Financially Strapped Hospitals Close Doors, Displace Patients
By John Leighty
October 18, 2004
A wave of hospital closures in California is causing major disruptions for patients, staff, and communities, and the prognosis is grim for a quick recovery in an industry paying an increased share of the bill for the uninsured and poor.
Seven hospitals have either shut down or are about to close their doors – the latest casualty being the 229-bed Robert F. Kennedy Medical Center in Hawthorne – and several other hospitals are reportedly teetering financially and may call it quits.
In Los Angeles County, six emergency departments serving a total of more than 100,000 people have closed during the last year, putting a strain on the 78 remaining EDs that already have a high ambulance diversion rate because of overcrowding and the need to stay within a mandated nurse-to-patient ratio of 1:4.
“The bottom line for all the closures has been a two- to threefold increase in the number of uninsured patients receiving care at the hospitals,” says Jim Lott, spokesman for the Hospital Association of Southern California. “That’s the issue.”
Lott says the latest closure of RFK, which has lost $53 million since January 2002, removes another ED serving 24,000 patients annually from the county’s emergency system. He says the community impact of its Dec. 31 closure is still uncertain and predicts at least one more hospital will close before the end of the year.
“We still don’t know how RFK’s closing will affect nearby hospitals, but we do know they can’t absorb many more patients,” Lott says. RFK says it also came under financial pressure from two unfunded state mandates – the nurse staffing ratio law and seismic upgrading requirements.
Regardless of the circumstances, removing life support from a hospital can have unforeseen ramifications. The closure of 80-year-old San Jose Medical Center Dec. 9, for example, could leave Santa Clara County with only two trauma centers and the inability to assist serious accident victims from three surrounding counties that count on the service.
The closure also will shut down an ED that treats 32,000 patients annually and displace some 900 employees, about 450 of whom will lose their jobs. The hospital, owned by Hospital Corp. of America, is working to help place workers at two other HCA hospitals in the county, says medical center spokeswoman Lesley Kelsay.
The downtown San Jose facility was scheduled to be phased out in three years and the Sept. 8 announcement giving state regulators the required 90-day notice of closure came as a jolt to the staff and community.
“It’s a blow to everybody,” says community activist Rosylin Dean, a member of a coalition of 80 San Jose groups working to ease the effects of what it thought was a three-year winding-down period. An immediate impact will be on seniors living in housing projects who could walk to the hospital for services, she says.
Dean says a $50,000 study on the impact of the medical center’s 2007 closure is due Nov. 1 and now will be compromised by the early shutdown. One suggestion is for the funding of a 24-hour urgent care center in the downtown area.
While some 300 nurses are directly affected by the medical center’s closing, California Nurses Association field representative Patty Lasky says their option to “bump” by seniority at the other HCA hospitals puts the jobs of some 674 RNs in uncertainty.
Lasky also says area residents will lose a pediatric ICU, a rehab facility for stroke victims, and a skilled nursing facility – services not available at HCA-owned Regional Medical Center San Jose 2.4 miles to the east.
Kelsay says HCA decided to shut down the hospital after losing $12 million in 2002 and $16 million in 2003. Between San Jose Medical Center and Regional, 2003 losses came to $40 million, she says.
During that time, health care costs rose 23% while reimbursement for Medi-Cal and other government programs – which make up 75% of the hospital’s business — increased only 4%, she said.
Meanwhile, HCA has petitioned the county to allow the trauma services to be transferred to Regional, which doesn’t have that capabiity, Kelsay says. Some modifications were being sped up for that possibility, including the installation of a $1 million cardiac catheterization lab, she says.
“To justify operating in this region, we had to minimize our losses,” Kelsay says of the closure, adding that HCA has already committed to a $61 million expansion of Regional. “Looking at another three years where it wasn’t going to get any better, we simply had no choice.”
Hospitals closing this year include: Santa Teresita Hospital in Duarte; Century City Hospital in Los Angeles; Monrovia Community Hospital; Elastar Community Hospital in Los Angeles; Northridge Hospital Medical Center in Van Nuys; and Angels Hospital in Rancho Cucamonga.
For nurses and other health care workers at ailing hospitals, there are some bright spots. Tenet HealthCare, for example, said it would attempt to sell 19 hospitals in the state to buyers who agreed to retain staff, services, and existing union contracts, which is being done with the sale of Midway Hospital Medical Center in Los Angeles.
A group formed by seven physicians associated with Midway recently reached an agreement to purchase the facility and its equipment from Tenet for $10 million.
The group, Physicians of Midway Inc., plans to keep the 225-bed hospital operating as a full-service acute care facility with a 24-hour emergency room, says Shahram Ravan, MD, the group’s president, noting that some real estate developers had expressed interest in buying the hospital for the land value.
The group also promised to offer employment to “substantially all” of the hospital’s employees in good standing and to honor any existing labor agreements.