Doctor’s Medical Center faces grim prognosis
on July 22, 2011
What would happen if West Contra Costa County’s largest hospital was forced to shut its doors or seriously downgrade its emergency room operations? It would be very bad, according to a study released last week by the county health department’s Emergency Medical Services agency. Yet hospital officials say a permanent closure of Doctor’s Medical Center San Pablo, whose largely low-income and elderly patient population makes it difficult to run profitably, is looming unless they are able to secure state or other funding soon.
Doctor’s Medical Center represents nearly 80 percent of the inpatient capacity in West Contra Costa, and provides nearly 60 percent of West County’s emergency care. As the area’s only public hospital, it was set up in the 1940s to ensure access to care for low-income and uninsured people, but serving that population puts the hospital in a difficult financial position. The hospital has a long history of fiscal crisis, which in 2005 resulted in a three-month closure of their ER and a subsequent bankruptcy in 2006. The hospital has relied on state and other funding to keep its doors open in recent years, but that funding has dried up. Now Doctor’s is staring down the barrel of a permanent shutdown again.
Without a commitment to renewed state funding and other revenue sources, the West Contra Costa Healthcare District, an elected board charged with overseeing the hospital’s operation, would be forced to begin the process of closing down Doctor’s Medical Center within a month. The hospital’s interim CEO Dawn Gideon, a consultant who specializes in trying to salvage—or shut down—hospitals on the brink of financial collapse, says the hospital is facing a $12-$14 million budget shortfall and runs with only a few day’s operating expenses on hand.
But without the hospital, “There would be a huge gap in service for emergency medical services for the population of West County,” said Pat Frost, the county’s director of emergency services, the agency that oversees ambulance and paramedic services, as well as emergency preparedness and disaster planning for the county. “This is really mission-critical.”
The study released last week, done by the Oakland-based Abaris Group, found that if Doctor’s Medical Center San Pablo closed its doors entirely, the results would be devastating for both the area’s emergency medical outcomes and the cost of providing emergency services to residents. Kaiser Permanente’s Richmond hospital, the only other hospital in this part of the county, has a far smaller emergency department, ten beds compared to Doctor’s 25, and would not be able to compensate for the influx of patients.
Overall, the number of critical care beds in Contra Costa County is already too low to meet state regulations, according to the Abaris Group study. The Office of Statewide Health Planning and Development considers a 65 percent ICU bed occupancy rate the maximum, and Contra Costa County’s occupancy rate is currently at 66.5 percent. Without Doctor’s Medical Center’s ICU beds, that rate could jump to nearly 85 percent.
According to the study, if the majority of ambulance traffic from West County is rerouted to Kaiser Richmond, off-load times—the time it takes to hand off patients to emergency rooms—would double. Rerouting ambulances to take patients to John Muir Medical Center in Walnut Creek or the county hospital in Martinez and the increased ambulance off-load times would add nearly $2.5 billion for increased ambulance hours, and would lengthen the amount of time it takes to get critically ill patients life-saving care.
The majority of emergency department patients don’t come from ambulances, though, and walk-in patients would be severely affected, as well. Average wait times for walk-in patients at Kaiser’s ER would soar as high as 12 hours, according to the study. Emergency departments are required to treat all patients who come through the door. But the perception that Kaiser’s hospital is only available to Kaiser health insurance subscribers and increased wait times would likely deter uninsured, Medi-Cal or underinsured patients from going to Kaiser, the study’s authors conclude. Given the distance to other hospitals in the county, many of the county’s older and uninsured would likely defer care until their symptoms become severe.
Additionally, Doctor’s Medical Center is one of two hospitals in Contra Costa County set up to treat high-risk heart attacks, called “ST segment elevation myocardial infarctions” or STEMIs. “Those are the patients that come in just grasping their chest, vomiting, sweating, ready to die, just really acutely within hours if we don’t intervene,” said Seth Thomas, who heads up the emergency department at Doctor’s Medical Center. Taking a STEMI patient to Alta Bates Summit in Oakland, which also handles these high-risk heart attacks, would add 15 minutes before the heart attack victim gets care, and that is only if they are not taken to a closer, non-STEMI emergency room first to be diagnosed before being taken to Oakland, the study concluded.
