Placerville Hospital ‘Turning a Profit,’ Despite Decision to End Managed Care Contracts
Marshall Hospital, an "independent" 107-bed hospital in Placerville, "is still ... turning a profit," despite a decision to end capitated contracts with "several large HMOs," the Sacramento Business Journal reports. The contracts, in effect for four years, resulted in a $21 million loss for the hospital. This year, however, the hospital has posted a net income of $4.5 million on revenue of $150 million, while "operating capitation-free." The hospital admits a number of patients from traditional Medicare, Medi-Cal and preferred-provider contracts and has non-capitated contracts with health plans such as Blue Cross of California and Blue Shield of California. Frank Nachtman, administrator of Marshall Hospital, said, "We no longer have capitated contracts. We are not assuming the role of an insurance company, but are instead focusing on patient care, which is what we do best." The Sacramento Business Journal reports that the hospital will likely "brea[k] even" in the next fiscal year as a result of planned capital improvements and salary adjustments. However, Nachtman said that he fears that problems with the health care system -- such as nursing and physician shortages and an aging population -- could endanger the hospital's "financial health" after 2002. "It may cause us to go into the red again," he said (Gonzales, Sacramento Business Journal, 11/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.