Hospital’s woes could get worse
Register Pajaronian, January 4, 2006
By Roger Sideman
Watsonville Community Hospital, already beset with financial problems,
is now at risk of losing more than $2 million per year if it fails to
qualify for federal reimbursements to hospitals providing care to working
poor and uninsured patients. Changes in the way the reimbursements are
secured could be "extremely devastating," officials
said.
"It would have a serious negative impact on the hospital and would challenge
our ability to continue seeing these patients," hospital CEO Kaylor Shemberger
said.
To cover the uninsured and under-insured, Watsonville Community Hospital
receives some money from state and local agencies, but the federal funding
has become a lifeline.
"In (the hospital’s) current strained financial condition, this would
be a serious blow to (its) finances," Rama Khalsa, Santa Cruz County Health
Services Agency director, wrote in a letter to county supervisors in October.
Officials at the hospital have said it’s already operating at a loss well
into the millions. In June, the hospital announced it would lay off at least
a dozen employees in order to save $1 million annually. Then, in September, the
cancer ward closed its doors.
Hospitals that serve predominantly low-income communities are protesting
President Bush’s proposed cap on payments in an effort to reduce or eliminate "waste,
fraud and abuse" in the nation’s health care system, which includes
Medi-Cal, California’s $34 billion Medicaid program. The subsidies for "disproportionate
share" hospitals, channeled through state governments, are mired in controversy
as states have discovered ways to maximize federal funds and reduce state matching
contributions.
Government reimbursements for uninsured, underinsured and migrant patients
still don’t match the actual cost of treatment.
Watsonville Community Hospital is left to cover the difference, which was
about $3.4 million in 2004. It serves three times more Medi-Cal patients
than Dominican Hospital in Santa Cruz, which is a problem because Watsonville
doesn’t
have the wealthier paying customers to balance what is commonly called the "payor
mix."
"By virtue of that imbalance of payor mix, if (federal reimbursement) were withheld, it would be extremely devastating," Shemberger said on Tuesday.
When the hospital was public and locally owned, Medi-Cal reimbursement
was easier to secure, explained Patti McFarland, CFO of Central Coast Alliance
for Health, a public health care provider serving more than 85,000 area
residents. Since WCH was bought out by Tennessee-based Community Health
Systems, a private corporation, the reimbursement process is no longer
as ensured. The application process has also become much more complex.
The hospital has hired an outside consulting firm to navigate through the
government’s
labyrinthine payment procedure, Shemberger said.
"The Feds have been saying they’re gonna to pull out of giving to
California hospitals because they’re sick of paying," said McFarland,
who is working with the county to help the hospital qualify for the $2 million
in funds. "We think they’re qualified."
With about 35 percent of WCH’s total business going to Medi-Cal patients,
compared to 14 percent at Dominican, "you would think if any of hospitals
qualify, it would be us," Shemberger said.
The hospital crisis is especially severe in California. Since 1998, more
than 50 hospitals have been forced to shut down, and up to 15 percent more
may close in the near future. More than 7 million Californians are currently
uninsured.