STANISLAUS COUNTY: Financial Woes Plague Health System
In what appears to be a no-win situation, Stanislaus County's Health Services Agency has run a deficit of $8.25 million since closing its county-run medical center in 1997 due to excessive losses. While Stanislaus Medical Center made money in its last few years, administrators decided to close the facility upon the realization that future deficits would ensue "because there weren't enough patients to fill its beds." Officials transferred most indigent care to nine outpatient clinics. But the move cost the county $4.8 million in federal "disproportionate share" funds, designated for facilities that serve an above-average number of indigent patients. Modesto's Doctors Medical Center, which "contracted with the county to provide emergency and inpatient services, couldn't get the money either." Although Los Angeles County was granted a waiver when it went through a transition to inpatient care in the mid-1990s, HCFA denied a similar request from Stanislaus. In addition, the county agency lost $1.7 million in Medi-Cal reimbursements "because the clinics were no longer licensed under Stanislaus Medical Center." But perhaps most troubling to county officials, Medi-Cal payments were denied to the tune of $1.75 million due to accounting and billing errors. "There's no excuse for that," said county Chief Executive Officer Reagan Wilson. He said, "This hasn't worked out as best as it could have. But these aren't issues that can't be managed. ... When you look at any big business that closes, there is always a cost. It's unavoidable."
The Camden Group, a consulting firm hired by the county to assess its problems last year, made six recommendations for improving its fiscal footing. Wilson said all six should be implemented by June. The health agency will also "ask to borrow money from its health care trust fund -- the $12 million the county received from Doctors Medical Center's parent company," Tenet Healthcare Corp. "One of the reasons we put that money in a trust was we knew there would be problems," said Wilson (Birch, Modesto Bee, 9/13).