Los Angeles Times Looks at Financial Deals Involving Two Rural Ventura County Hospitals
The Los Angeles Times on Sunday examined how Ojai Valley Community Hospital and Santa Paula Memorial Hospital are "[b]ucking a trend toward larger and fewer hospitals" in the state through financial deals "that could ensure their existence for years to come." The number of acute-care hospitals in the state has decreased from 520 in 1993 to 450 today, according to the California Healthcare Association.
In addition, state reports indicate that more than half of those remaining hospitals are losing money, the Times reports. The number of county hospitals in the state has dropped over the past two decades from 66 to 17, according to Jim Lott, a spokesperson for the Hospital Association of Southern California (Kelley, Los Angeles Times, 11/7).
The boards of Community Memorial Hospital in Ventura County and the 103-bed Ojai Valley facility in September agreed to merge the assets and liabilities of the two private facilities while retaining each hospital's buildings and services. According to Gary Wilde, CEO and president of Community Memorial, the merger will benefit the 240-bed CMH by protecting the referrals it receives from Ojai Valley and by allowing the larger facility to receive referrals Ojai Valley was sending to other hospitals.
The deal, which is subject to approval by Attorney General Bill Lockyer (D), would take effect late this year or early next year, according to hospital officials (California Healthline, 11/4).
The 49-bed Santa Paula facility, which operated the only emergency department between Santa Clarita and Ventura, closed in December. The hospital's board of trustees filed for Chapter 11 bankruptcy protection in federal court in Santa Barbara three days after the closure. The Ventura County Board of Supervisors in September voted unanimously to purchase the hospital through a deal with the bankrupt facility's creditors.
The hospital's board of trustees has said that it is working with Kare Healthcare on a rival business proposal. The hospital board and Kare signed an agreement in June to allow Kare to prepare a business plan for the hospital and take over management of the facility (California Healthline, 10/1).
Pierre Durand, the chief health care officer in Ventura County, has said Santa Paula would break even financially under the county deal through favorable reimbursement rates from the state and federal health insurance plans and through the large number of privately insured citizens who live nearby.
Lott said, "Hospitals are largely a black hole of expenditure, especially for governments, so this is really a unique situation to have both of these hospitals surviving. And it's happening because of immense community support." Lott added, "The Santa Paula hospital situation is very rare. I can't recall a county hospital system expanding in the last 10 or 15 years."
Dr. Martin Pops, chair of the not-for-profit foundation that owns Ojai Valley, said, "The stand-alone, rural, small hospital is rapidly becoming a thing of the past, so we saw the handwriting on the wall."
Wilde said Community Memorial will receive relatively little financial benefit from the deal with Ojai Valley, but he added that the merger was about "preservation." Wilde said, "If we can keep a hospital open that makes sense for everybody" (Los Angeles Times, 11/7).
In other rural hospital news, Tulare District Hospital plans to implement a bar code system for patients -- "a rarity for rural hospitals" -- that will provide health and billing information as part of an electronic health record system being developed at the 112-bed facility over the next three years, the Fresno Bee reports. The $3 million system is funded by HHS and matching grants from the hospital.
Tulare is one of four hospitals in the state to receive part of the $139 million in federal grants for the promotion of health information technology. Hospital officials said Tulare was chosen because it is similar to many hospitals across the nation in size and location. Hospital officials said the system would help them share, coordinate and streamline up-to-date patient information (Fonte, Fresno Bee, 11/2).