Study cites fiscal woes

By Adam Spencer, The Triplicate November 01, 2013 05:18 pm

Hospital Board hears presentation

Nearly a year after it was first announced, a strategic options study on the future of Sutter Coast Hospital in Crescent City was completed last week, and its results were presented to the hospital’s governing board Tuesday. 

The study results will be presented to the public via a live online presentation at 11 a.m. Tuesday and will be available for rebroadcast after that time, according to hospital officials.

Born out of the controversial possibility that the local hospital could merge with parent-corporation Sutter Health in a move called “regionalization,” the study quickly became a controversy in itself.

Critics have long said the $170,000 study would be biased, based on the fact that it was funded by Sutter Health, after outside funding disintegrated. Some community leaders and groups, including the Del Norte County Board of Supervisors, decided not to participate.

Affiliation with the study became such a political hot potato that when the Camden Group, the consultants chosen to conduct the study, started in May to form a 15-member local steering committee for community input, most members asked to remain anonymous.

During the final meetings, however, committee members unanimously voted to have their names attached to the study’s results.

Satisfied participants 

Several participants in the process applauded what they saw as the transparency and responsiveness from Sutter Coast and Sutter Health representatives throughout. Extra meetings between the Camden Group and the steering committee were scheduled and the process was extended to ensure that all concerns were addressed, they said.

“I think everyone agrees that the process was fair and transparent,” said Kelly Schellong, a  Crescent City Council member chosen to represent that body on the steering committee.

If a question couldn’t be answered during one of the meetings, committee members said Sutter Coast CEO Linda Horn or the Camden Group almost always sent out an email the next day with an answer, members said.

“It was very transparent and responsive to members of the committee that were hungry for more information,” said John Menaugh, a committee member who was always open about his participation, since he served as president of the Crescent City - Del Norte County Chamber of Commerce.

Menaugh retired as CEO of Sutter Coast Hospital in 2008 after 22 years as the facility’s top administrator, including oversight of the construction and transition to the current building on Washington Boulevard.

Even after two decades in the hospital industry, Menaugh said he had plenty to learn to get up to speed considering that the nature of the industry changes “very quickly,” he said. But the Camden Group was up to the task of educating the committee, he said.

Clarke Moore, a committee member who participated not as chairman of the Del Norte Healthcare District, but as an individual with a history in the health care field, said the Camden Group created an environment where “there was no such thing as a stupid question.”

A bad beginning

Members of the steering committee and Sutter Coast representatives readily admit that communication with the public was  poor on the front end of the move toward regionalization.

Even though some challenged the way some information was presented by Dr. Greg Duncan, the hospital’s chief of staff and the lead opponent of regionalization, there was also gratitude among members the awareness Duncan brought to the issue.

“It ended up engaging a much larger audience to talk about what’s important for us as a community in the health care industry,” Schellong said.

Hospital officials have stressed that the study would produce findings, not recommendations for what the board should do next.

Financial outlook

Sutter Coast CEO Linda Horn issued a letter Wednesday about the completion of the study’s results and when they will be shared publicly.

In the letter, Horn also detailed  the challenges that Sutter Coast, and many other hospitals nationally, are facing financially:

• “A steady drop in census:  We have 49 inpatient beds, but the number of patients in the hospital each day has steadily declined from an average of 25 in 2008 to just 19 in 2012.

• “A changing patient mix:  The number of uninsured and Medi-Cal patients has increased, while the number of commercially insured patients has decreased. This has resulted in a sharp decline in revenue.”

At Sutter Coast, approximately 79 percent of inpatients are insured by Medicare (51 percent) or Medi-Cal (28 percent), hospital executives have said.

Horn has said that because Medicare and Medi-Cal reimbursements from the state and federal governments do not cover the full costs of treatment — sometimes as little as 40 to 50 percent of treatment costs — that Sutter Coast is relying on the 15 percent of its in-patient pool with private insurance to make up the difference.

Additionally, Horn’s letter said that  the number of patients 65 and older in the community is projected to grow 12.5 percent through 2018.

“We need to get this hospital on solid footing with sufficient resources to ensure we are able to continue providing the high quality care this community deserves and upon which it has grown to depend,” Horn’s letter said.

 One controversial method of increasing revenue would be to convert Sutter Coast into a Critical Access Hospital. Such hospitals receive cost-based Medicare reimbursements, but must maintain a maximum of 25 in-patient beds and a 96-hour or less average length of in-patient stay.

Some steering committee members who went into the study with a fear of Critical Access designation said they were provided with information that quelled some fears.

Read last Saturday’s “Closer look at Critical Access” at triplicate.com for more information on the designation.

The findings will be presented in a WebEx presentation Tuesday  at 11 a.m. Questions will be accepted during the 90-minute presentation online.

You can listen to the presentation by calling: 1-800-344-6491 and entering passcode: 9361623

Those wishing to participate online are advised to test their browser at this URL prior to the meeting: http://tinyurl.com/5z52oq

The link for the actual meeting is: http://tinyurl.com/oqfj99u

A recording of the WebEx will be placed on www.suttercoast.org within 24 hours after the presentation for anyone who is unable to watch during the scheduled time.

Reach Adam Spencer at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it