CEO: Sutter Coast Hospital losing money
Written by Adam Spencer Wescom News Service   
May 31, 2013 10:22 pm

CRESCENT CITY — The interim CEO of Sutter Coast Hospital updated Del Norte County supervisors Tuesday regarding what might be expected for the future of the hospital that serves Curry and Del Norte county residents.

The new top executive, Linda Horn, explained the impact Sutter Coast can expect from planned cuts to Medicare over the next 10 years because of health-care reform, using figures provided to Sutter Coast by the California Hospital Association.

“The impact from the Affordable Care Act is $16.5 million over the next 10 years,” Horn said, adding that, in terms of operating income, the hospital lost $3.1 million in 2011 and $3.8 million in 2012. Looking at the first quarter of 2013, the hospital is poised to have an even higher loss this year, Horn said.

“Given a $16.5 million hit from the federal government and our already existing deficits, how do we do long-term planning?” said Horn.

One way to start long-term planning is to hire a consultant to conduct a “strategic options study” that will analyze the advantages and disadvantages of all possible options for Crescent City’s hospital, which is exactly what Sutter Coast is doing. The Camden Group was chosen last week to conduct that study, and Horn invited the supervisors to participate in a 15- to 18-member community group that will participate in the study.

“This is our hospital and it’s our time to plan for the future. And it’s really important that we get involvement,” Horn said.

 She added, “We have a sincere desire to get objective data. We all know we can only make good decisions if we have objective data.”

Some supervisors thanked Horn for providing hospital data prior to Tuesday’s meeting, including a list of “historical facts” of Sutter’s involvement in Del Norte County and hospital census data from the past four years showing a steady drop in business at the hospital for most services offered.

Some supervisors asked that financial information and hospital Board of Directors meeting minutes be released to the public for more transparency and to bury any suspicion.

Supervisor Martha McClure pointed out that the hospital is not required to share its meeting minutes but that the release of such data could be negotiated through the study’s community group, saying that’s one reason the Board of Supervisors should be at the table. McClure was recently poised to be on a panel of community members choosing the study consultant, but other supervisors pressured her not to take the position out of concerns that the study will be biased since Sutter Health will fund it.

Gitlin reiterated that concern Tuesday saying, “a blind man could see the results are almost predictable.”

Horn acknowledged the two alternatives for the future that have caused fear in the community: “regionalization,” a shift away from local ownership and governance of the hospital, and downsizing to a Critical Access hospital, a federal designation for small hospitals that provides higher Medicare reimbursement.

“Regionalization has indefinitely been postponed; Critical Access is not being discussed,” Horn said.

Sutter Coast Chief of Medical Staff Greg Duncan noted during the public comment part of the meeting that these options will still be evaluated by the study and the hospital Board has not rescinded its vote to regionalize despite the medical staff’s request it do so. In the court of appeals, Sutter Coast also continues to fight an injunction preventing the hospital from regionalization or critical access, Duncan said.

He said that several Sutter executives made “false or misleading statements regarding regionalization to the Board of Sutter Coast Hospital.”

“Given what we know of Sutter Health, can we trust them to coordinate the study?” Duncan said.

Other county supervisors also reminded Horn of the community response to the regionalization effort, “community blowback,” as Supervisor Roger Gitlin put it.

“I don’t think the past CEO did a great job of communicating with the public. I think there’s a trust factor right now and the community feels burned,” said Supervisor Mike Sullivan.

McClure lamented the community division that has been fostered by the regionalization issue and encouraged citizens to “go with a voice of discussion rather than a fight.”  

“I know it’s a giant corporation and sometimes giant corporations stumble,” McClure said. “I think that maybe Sutter did a little bit of stumble in their discussion and was not quite as public as they needed to be, but I really believe we are on the precipice of being able to reopen this discussion within our community and let the anger be pushed aside; let’s sit down and talk about our true options.”

In regards to Critical Access downsizing, Horn said, “We’ve taken a big step back. We now want to do the honest, complete due diligence to see what’s absolutely best. I’ll take us back to part of why we’re here to begin with, the federal government is going to radically change how it reimburses health care. That will have a profound impact on rural health care.”

McClure said that the county could be working with Sutter to develop legislation for rural hospitals under the Affordable Care Act, but “as long as it’s a cross-chest refusal to be at the table it will not assist us in finding a solution.”

During public comment, Horn received shining praise from several hospital employees who said she had made a great impact after only being here one month. The employees also urged the supervisors to be involved on the study’s steering committee.

The employees’ support for Horn and the study was a shift from the usual public tone regarding hospital issues as the vocal opposition cultivated by the hospital’s medical staff, including Duncan, usually dominates public hospital-related events. Several people still voiced concerns over regionalization, and more applause was always given in the county chambers for anti-Sutter sentiment.

“I have one goal and that’s to help this community decide what its future should be,” Horn said.  “I have no hidden agenda.”