That added time could have massive consequences. The longer it takes to get a heart attack or stroke victim to life-saving care, the more heart or brain tissue cells die as blood flow is cut off. “Time is tissue,” Thomas said.
Nobody runs in the emergency room
An hour spent at Doctor’s Emergency Department on Thursday proved starkly distant from the pulse-pounding pace of prime time emergency room television dramas. Patients were not packed in wall-to-wall, orderlies did not scurry from room to room, and no stretchers flew down the hall surrounded by running doctors, nurses and paramedics barking orders and tersely reciting vitals. In fact, nobody runs in the ER; they walk quickly, which is safer and inspires more patient confidence.
The central administrative bullpen, where doctors, medical students, nurses and physicians assistants gathered, talking over charts, hummed with a focused intensity. The chatter was punctuated regularly by a single ring of the phone and a “Doctor’s Medical Center, Emergency Room.” A large flat-screen monitor blinked with the color-coded, real-time status of each patient in the ER at the time.
An older woman intermittently slept, her daughter periodically brushing back her hair. One curtain-separated bed over, a young man slowly ate a meal from a tray and nursed a drink in a paper cup. At times, the emergency room was actually quiet, with just a low murmur of whispered conversation and the rustle of an orderly remaking a newly-empty bed.
But the near-serenity in the emergency room on a Thursday afternoon doesn’t show the sheer volume of business the department sees. Mondays, Tuesdays and Wednesdays are the busiest. At times, the ER sees 150 patients a day. Roughly 83 percent of the hospital’s admissions came from the emergency department in 2009. Last year, over 40,000 patients made their way through the emergency department at Doctor’s Medical Center.
There are two ways into the ER: One is by ambulance, and the other is through the front door. “Patients who either walk in or are brought in by their family members,” Thomas said. Most of the patients are walk-in patients.
Some of them are quickly triaged for easily-treatable conditions like cuts, breaks and sprains. For those, a recent ER reorganization created an “express care” area staffed by a dedicated nurse to treat and discharge low-acuity patients. On the day I visited, Patti Rhone, who oversees the area, was on duty. Over the course of an hour, she finished treating four patients and wheeled them out the front door. Thomas said the express care area is largely responsible for cutting the average time patients wait to be seen by physician or physician’s assistant down to just 30 minutes.
Illness accounts for many of the remaining cases. Emergency department patients at Doctor’s tend to be “higher-acuity,” meaning more severe, because a lot of the people the hospital sees are uninsured or under-insured. “Oftentimes patients are not seen by primary care physicians for years and years and years,” said Thomas. “A lot of people when they come in here, they’re dying and that’s when they first see a physician.” He says that high rates of drug abuse, smoking and untreated conditions like high blood pressure or high cholesterol also make the patients Doctor’s treats less healthy than the general population.
Richmond and West Contra Costa County have long had a reputation for high rates of violent crime. While John Muir is the designated trauma center where paramedic vans responding to 911 calls deliver gunshot and stabbing victims, only some of the area’s violent crime victims end up there. Doctor’s Medical Center’s share of trauma victims are usually drop-offs who sometimes come in hours after the initial incident, so they’re much harder to treat. “In trauma we have that ‘golden hour,’ we call it, where it’s really important if we’re gonna resuscitate someone fully to get them to a trauma surgeon within an hour,” Thomas said. “And that’s where a lot of patients don’t make it, because they’ve been out there for two hours or more and people are trying to figure out what to do with them. That’s too late.”
Doctor’s ER treated 26 gunshot wounds in 2010, and has already seen as many in 2011. The hospital treated 21 stabbings in 2010, and 558 assault cases total.
A long history of financial troubles
Doctor’s Medical Center Interim CEO Dawn Gideon knows a thing or two about hospitals on the brink. Hired on at the end of March, Gideon works for Chicago-based Huron Consulting, which helps companies in an array of industries with cost-cutting, regulation compliance and efficiency. She bounces from failing hospital to failing hospital around the country and, in most cases, nurses them back to health. Her success rate is pretty good, she says: Only one hospital she’s worked for has closed, but it was already slated to close and she was hired on to oversee its shut down.
