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Health-care expert brings warnings
By Bret Bradigan
Not much good news has been coming out
of Sacramento lately. The latest bearer of bad tiding was Sharon
Avery, executive director of California Healthcare Association,
who spoke Thursday evening at Soule Park about the challenges
facing small community hospitals.
Avery was introduced Victoria Alexander, Ojai Valley Community
Hospital's chief executive, who said, "No one knows how
important their trade association until they become a hospital
CEO."
The view from Sacramento is clouded right now, said Avery, as
Gov. Davis' plans to bridge the budget's $34 billion gap have
been sharply countered by the state legislature, which has pegged
the deficit at $26 billion. Either way, she said, "The hospital
industry in California is in pretty bad shape right now."
Even some of the relief measures on the horizon aren't likely
to benefit the most vulnerable rural hospitals, she said, as
President Bush's prescription drug plan would come through health
maintenance organizations. And many rural areas are out of reach
of HMO coverage.
"Once again, the rural elderly aren't going to be happy,"
she said.
The most direct impact of the state budget crisis is the proposed
10 percent reduction in the rate paid to providers under Medi-Cal,
which is likely to decrease another 5 percent with next year's
budget.
Rural hospitals, with high costs and low patient volume, suffer
disproportionately, Avery said. In her presentation materials,
she showed that California's 71 rural hospitals serve 2.6 million
residents. Most - 76 percent - lose money on their operations,
with an average loss of -3.9 percent statewide. During the past
three years, 20 percent of rural hospitals have closed or gone
bankrupt.
By most of the markers Avery displayed - patient margins, patient
revenue, patient costs - Ojai exceeds average or is in the middle
of the pack. For instance, Ojai's patient margin of -3.1 percent
in 2002, is significantly better than the -8.8 percent average
of similar-sized hospitals around the state.
Trends in hospital practices show a decided shift away from inpatient
procedures, which are reimbursed at lower rates by insurance
carriers and Medicare, to outpatient procedures, Avery said.
And fewer hospitals are providing critical-care services, while
10 rural hospitals do not provide surgery.
Avery urged the hospital's staff and board to be ambassadors
for the hospital, to urge the community to support the hospital
as a necessary institution, as well as an economic engine.
Not only hospitals, but rural doctors are feeling the crunch.
Dr. Lois Barnes, with a local obstetric/gynecologic practice,
said that mounting pressures make it increasingly difficult to
maintain a healthy practice in a small town. "We haven't
had any improvements in Medi-Cal since 1985," she said.
"We're also seeing a 50 percent increase in malpractice
(insurance). People don't understand, we just can't do it."
An analysis Avery presented of Modoc County's Surprise Valley
Hospital, in California's northwest corner, showed that its loss
would take 20 percent of the county's jobs, half of the residents
over age 65, cause its high school to shut down, and, with the
loss of personal incomes from the hospital and schools, as well
as service jobs, take away 54 percent of its total economic activity.
This crucial economic contribution needs to be widely known,
she said, both in the community and through local legislators.
"You need to get your senators and assemblymen to the hospital
and have a tour, and show them how the hospital supports the
community," she said. "There is a close tie between
the hospital and economic development."
© 2003
The Ojai Valley News
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