ColusaRegional Medical Center announced they would be closing their doors April 22.
“We regret to inform the community of our pending closure of the hospital; however, during the last three years, it has become increasingly more difficult for a small community hospital to survive financially,” said Wayne Allen, Chief Restructuring Officer and Interim Chief Executive Officer at CRMC.
Officials described a “perfect storm” of insurance reimbursement cuts and tougher regulations under, the Affordable Care Act, as the reason for this decision.
“Forty-eight rural hospitals have closed since the Act went into effect, and hundreds more are in danger of closing,” commented Gary Teragawa, CRMC’s Board President, “we will make forty-nine.”
The hospital is faced with $12.79 million in current and long-term liabilities and virtually no way to recoup costs and maintain financial viability.
“The closure is not because of bad management, but rather the reimbursements received from insurance companies and a decrease in payments for uninsured patients,” said Teragawa.
CRMC Vice President, Ray Krause reiterated Teragawa statement by commenting that the hospital is doing everything it can to find a solution for health care in Colusa County.
“There is no need to burden the question of who’s responsible and why. Ultimately it is how the hospital is reimbursed for its services,” said Krause, “we must move forward.”
Affordable Care Act to Blame
“Over 90 percent of our patients are either Medi-Cal or policyholders of Covered California. With this structure we receive anywhere between 27¢ to 37¢ on the dollar for reimbursements – a number so small, we can’t even cover our costs,” said Teragawa.
Teragawa added that it often takes 60 to 120 days or more for the hospital to receive funds from insurance companies, because of the time required to process the claims.
“It’s a complicated process, and often it takes several attempts before reimbursements are received,” said Teragawa.
Krause commented that with the Affordable Care Act many patients do not understand their deductibles and when they seek services at the hospital are ultimately unable to pay, leaving the hospital stuck with the bill.
Allen stated that insurance company reimbursement schedules and non-payments contributed to the hospital’s $4.8 million loss for the 2015 fiscal year.
Additionally, Teragawa commented that the hospital has spent hundreds of thousands of dollars in upgrades to meet the Affordable Care Act Standards.
“The only viable option is to close the doors and seek other opportunities; a rural hospital just can’t survive in these conditions,” said Teragawa
With the hospital’s closure looming, community members are in a frenzy over medical records, the possibility of losing doctors, and the uncertainty of medical services in Colusa County.
However, the effect of the hospital’s closure goes beyond medical services, said Colusa County Sheriff, Joe Garofalo.
“The closure of the hospital will have a tremendous impact on county and city police agencies,” said Sheriff Garofalo, “Officers will have to transport prisoners for D.U.I. Blood test cases, or incoming detainees in the need of treatment to neighboring hospitals. This inevitably would extend call times over an hour or more,” said Sheriff Garofalo.
Officials at CRMC stated that upon closure, all hospital services, including clinics, will be discontinued; an estimated 200 employees will be without jobs. Allen commented that the clinics in Arbuckle, Williams, and Colusa would close, including the Women’s Health Center, which opened in fall 2015.
The closure of the hospital will not affect the patients and services of North Valley Family Physicians as this is a separate entity.
Finding a solution
The hospital took action in January to reduce budgetary shortcomings when it suspended its maternity ward operation, thereby saving the organization over $1 million annually; however, after the Board of Directors hired Wayne Allen as the Chief Restructuring Officer in February, it was evident financial turmoil was imminent.
Walt Beck, then Chief Executive Officer of CRMC, retired from his position. Beck, who was scheduled to retire later in the year, made an early exit to allow Allen to assume CEO responsibilities to handle transactions efficiently.
“I believe that Beck did the best he could with the tools he had,” said Teragawa. “Ultimately, CRMC was never going to survive as an independent hospital – no matter what we did.”
Teragawa commented that for the county to have medical services, it would have to look at affiliating with a larger hospital.
With the doors closing on April 22, Allen commented that the organization will continue to bill and recover payments for the services it has rendered, and will continue to seek a solution.
“It is unacceptable to leave a community without healthcare, and I am doing everything I possibly can, to solve this problem,” said Allen.
“Enloe has stepped up to provide additional ambulance services for the area,” said Supervisor Marshall, “this will substantially help.”
Additionally, Supervisor Marshall commented that surrounding counties have been reaching out to help as well.
“Rideout Memorial Hospital has contacted us about providing assistance and services to the county so that we can have some kind medical care through this crisis,” said Supervisor Marshall.
Hospital Seeking Buyers
On Monday afternoon, Allen commented that the hospital is in continued talks with prospective buyers.
“I am enthusiastic for a new beginning for CRMC,” said Allen. “I am impressed by the amount of support and interest the community has with its health care; it’s encouraging.”
Allen added that some buyers and interested parties had approached the hospital with negotiations.
“We believe that access to quality healthcare in our community is vital and, therefore, the hospital’s management will continue its efforts during the next three to six months to seek potential buyers,” said Allen, “but I hope we will have a solution sooner.”
Teragawa commented that ultimately the face and form of the hospital will have to change, to continue providing services necessary to the community.
“Instead of having a full emergency room, we may have an urgent care facility where we triage, treat, or send the patient to the affiliated center,” said Teragawa.
County Supervisor John Loudon commented that the county was stepping in and determining its stake with the hospital closure. Several county officials including Supervisor Mark Marshall held a closed session meeting with hospital officials Friday afternoon, to discuss how the closure was to affect county public health services, and behavioral health services.
Community members have expressed concern over medical services and what is to come.
“The board is making every effort to reduce the effect of the closure and to find a solution quickly,” said Krause, “there have been some rumors that Dr. Gregory Burt is leaving; this is untrue. Dr. Burt has expressed his interests to remain in Colusa, and we are doing everything we can to make that happen.”
To keep the public informed, CRMC will be hosting a community meeting on Monday, April 11, 2016, at Friendship Hall, Colusa United Methodist Church, 511 Oak Street, starting at 5:30 PM. Allen commented that they would hold a repeat of the meeting on Monday, April 18, 2016, at the same location and time.
“We have established a plan for the transfer of the healthcare of our patients to other neighboring medical providers,” said Allen as he ensured the community that an orderly shutdown of the hospital will provide for continued patient care and safety.
The Williams Pioneer Review is committed to keeping our community informed and will continue reporting on this topic throughout the next several weeks.