Based on her previous experience with distressed hospitals, Doctor’s is in pretty bad shape, she said. “There’ve been none worse,” she said. Despite the hospital’s $12-14 million shortfall, she said the hospital’s finances are as stable as they can be right now. “Doctor’s on any given day has probably five or six days cash in hand [to keep the hospital running]. I’ve worked with hospitals where they measure it in hours,” she said. “Understanding how much cash you have in the bank is an indicator of financial health, and ours is not very healthy.”
The problems Doctor’s hospital faces are systemic, Gideon said. The vast majority of the hospital’s patients, roughly 80 percent, are ensured by Medi-Care or Medi-Cal, which reimburses hospitals for service at a rate that is lower than what it costs the hospital to provide the services. Ten percent of Doctor’s patients are uninsured, and only ten percent are privately insured. “As an industry and a society that has always been okay. We accept that,” she said. “We shift the loss to commercial payers, the HMOS and PPOs, and they pay us a margin and that covers the loss that we see from the government paid patients or the patients with absolutely no insurance. What we have here is a patient population that is almost entirely government insurance.”
Public hospitals come in two forms in California: county hospitals and healthcare districts. Doctor’s Medical Center is run by the West County Healthcare district, which is overseen by a five-member elected board of directors. When healthcare districts were created by the California legislature in the 1940s, they were designed to ensure that underserved populations had access to small community hospitals.
But the legislation that created healthcare districts also left them hamstrung, Gideon said. While county hospitals are able to raise many kinds of taxes to support their hospitals, district hospitals are solely reliant on property taxes. County hospitals can also be helped out by dipping into the county’s general fund, which district hospitals are not able to do.
The West Contra Costa Healthcare District serves a population comprised of markedly more government-paid and uninsured patients, even in comparison to other healthcare district hospitals around the state, Gideon said. “Right of the bat we seem to be more financially disadvantaged patient population that we serve than other district hospitals,” she said. “Even within the district hospitals there are clearly those who have and those who have not. And we’re one of those who have not.”
“These troubles have been really ongoing 20 years or longer,” said County Supervisor John Gioia, who chairs the hospital’s governing board. In 1997, the district contracted with Tenet Health Services, a national for-profit company that runs hospitals, in hopes that they would be able to turn the hospital around.
But even a national company, which Gideon said is known for their success and efficiency, was not able to overcome the stark fact that a population with few privately-insured patients made it difficult, if not impossible, to run in the black. “They’re national, they’re the big guys, and they couldn’t make a go of it with this patient population,” Gideon said.
Tenet pulled out in 2004, leaving a hospital on the brink of collapse. The hospital district resumed operations and borrowed $32 million to keep Doctor’s open. The hospital is still paying that money back. Of the roughly $5.8 million in property tax the hospital receives, about $4 million is used to pay back what is borrowed in 2004. Less than $2 million goes to the operation of the hospital. “This hospital wouldn’t be here if that money wasn’t borrowed in 2004,” Gideon said. “But we’re using today dollars to pay for what happened back in 2004.
In 2005, the hospital was forced to close its emergency department to ambulance traffic for three months. By 2006, Doctor’s had permanently closed the burn, obstetrics and chemical dependency units.
In 2006, the hospital declared bankruptcy, which allowed it to renegotiate contracts with vendors and stanch the flow of some of the money it was bleeding. The hospital restructured, borrowed $10 from the county, and secured commitments from the California Medical Assistance Commission (CMAC), Kaiser and John Muir hospitals totaling $17 million a year for three years. Voters also approved a $52 per year parcel tax that helped support the hospital and by 2008, the hospital came out of bankruptcy.
Now, the roughly $5 million Kaiser and John Muir hospitals contributed to keep Doctor’s open has run out, and the state has restructured CMAC’s formula for distributing funds to hospitals, which considerably decreases the amount of money Doctor’s will receive from the state from $12 million in 2009 to $2.4 million this year and $1.2 next year.
