Sutter Coast plans to apply for conversion to Critical Access while preserving its local Board
In what Sutter Coast Hospital’s CEO called a “sincere effort to find a middle of the road” solution, the hospital Board of Directors voted Thursday to pursue Critical Access Hospital designation while maintaining a local governing board.
“What we wanted to do was have the local board in effect during the time it takes to turn around the financial well-being of the hospital,” said Ken Hall, chairman of the hospital’s board of directors, by phone Friday.
He acknowledged the continuation of a local Board could be temporary.
Hall said that the resolution supporting a local board “says very clearly to Sutter Health that if we’re going to regionalize, the local hospital needs to be assured that there will be representation on that board.”
Just over a year ago, the board decided to focus more attention on the Critical Access issue than regionalization, since that was “the spark that ignited the community,” Hall said.
Applying for Critical Access designation, a federal program that alows rural hospitals to receive cost-based reimbursements for Medicare patients, is expected to significantly boost revenue at Sutter Coast, where more than half of the patients are insured by Medicare.
Opponents of the hospital’s proposal for a Critical Access facility have said that one of the program’s restrictions, a maximum of 25 acute care beds, will cause many additional patients to be flown to other hospitals due to lack of space. Sutter Coast currently has 49 acute care beds.
“It’s a great program when you’re not downsizing to fit it,” said Dr. Greg Duncan, the hospital’s chief of medical staff and the only hospital board member to vote against Critical Access on Thursday.
Duncan said that when Sutter Lakeside Hospital in Lakeport switched to Critical Access in 2008, the hospital’s emergency transfers jumped from 257 patients in 2007 to 1,064 patients in 2009.
Duncan said one Lakeside doctor told him that the transition to Critical Access there has been “amazingly problematic.”
The public health officer of Lake County has said that increased emergency transfers from small hospitals to specialized centers for services like cardiology or stroke care is a common industry trend and that the Critical Access transition at Lakeside did not stay controversial for long.
Sutter Coast executives and the hospital board chairman have pointed to a consistently falling daily census rate at the hospital, which averaged below 20 patients through 2013, as a reason to not fear the 25-bed cap. Additionally, they said that utilizing different classifications of beds that do not count toward the 25-bed cap is a way that the hospital can avoid a spike in emergency transfers.
Hall said the hospital will have procedures in place so that if the facility is close to the 25-bed cap and there is an influx of patients requiring acute care “you have a plan in place for triage — who’s going to be transferred and how are the transfers going to be made.”
Linda Horn, Sutter Coast’s interim CEO, said that the designation of a particular part of the hospital for “observation beds,” which do not count toward the 25-bed cap, is a certainty under Critical Access.
“A patient may be in an observation status even though the CAH furnishes the patient overnight accommodation, food, and nursing care,” according to federal guidelines for Critical Access Hospitals.
During the next eight to 18 months while the hospital jumps through the hoops necessary to become a Critical Access facility, Horn said it will simultaneously research and evaluate what other types of units with beds that don’t count toward the 25-cap should be implemented at Sutter Coast.
Horn said the hospital could create a distinct sub-acute care area where patients could receive treatment like IV therapy and pain management until they are ready to be discharged. In this area, patients could legally stay longer than 96 hours, she said. Along with the 25-bed cap, Critical Access Hospitals are required to have an average length of stay of less than 96 hours, on an annual basis.
These sub-acute care areas would not compete with local convalescent homes or replace acute care functions, but “fill a niche in the middle where patients spend a few days when they aren’t quite ready” to be discharged, Horn said.
By looking at the unique diseases and common ailments in the community, the hospital will also evaluate the wisdom and necessity of creating distinct psychiatric and rehabilitation units, which also would not count toward the 25-bed cap, Horn said.
Sutter Coast will continue to be a full-service hospital, Horn emphasized, with a 24/7 emergency room. Critical Access Hospitals are actually required to maintain a 24/7 emergency room that has a registered nurse on-site and that has an on-call doctor who can be at the hospital within 30 minutes.
The first step in applying for Critical Access designation is completing a financial feasibility analysis to determine if the program would be beneficial to the hospital. Sutter Coast completed this in both 2008 and 2012, and Horn said the facility should have no problem qualifying for CAH status.
The chairman of the board is convinced that Critical Access is “not the impending disaster that some people have made it out to be.”
Horn said that the stability that comes with Thursday’s votes should also help with recruiting new physicians.
“Clearly defining our future helps us not only recruit but retain talent,” Horn said.
CAH not a panacea
The additional revenue that will come with CAH designation is not expected to be enough to bring Sutter Coast into the black, Horn said.
“Revenue won’t cover our expense unless we’re prudent,” Horn said.
The hospital could continue to eliminate some positions through attrition and continue to encourage “flexing people off,” having employees voluntarily take time off when the patient census is low, Horn said.
“At the end of the day, when we see what our volume is we may not be able to maintain every job,” Horn said.
When possible, the hospital has cross-trained existing employees working in an overstaffed department to fill a need in another part of the operation, Horn said.
To cut costs, the hospital will also evaluate what non-patient clinical services could be completed more efficiently outside of the area.
“Centralization will be part of our future,” Horn said, adding that this will not be applied to patient care services, since “we are already at a level of basic services.”
Some centralization that has already occurred, like billing, received criticism for being inefficient.
Horn said that the new billing system was not fully implemented at first, but it “has improved significantly.”
Horn said improved pre-planning will make any further centralization actions smoother.
Medical staff support
In the wake of a $170,000 “strategic options study” commissioned by Sutter Health and conducted by its consultant, the Camden Group, the rhetoric in the community seems to have softened.
Thirty-six members of the Sutter Coast Hospital medical staff signed a letter that ran in the Dec. 5 edition of the Triplicate that thanked the community members who served on the steering committee.
“We look forward to a strong partnership between the medical Staff and the Hospital moving forward,” the letter states.
“Our success is dependent on a close working relationship with our medical community and that support will make the difference in planning the future of our hospital,” Horn said.
Two members of the steering committee accepted a request from Sutter Coast to record radio spots about their experience.
Trista Mentink, who works in the diagnostic imaging department of Sutter Coast and was asked to participate as the 2012 employee of the year, said this in her radio spot: “I grew up in a small community with two hospitals — both of which were critical access. The community didn’t know the difference. We just knew when we needed care we had it. I know that the fear of the unknown scares our community, but trust me: fewer beds does not equal less care.”
Clarke Moore, who participated on the steering committee as an individual, also recorded a radio spot: “I wanted to know if Sutter was guilty of profiteering ... What I confirmed is that Sutter Coast Hospital and Sutter Health appear to be making necessary business choices to ensure a viable hospital. They are strong partners with this community — not profiteers.”
Horn said that the hospital tried to listen to the concerns of the community over possible loss of local control and downsizing that have been voiced over the past two years. More recently, the hospital received less than 10 comments on the hotline and email address that were set up since the completion of the study.
“People said no regionalization; we’re not regionalizing. People said keep a local board; we’re keeping a local board,” Horn said.
Duncan said the resolution supporting a local board does not mean much since it could be changed at any time.
“In what concrete, binding way did that change anything?” he said.
Horn said the steering committee agreed to be available as the hospital undertakes the changes and that community input will continue to be an important component.
“We’ll try to listen to any avenue that gives us feedback,” Horn said.
See "Sutter Coast statement on Critical Access" in Triplicate.com's Local News section for the hospital's press release on the vote to pursue Critical Access Hospital designation.