Fears of a third bankruptcy or another closure of the original Palm Drive Hospital were heightened last week after the current Sonoma West Medical Center (SWMC) operators resorted to asking the already-bankrupt Palm Drive Health Care District (PDHCD) to help cover their payroll and other immediate expenses.
Although very deep in debt from two previous bankruptcies the district was able to help SWMC because west county taxpayers had just paid $2 million in parcel taxes in December.
After reopening the hospital on Oct. 30, patient use has been steady but billings and revenues have been lagging far behind business expenses that top $2 million a month.
With the help of a PDHCD equipment payment of $600,000 and another $400,000 in a new loan, a Feb. 4 payroll of $544,475 was paid to a hospital staff that totals just under 100 people. Another $555,364 payroll must be paid on Feb. 18.
Most recent public comments, including a petition from a new group called Friends of Sonoma West Medical Center are focused on preserving the “life saving” emergency room. “Locals feel safer and are relieved that they no longer have to face long hours of waiting in Santa Rosa hospitals,” the Friends petition reads.
Since opening Oct. 30, there have been 1,617 emergency room visits, leading to a total of 536 actual medical cases. Of that total, 201 were defined as “high level” or “severe” cases with the remaining cases filed as less urgent cases, according to a report from CFO Doug Goldfarb. There have been eight ambulance visits to the reopened emergency room during the same time period, Goldfarb said, adding no tracking is kept on how other patients arrive.
Ray Hino, CEO for the reopened hospital told a public meeting two weeks ago there has been 2,961 patient visits since Oct. 30, including 211 admissions and 83 surgeries.
Hino related that local cardiologist Dr. Thomas Cunningham told him, “in its last 10 years before closing, Palm Drive was never as busy as Sonoma West Medical Center is today.”
Forecasting continuing business levels, Hino said the SWMC hospital “will have built up $1.7 million in cash” by the month of May. His calculations are based on a “realistic” average of 15 patients per day, 60 outpatient surgeries per month and 20 patients per day in the emergency room.
Alanna Brogan, executive director for the PDHCD that is extending the loans for the hospital called Hino’s predictions “very conservative and look correct.”
To open the money spigot at the hospital, federal Medicare reimbursements and private insurance payments need to happen.
The reopened hospital was re-accredited by the federal Center for Medicare Services (CMS) on Dec. 7 and a new billing number was finally transmitted to Hino last week.
After another 21 days of review by the Medicare payment clearing house service Noridian, as much as $4.5 million in net accounts receivable, retroactive to Dec. 7 cases, are anticipated.
“Once this happens, Medicare is actually a pretty prompt payor,” said Hino.
New reimbursement contracts with major insurance carriers are now taking place, Hino also reported. These include Anthem Blue Cross, Blue Shield, United Healthcare, Aetna, Healthnet and Cigna. CFO Doug Goldfarb said a few contracts may be in place in February, with other negotiations continuing through March.
Private insurance contracts ae very important to a hospital because they set limits on the amount of payments that can be 30 percent and lower than actual gross billings. Too low reimbursements often have been cited as part of the former Palm Drive Hospital’s failure and bankruptcy.
Prior to the closing of Palm Drive Hospital in April 2014, the Sebastopol and larger region of western Sonoma County relied on the acute care hospital for disaster response and as a central resource for overall emergency medical response by local law enforcement and fire departments.
Hospital supporters also point out the emergency room serves as a vital resource for the local elderly population who have limited transportation options.
In 2013, the Palm Drive Hospital’s emergency department lost $1.3 million, according to state hospital reports. The emergency room saw 7,035 visits with 945 classified as “severe/life threatening.”
In partial response to the 2014 closing of the emergency room, the PDHCD last year funded $20,000 to support Bodega Bay EMT services and other emergency response training in the district.
A new physicians group took over the emergency room duties on Feb. 1, replacing a former group led by Dr. Rodney Look. After paying Dr. Looks group almost $1 million, including $477,000 before the hospital reopened late last year, Hino said the new group’s contract will save the hospital expenses.
The Sonoma West Medical Center board of directors next meets on Monday. Feb. 15 and the Governing Board of the hospital meets in public session on Monday, Feb. 22.
Both meetings are in the hospital’s conference room at 501 Petaluma Ave.