league over the hill and coach my son in a Watsonville-based baseball team. He’s continued to play since T-ball.

In Boston, when I was growing up, I thought I wanted to be a doctor but realized that the sight of blood was not my favorite thing. But I really enjoyed my psychology classes, and getting to listen to people and understand people. I thought I wanted to be a clinical psychologist, tried that for a little bit — did some research and treatment in Mass General Hospital in Boston. Then somebody I was working with introduced me to the world of health care leadership, and the opportunity and the possibility of helping a lot of people at once indirectly was what really got to me.

I want[ed] to help people but I didn’t know how to do that. And then when I learned about that possibility, and then I got to do an internship at UCLA with their chief nurse executive — she was an amazing mentor. I got to see what that was like, what life was like helping the people who help patients and helping them throughout the community. That’s really what I’ve done since then and strove for, and want to continue here and have the opportunity to do some pretty cool things here.

FOR THE RECORD: This story has been updated to clarify Stephen Gray’s quote about Healthy Places Index data.

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