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Following in the footsteps of other small hospitals, the Santa Barbara Rehabilitation Institute has approached Cottage Health System as a possible partner to offset rising operational costs.
Officials don’t foresee changes to medical care in the 38-bed facility, where patients are treated for physical and cognitive trauma from strokes, car accidents and a myriad of other debilitating illnesses. The partnership could, however, mean cuts at the administrative level.
 Melinda Staveley
As payments from insurers plunge due to rising health care costs, smaller hospitals are feeling the financial pinch. Goleta Valley Hospital, St. Francis Hospital and Santa Ynez Hospital also merged with Cottage for similar reasons to save on operational costs.
Officials at the Rehabilitation Institute and Cottage are in the early talking stages of this partnership. A “letter of intent” signed earlier this month opened an approximate 90-day period of negotiations.
Cottage isn’t trying to become bigger, but recognizes the financial strain of smaller hospitals, said Ron Werft, executive director of Cottage Health System.
“Our size is effective for us now, but we are open to collaborating with others,” he said.
In terms of income and expenses, the Rehabilitation Institute has only finished in the black three times in 50 years, officials said. The difference has been covered by donations -- about $2 million a year that comes from the community.
“The community has been very generous, but we can’t continue to rely on that generosity,” Staveley said.
The institute serves about 400 people a year who receive care on an inpatient basis, and another 7,000 or so who use the facilities for exercise, counseling and rehabilitative work.
Injuries and ages of patients run the gamut. Many have suffered strokes and need help with cognitive memory; others are severe trauma due to accidents and diseases.
 Henrik Rosvall
He was paralyzed from the waste down, and began receiving physical therapy at the Rehabilitation Institute in February.
Doctors said he might never walk again, but after hours of physical exercise, Rosvall is walking, swimming and jogging.
“The care I’ve received here has been great,” he said. “I practically live here. … I just don’t sleep here anymore.”
Officials will know more about the partnership toward the end of this summer. Cuts may be in store, but medical care won’t be affected, they say.
“The good thing about these discussions is that there is a belief on both sides about the service,” Staveley said. “This is not a discussion about clinical quality. It is pure and simple an economic issue.”
Contact Melissa Evans at
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