Santa Paula Times

Councils, citizens question finances and fate of Santa Paula Memorial Hospital

January 29, 2003
Santa Paula News
By Peggy Kelly Santa Paula TimesAlthough everyone at the special joint Santa Paula and Fillmore city council meeting agreed that Santa Paula Memorial Hospital must be saved at all costs, deep concerns, and at times anger, centered on secrecy of management expenditures and their impact on the river valley’s only hospital’s overhead.The Jan. 22nd special meeting to discuss the fate of the “Hospital on the Hill,” one of only three such state institutions built entirely with community donations, led to the formation of a special committee to study hospital issues. Costs for the SPMH management company, Nashville-based Quorum Health Resources, as well as operations and staffing were also sharply questioned.“The hospital affects not only our quality of life, but in some cases life and death itself,” said Mayor John Procter at the beginning of the meeting, which drew about 200 residents and hospital employees. “No one here thinks the hospital will go away; the community won’t allow it.”The river valley has been in turmoil since a Dec. 20th fundraiser letter was sent to the community and run as advertisements in area newspapers. The letter focused on large donations and a 90-day timeframe for contributions but did not state a fundraising goal, later revealed to be $600,000, to keep the hospital doors open. Only about $100,000 has been raised so far and the $10 million reserve as well as an almost $1 million line of credit, have been depleted.Mark Gregson, SPMH CEO, outlined hospital impacts including rising costs, lowered reimbursements, a weak economy, eroding patient base and lack of physician support.The contract with Quorum, dating from the mid-1990s, allows SPMH to have purchasing muscle and added services, he noted, although the hospital has lost money since 1988 as revenues have remained constant.“Most alarming,” is the dramatic redirection of patients to other hospitals by physicians over the last few months, Gregson noted, and the Independent Physician Associations that were formed to “simplify contracting with insurance companies and have turned into extensions of insurance companies,” who rate bonuses for cost savings.Gregson said that volume remains the key and if more residents used the 49-bed facility, only four more patients a day would be the break-even point, it could provide a financial turnaround.Santa Paula and Fillmore chambers of commerce executive directors Jeannette Maland and Cindy Jackson agreed that the business organizations are ready to help the hospital and have formed special committees to “see what we can do. . .”“It’s a tough business when people look at you and say I wish you were sick,” said Supervisor Kathy Long, who noted that there “might be a possibility for partnership,” with Ventura County Medical Center. “Access and affordability are important to the county system. . .we are the safety net,” serving about 99 percent of uninsured residents and the county’s own employee health insurance plan.About $16 million in health care services provided to river valley residents go elsewhere, she added.The gloves came off during public comment when Flo Zakrajshek questioned expenditures “to the tune of about $60,000 a month” said are paid to Quorum. “These are issues that should be answered. . .”“I love Santa Paula Memorial Hospital, it’s very dear to me and saved my life,” said SPMH Auxiliary President Jody Caudillo.She said the volunteer organization,which has donated over $450,000 and thousands of service hours over the years, has numerous recommendations ranging from removing Quorum as the management firm to eliminating several positions including public relations and human resources, among others.
Councilman Rick Cook said he was “amazed at some of the rumors I’ve heard over the last few months,” centering on Quorum expenses including transportation costs, home and vehicle leases, employee retirement payments, Foundation receipts of Christmas fundraiser income, among other issues.Cook also questioned board oversight and effectiveness and noted that “People want to make sure they’re not chasing good money after bad,” with donations.SPMH Board President and Santa Paula City Attorney Phil Romney defended the hospital and board, noting that “of course the board has been working very hard the last three years plus on a concentrated effort to develop a plan,” to meet financial challenges.Hospital physician relationships must be resolved, he noted, and “a healing process has to occur.”Romney noted that the Quorum contract is confidential, as the hospital is a private non-profit entity. “We are a private body and I don’t know anyone who will open their books to anyone who wants to look.” Payments for housing and vehicles stopped when the positions became permanent, he added.“We can’t send patients,” out of the river valley for emergency treatment, said Fillmore Fire Chief Pat Askren. “They’ll die in the back of the ambulance.”Askren, whose wife Carol, a nurse, has worked at SPMH for 28 years, noted that people who donate to the hospital “need to be assured that the money is spent to save the hospital. . .”Dr. Ernest Carlson discussed forming a hospital district and Don Olivier suggested an ad hoc committee be formed to study hospital issues.Gregson said Quorum receives $498,000 annually for “CEO and CFO salaries, wages and benefits and the total fee due to Quorum. . .a big number but at the same time in relation to a very big number we deliver value for that contract.”“I didn’t know the hospital existed until I was taken there,” by an ambulance, said Fillmore Councilwoman Patti Walker. “The public needs to be made aware with more outreach. . .”The councils agreed that more financial disclosure is necessary: “The hospital is needed but you have to lay everything out on the table,” said Fillmore Mayor Evaristo Barajas.“I’m very concerned that certain books are closed to inspection,” said Santa Paula Councilman Gabino Aguirre. “If those funds are going into a black hole, I want to know what’s in that black hole.”