Sonoma West MC (Palm Drive) and Us Taxpayers

It seems that Sonoma West Medical Center just can't stop being a magnet for those who would take advantage of klunky Medicare payment rules. First a questionable lab testing scheme and now "long term care".

An interesting piece from the New York Times on potential Medicare savings includes this lengthy segment:

“In the 1980s, Congress carved out a small group of hospitals from its normal rules for payment. These 'long-term care hospitals,' which treated patients with tuberculosis and chronic diseases, could earn far more money than traditional hospitals and nursing homes if they cared for patients who stayed with them for an average of 25 days. Since then, the number of these hospitals has mushroomed, from a few dozen to more than 400, most run by two for-profit chains.

"For years, analysts and policymakers have wondered about the value of these hospitals, which tend to treat very sick patients who need a lot of care, such as mechanical ventilation or dialysis. Several analyses have suggested that Medicare may be overpaying for their services." ...

"The new paper, from researchers at the Massachusetts Institute of Technology and the University of Chicago, took a close look at what happened to patients as new long-term care hospitals opened around the country in places that had none.

"The study, covering 1990 to 2014, found that when such a hospital opened, the odds increased that very sick patients leaving a normal hospital would end up going next to a long-term care hospital, generating a growing bill for both Medicare and the patients themselves. But the researchers found no benefit when it came to patients’ chances of dying or going home within 90 days.

"The researchers concluded that the health care system could probably save a lot of money — around $5 billion a year — by paying the long-term care hospitals the same prices that are paid to skilled nursing facilities, the places that most long-term patients end up in when there is no long-term care hospital nearby.”

The full piece is linked here: https://www.nytimes.com/2018/08/27/u...gtype=Homepage

There's gold in them there hospital rooms! But how long before the Feds wise up and change the rules?

So I have a question. I was not at the meeting where the decision was made to go this direction. I know one of the proposals was from Sonoma County Behavioral Health to have a mental health facility. Why was this not chosen? We are in desperate need of mental health services. Our county relies on hospitals in other counties or our county jail to treat our own people, or the jail. Why was this not chosen?

Jessica
www.daughterofthediviners

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Posted in reply to the post by luke32:

It seems that Sonoma West Medical Center just can't stop being a magnet for those who would take advantage of klunky Medicare payment rules. First a questionable lab testing scheme and now "long term care".

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Posted in reply to the post by jesswolfe:

So I have a question. I was not at the meeting where the decision was made to go this direction. I know one of the proposals was from Sonoma County Behavioral Health to have a mental health facility. Why was this not chosen? ...

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I reached out to Dan Smith for his comments about this:

From Dan Smith:

There are a few issues here:

1) The building is not well designed for mental health patients and would be very expensive to remodel.
It would be much more cost effective to start with a different building.
The county does not have the budget to make this work.

2) Mixing acute and mental health patients is not good for either one.
(Mental health patients would be exposed to hospital diseases and acute patients would be exposed to the mentally ill.)

3) Dr. Singh has agreed to look for another location for mental health patients.

There is a big need for this and the county has been very lax in addressing it.

Dan

With an election coming up, and three candidates for two seats on the Palm Drive Health Care District Board, it seems this might be the time to segue into a discussion, perhaps even a forum, where we might get the three candidates to address issues (I know Dan Smith checks in on WACCO; perhaps we could get Dennis Colthurst and Richard Power to join in).

The principal issue that I see is the apparent conflict between the purpose for which the PDHCD was established and the services which will be provided by the new long term acute care hospital run by AAMG. As the LAFCO report of October 2016 on the PDHCD pointed out, "Although California Health and Safety Code Sections .... authorize health care districts to provide a wide variety of services, the District is only authorized to provide “emergency, acute care and other medical services.” I believe one would need to stretch this authorization to include long term acute care "with an urgent care facility".

So the question becomes, for me, should the tax receipts currently earmarked for the PDHCD be used in any way to support AAMG? What are the candidates views on this issue?

Another issue, of course, is the priority given by the PDHCD to resolving the bankruptcy. I do not have an idea as to the size of the PDHCD liability or the plans to resolve it

Perhaps other WACCO readers can address the issues more comprehensively. But this is a start.

From:
https://www.northbaybusinessjournal.com/northbay/sonomacounty/8728956-181/sonoma-west-medical-center-tax

(September 11, 2018)

A group of Bodega Bay residents took the first step to remove area properties from the tax district supporting the financially struggling Sonoma West Medical Center.

The group last week officially notified the county of its intent to circulate a voter petition supporting the detachment of several hundred properties from the Palm Drive Health Care District, which levies an annual tax of $155 per parcel.

“It’s a fabulous facility, but I think it’s past its time with the medical arena that we have now,” said Liz Martin, one of up to eight Bodega Bay residents pushing the detachment effort.

Martin said the medical center has been poorly managed for years and simply can’t compete with Sonoma County’s largest health care providers, Kaiser Permanente, Sutter Health and St. Joseph Health.

She said the Palm Drive health district’s newest plan to have Modesto-based American Advanced Management Group operate the Sonoma medical center would result in the elimination of the emergency medical department. That would run counter to the reason the hospital district was formed in the first place, ...