Gideon says the hospital is looking at ways to increase efficiency and productivity through staffing cutbacks and by making sure every dollar of insurance owed to the hospital is paid, but she says that it will not make up the $12-14 million shortfall. “All of the things we can do we are doing, but certainly we are not going to close the gap by cutting expenses,” she said.
The battle to keep the hospital running
Last week’s study is an update to a 2004 study commissioned by Emergency Medical Services the last time Doctor’s Medical Center was in serious financial distress. The study’s release was timed to coincide with a trip the hospital’s representatives took to Sacramento last Thursday to lobby for funds to help it stay open. Gideon travelled to Sacramento with Gioia, whose West County district overlaps with the healthcare district Doctor’s serves, to brief the California Medical Assistance Commission on the hospital’s dire straits and ask the agency to give the hospital enough money to keep it operational for a few years so that they can make structural changes to permanently solve its problems.
“If we don’t have a commitment from CMAC certainly within the next month this board is going to need to make decisions about whether this hospital can remain open in the future,” Gideon said. Barring such a commitment, she said, it is important for the board to redirect their focus to planning an orderly shutdown of the hospital. “We’ll need to make sure that people know where to go for their medical records, know where to go for their treatments, for their dialysis, know that the [emergency department] has been closed and what their options are,” she said. “It takes time to communicate that.”
That leaves it up to the state, but the reconfiguration that reduced California’s contribution to the hospital from $12 million in 2009 to $2.3 million in 2011 also reduced CMAC’s discretion in determining the amount it contributes to a hospital, Gioia said. “They changed to a more formula-based, less discretionary model that allowed CMAC to make that call,” he said. Gioia said the district is also asking Kaiser and John Muir to pitch in to help the hospital stay open.
The county is also considering a $45 a year parcel tax, which Gioia says is polling well. Next year, the hospital is required to produce a plan for seismic upgrades. One option, he says, is to rebuild rather than retrofit, building a smaller hospital in place of the current 180-bed one, keeping the emergency and ICU beds but cutting down on the rest.
Gioia is hopeful that federal healthcare legislation will also help stabilize the hospital. The legislation, which goes into full effect in 2014, will require everyone to have health insurance, which should raise revenues for the hospital. But the hospital has to make it that far, and its future is still seriously in doubt.
Gideon, for one, is not so hopeful. “I think there’s this fallacy that everyone will have insurance and everything will be fine, and I’m not sure that that’s how it will work,” she said. She said the legislation provides for less financing for hospitals, not more. “They’re taking money out of what’s being given to the state in terms of support for Medi-Cal, so there are a lot of complications involved in the process,” she said, “but the long and the short of it is: more people covered and less money in the system.”
The emergency room
After a relatively quiet hour on that Thursday afternoon in the emergency room, the stillness was broken. A child was being delivered, and the situation was touch and go. Then the ER got word that a young dialysis patient was being rushed to Doctor’s Medical Center. Doctors, nurses and physicians assistants were all up and moving.
Kathi Volpe, the nursing supervisor in the ER, said young people in critical condition are a far too common sight in the Doctor’s Medical Center emergency room. “We get codes [patients in critical condition] on young people all the time,” she said. “Whether it’s dialysis or gunshot wounds or something else, everyday, all the time, we have them constantly here, all the time, filling up the ICU.”
“You got that that’s what an emergency room is really like, right?” said another nurse, who was rushing by. “A guy who’s going to ICU with diabetes, and a baby who’s dying. It’s like this all the time.”
Seth Thomas, his hair now covered by a paper surgical cap and wearing a plastic mask shielding his face, stood ready to enter the fray. Thomas came to Doctor’s nine months ago from Sutter Delta Medical Center in Antioch, where he still does a shift every week. The patient population is similar at Sutter, he said, but the hospital has one major advantage that Doctor’s doesn’t: “The difference is they’ve got money. They’ve got a nice big ER, tons of supplies, tons of nurses, things we don’t have here.”
Asked why he would leave Antioch to come to a hospital on the brink of closure, he replied, “This is an area that really needs this hospital. A lot of my physicians have been here for 20, 25 years and they don’t leave here. There’s a loyalty to this place because we get to treat the really sick patients, and that’s what’s important. That’s why we become doctors, right?”
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