Doctors Medical Center, a health care landmark in San Pablo for more than 60 years, shuttered its doors on April 21 — a victim of low Medi-Cal reimbursement and poor patients. The West Contra Costa Healthcare District, which owned and operated DMC, tried several options over the course of several years to keep the hospital afloat but finally pulled the plug this spring, announcing the decision five days before the facility closed.
In anticipation of DMC closing, the Hospital Council of Northern and Central California and Contra Costa Health Services — a county government department offering a health plan, clinics and health centers — formed a regional planning group a year ago to explore and evaluate previously studied strategies for finding a sustainable, long-term care system for West Contra Costa County.
The group posed alternatives, including a downsized hospital using the existing license, a county hospital, a 24-hour satellite emergency department and an urgent care center. Stakeholders decided an urgent care center would be the most financially viable, largely because as many as 85% of people using the DMC ED did not require hospital admission, according to the group’s final report in December.
LifeLong Medical Care based in Berkeley opened an urgent care center across the street from DMC one day before the hospital closed. The planning group anticipated that the relationship with LifeLong, a federally qualified health center, would make it easier for the new urgent care center to earn designation as a FQHC.
The urgent care center is not yet complete but plans to have more than 10 examination rooms, along with observation rooms.
Marty Lynch, executive director of LifeLong Medical Care, said the San Pablo center, open noon to 8 p.m. every day, sees about 50 patients a day. Some ED staff members from DMC have moved over to the urgent care center, Lynch said.
“The urgent care center is not a replacement for a hospital or emergency room in the community but will make primary and urgent care available,” he said.
Stakeholders said there is no plan to add another urgent care center in West Contra Costa County.
New Strategies for West Contra Costa County
John Gioia, chair of the Contra Costa Board of Supervisors, said the board developed a three-pronged strategy for health care in the post-DMC era:
- Support a sustainable, urgent care center in West County;
- Increase and expand opportunities to get residents into a medical home to receive better primary care services; and
- Work with Kaiser Permanente to expand its ED in Richmond.
After DMC closed its ED to 911 ambulances, some emergency patients were sent to Kaiser’s Richmond Medical Center, the only other ED in West Contra Costa County.
Previously, 30% of patients at Kaiser Richmond’s ED were non-Kaiser Permanente patients — but not necessarily from DMC. The number of non-Kaiser patients using the ED has jumped to nearly 50%, Gioia said, based on conversations with Kaiser.
“Our emergency department is frequently at or above capacity,” said Odette Bolano, senior vice president and area manager of Kaiser Permanente East Bay. “For medical situations that are not life-threatening and do not require emergency care, we encourage residents to visit their primary care provider or use urgent care services, such as those operated by LifeLong Medical Care.
“As we have all along and with our community partners, we are doing our part to provide continuity of care,” she said. “The work that lies ahead to help ensure that residents retain dependable access to health care must be a community responsibility.”
Because Kaiser’s 50-bed Richmond hospital has an overtaxed ED, some San Pablo patients will be directed to the closest available ED, while those requiring specialty care will be transported to other facilities in Contra Costa County or nearby counties, such as Kaiser Vallejo, Contra Costa Medical Center in Martinez or John Muir Health in Walnut Creek, according to Contra Costa Health Services. John Muir reports an increase in transfer patients from other hospitals, along with a small increase in use of its ED.
To help former DMC patients, CCHS and its partners developed a resource list of health care services in West Contra Costa, including urgent care centers, health centers, clinics and an advice nurse line.
Low Reimbursement Major Cause of DMC’s Demise
Rebecca Rozen, regional vice president of the Hospital Council, a not-for-profit hospital and health system trade association, said low reimbursement rates from both Medi-Cal and Medicare, and a reliance on only one funding source were the biggest problems for DMC. She said the same problems exist in urban areas around the country that address the needs of low-income populations.
Gioia added that Medi-Cal providers are stretched to the max due to Medi-Cal expansion as a result of the Affordable Care Act. He said for every dollar spent on providing care to Medi-Cal patients, DMC only received $0.60.
Lynch said hospitals serving low-income communities face other challenges, as well — hospital consolidation, more care provided in primary care settings and less need for hospital beds. Lynch had hoped that Contra Costa County could have provided support to DMC, but funding just wasn’t available, he said.
Kathy White, interim CEO of DMC, acknowledged the precariousness of community hospitals targeting low-income populations — especially in light of low Medicaid reimbursement and insufficient funding. She pointed out that although DMC had lower operating costs than many other Bay Area hospitals, it still was not possible for the facility to break even.
Future of Acute Care in West Contra Costa County
White said the entire DMC building will be sealed up by mid-July. In the meantime, DMC has placed the property up for sale under one of two scenarios:
- Real estate assets put on the open market with asking price of $20 million; or
- Find a purchaser to reopen the hospital with a commitment to operate it for five years.
Proposals to operate an acute care facility must be submitted to the district by June 30. A district board meeting is planned in July.
A new facility could go through the process of meeting the regulatory requirements to activate DMC’s suspended license, which would require significant capital. The license is currently in suspension through Oct. 31, 2016.
Eric Zell, chair of the West Contra Costa Healthcare District’s governing board, said the district is limited in what it can do with DMC, its land and equipment.
“Our preference is clearly a new hospital but based on our past efforts in the health care marketplace, I am not too optimistic,” he said.
He would like to see a smaller hospital, with an ED and a more robust urgent care center, open near the existing West County Health Clinic in San Pablo across the street from DMC. But with Kaiser Richmond’s 70% market share in West Contra Costa County, the odds of reopening a competitive hospital are not great, he said.
Although the hospital is gone, its debts remain.
Facing a $20 million deficit in operating costs by 2014, and failure to strike up any long-term partnerships, DMC was unable to survive with funding from its 2004 and 2011 parcel tax initiatives alone. Those taxes generated $5.6 million and $5.1 million a year, respectively.
The 2011 tax has since been discontinued because it required DMC to maintain its ED — and that closed last August — to stay in effect. In addition, a third parcel tax campaign failed to pass in spring 2014.
A parcel tax approved in 2004 is dedicated to paying off debts, and that will not expire until 2027, Zell said. The district also must repay Contra Costa County tax advances, which were used to keep DMC open over the past five years.