From Dan Smith:

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These are thoughtful questions that deserve a thoughtful response so here goes:

1. AAMG is a for-profit entity and it would not be legal for the district to use tax revenue to support AAMG in any way.
2. Once AAMG fully takes over operations it will need to either lease the property or buy it from the district.(The law requires that this be at fair market value though this may be determined by what anyone is ready to pay.)
3. Any revenue derived from this will become the district’s.
   (My position is that these funds and any excess tax dollars should be used to pay down district debt, not fund new services.)
4. Leasing or selling the hospital will require a vote of the members of the district.
   (This is likely to happen in April of 2019.)
5. My personal position is that at that point, the district should be dissolved.
   (Tax revenue would go to debt repayment and be managed by the county.)

I see no reason to continue the overhead and expense of the district if it is not running a hospital.
(While there are some who want to see the district continue and give money to local entities, as a founder of the district, I am very clear that it’s purpose was to maintain our hospital, end of story.)

While there has been a lot of controversy around the hospital for along time, I would make the point that we kept emergency and other services for 18 years and during that time, many lives were saved and many were able to get care close to home. The hospital is now transitioning to another model of care that is also well needed in this area though it will not include an emergency room, unfortunately.

From that aspect, we have achieved an important and very difficult transition though with some loss. Some will argue that is was an overly costly process and none would agree more than I when I think of the many millions of dollars my lovely wife dedicated to the hospital (Yow). We have no regrets because every life that was saved was worth every bit of it and our inability to continue as a community owned hospital is really an indictment of our crazy healthcare system, not of our personal failures.

Could we have done better, of course, but the outcome would be the same; medicine has become the property of the corporations, the drug companies and the insurers and the independent physician and their local hospital are becoming extinct as we speak. I am running for the board because, having created the district, I feel an obligation to close it. This will surprise many who know that I fought hard to keep the hospital going and dedicated years of time and millions of dollars to this cause, but there really is no other choice now.

I am very pleased that AAMG has brought their expertise, money and people to utilize the hospital in a new way instead of letting all the work that went into it over the past 4years go to waste. In the long run, this will benefit the taxpayers, provide important jobs and revenue to the community and allow patients who need long term care from Memorial, Sutter, Kaiser and hospitals to the north stay in our community. So I say, ‘Welcome Sonoma Specialty Hospital !!'

Dan

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Posted in reply to the post by luke32:

With an election coming up, and three candidates for two seats on the Palm Drive Health Care District Board, it seems this might be the time to segue into a discussion, perhaps even a forum, where we might get the three candidates to address issues (I know Dan Smith checks in on WACCO; perhaps we could get Dennis Colthurst and Richard Power to join in).

The principal issue that I see is the apparent conflict between the purpose for which the PDHCD was established and the services which will be provided by the new long term acute care hospital run by AAMG. As the LAFCO report of October 2016 on the PDHCD pointed out, "Although California Health and Safety Code Sections .... authorize health care districts to provide a wide variety of services, the District is only authorized to provide “emergency, acute care and other medical services.” I believe one would need to stretch this authorization to include long term acute care "with an urgent care facility".

So the question becomes, for me, should the tax receipts currently earmarked for the PDHCD be used in any way to support AAMG? What are the candidates views on this issue?

Another issue, of course, is the priority given by the PDHCD to resolving the bankruptcy. I do not have an idea as to the size of the PDHCD liability or the plans to resolve it

Perhaps other WACCO readers can address the issues more comprehensively. But this is a start.

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If there is no emergency room. I would like to see the building leased or sold with the proceeds going to pay past employees in full. Then any balance to suppliers. If there was anything left to bond holders, in that order. I realize bond holders will take a hit but that is the risk you take when you buy any type of stocks or bonds.

The idea that the health care district would continue providing minimal services while most of the tax money went to bond holders for the next 15 or 20 years is not palatable to me. When you purchased a high interest rate bond you took a chance. Now you got to take the hit.

Did the Palm Drive Hospital ER have the capability to perform emergency cardiac catheterization?

https://www.nhlbi.nih.gov/health-top...atheterization

Most people who have heart attacks have narrow or blocked coronary arteries. Thus, cardiac catheterization might be used as an emergency procedure to treat a heart attack.

Chapter 7 Voluntary Petition for Non-Individuals. Fee Amount $335. Filed by Sonoma West Medical Center. Incomplete Filings due by 10/10/2018. Order Meeting of Creditors due by 10/10/2018. (Provencher, Douglas)

https://www.pacermonitor.com/public/...Medical_Center


Dan Smith, chairman of the board for SWMC, Inc., said now that SWMC, Inc. is done with its responsibility to the hospital, the most responsible thing to do next is turn nonexempt assets into cash.

“The easy and best way for us to do that is liquidate,” Smith said. “Everybody gets treated fairly.”

The decision to file comes at a critical time for SWMC, Inc. as it faces a multi-million dollar lawsuit by Anthem Blue Cross/Blue Shield. According to the United States Courts, Chapter 7 of the Bankruptcy Code provides for “liquidation” — the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.

The court can determine what property is exempt.

Filing a petition under Chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property.

Smith said filing Chapter 7 basically nullifies the lawsuit. “There is nobody to sue,” he said.

https://www.sonomawest.com/sonoma_we...24919a49f.html

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Posted in reply to the post by luke32:

It seems that Sonoma West Medical Center just can't stop being a magnet for those who would take advantage of klunky Medicare payment rules. First a questionable lab testing scheme and now "long term care"...

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...the only issue is the hospital actually getting paid. It takes them six months or longer to bill the patient/insurance/et. al. for services.