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Home My WebLink AboutMINUTES - 09281993 - S.1 S. I TO: BOARD OF SUPERVISORS Sunne Wright McPeak Contra FROM: a Tom Powers Costa Cost Members of the Hospital Joint Conference Committee l.�l.Jur DATE: September 23, 1993 for Action on September 28, 1993 ty SUBJECT: Purchase of Excess Capacity in Community Hospitals SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION: Direct and authorize the Health Services Director in consultation with the County Administrator's Office to negotiate for purchase of excess portions of community hospital facilities and report back to the Board of Supervisors within 60 days. Further, direct the Health Services Department to inform the public about the history of development of the Contra Costa County health system and negotiations with community and district hospitals during the last 15 years. Also, request the HSD to analyze the Clinton health care reform plan and propose additional recommendations for structuring a health care system that best prepares Contra Costa for the future. BACKGROUND:. The release of President Clinton's health reform plan on September 22, 1993, is focusing more debate than ever before in this country on reforming the health and medical system. This national discussion holds the potential for great change. However, one thing is very clear: medical care cost containment in the future will be based upon competition among organized systems of health care. The Contra Costa Health Plan, a staff model HMO and the first publicly-sponsored, federally- qualified HMO in the nation, is often cited as a model for the future comprehensive organized health care system. During the past 15 years, Contra Costa County has pursued the development of a comprehensive health care system that emphasizes prevention and has the most extensive network of outpatient clinic sites of any HMO in the county. In contrast, during that same time period, community and district hospitals, except those owned and operated by the Kaiser Health Plan, have pursued a course of overbuilding and development of excess capacity. Now they have empty beds and are in financial peril. This is particularly true of the p(yblic-district hospitals. Also during the last 15 years, Contra Costa County has repeatedly attempted to establish working partnerships with community hospitals and to negotiate an arrangement with public district hospitals to acquire excess hospital beds at a cost no greater to taxpayers than it would cost the county to replace and operate its own facility. The district and community hospitals repeatedly declined to participate in such an arrangement. In fact, the Board of Supervisors engaged in CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON 5 9 F3 APPROVED AS RECOMMENDED _ OTHER Phyllis Roff, Walnut Creek citizen, spoke in favor of the recommendation. Dr. George Degnan, former Coutny Health Services Director, urged immediate decentralization of health care and use of existing beds in district hospitals owned by the taxpayers. Henry Clarke commented and suggested consolidating all 3 district hospitals with County VOTE OF SUPERVISORS Hospital governed by one health department responsible to this Board. UNANIMOUS (ABSENT � ) I HEREBY CERTIFY THAT THIS IS A TRUE AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON ThiE DATE SHOWN. CC: Health Services Dorector ATTESTED cl 93 County Administrator Phil Batchelor,Cled of the Board of Supervisors and County Administrator M382/7-e3 , BY 6 DEPUTY Purchase of Excess Capacity in Community Hospitals Page Two an intense set of discussions with both West County (Brookside) Hospital District, Los Medanos Hospital District, and the Veterans Administration in 1992 before being forced to act on replacement of the county hospital in order to take advantage of state and federal financing for public hospitals. There was no more time left to wait to see if someday the community hospitals would want to work together. Although no hospital was able to propose a specific proposal, the Board of Supervisors authorized "Series B" for bond financing to pursue joint ventures in the future with Brookside and Los Medanos hospitals that would ensure broad geographic access. Now that health care reform is on the horizon and the financial picture for hospitals that are not a part of a comprehensive system is very precarious, there may be a new interest on the part of district and community hospitals to work together. Therefore, we should move to take advantage of this opportunity. However, in order to continue to successfully manage the Contra Costa Health Plan, the county must be able to control hospital utilization and costs. The most certain way to do that is to purchase portions of the existing facilities to acquire the excess capacity. This provides certainty for the Contra Costa Health Plan and absorbs the unused beds in community hospitals. Although current regulations on state and federal reimbursement for public hospitals apply only to replacement of facilities, there may be changes in the future that will allow this financing mechanism to be used for acquisition. We should negotiate now to be in the best position possible if the law changes. BROOKSIDE _DIRECTORS: MINOT TRIPP CHAIR HOSPITAL KEVIN GERAGHTY.MO v'00 CRAM JANE SEAM WOOD TR4ASNAQM MICHAEL R LAWSON BE TTYE J.CASH SHGPHTAA` P,fE81DEN'f s GHCR IXiCUTrvi OR1hCEIR VERNON T.ARCHIBALD.MO AE&7STANT SECRHTARv � V •BCE N September 27, 1993 - LL Honorable Tont Torlakson 1993 Chair, Board of Supervisors F suPEFNISORS 551 Pine Street CI.�RKBG� D° TA Martinez CA 94553 ,o ��' Dear Supervisor Torlakson: Brookside hospital commends Supervisors Powers and McPeak for their proposal to widen the scope of potential solutions to the issue of hospital beds in contra Costa County, Their recommendation shows a willingness to establish a greater level of collaboration between the County and district hospitals than has ever existed. With this recommendation before us, I propose the Supervisors and their staff remain open to the numerous ways this collaboration may be achieved. We understand that the County requires solid guarantees that beds will be available for its patients. I believe we can secure those guarantees and secure theta without the need to spend taxpayers, dollars for beds that already exist. We are prepared to seek a mechanism that will assure the County that those beds will always be available. Brookside Hospital and its physicians are committed to serving the people of west County, including the patients who have traditionally been served through the County system. As Supervisors Powers and McPeak point out, this is a new day in healthcare. It is a day requiring new thinking, greater cooperation by providers and a system-wide regional approach to healthcare planning. We are prepared to discuss any possible approach to dealing with the need for hospital beds in this County. To that and, we ask that County staff be directed to explore a variety of mechanisms and not solely the purchase of excess bed capacity. Sincerel MICHAEL P. LAWSON, FACHE President/Chief Executive Officer Cc: Board of Directors Assemblyman Tom Bates Senator Nicholas Petris West County Mayors Group WEST CONTRA COSTA HOSPITAL DISTRICT - 200{} VALE ROAD • SAV PABLO, CALIFORNIA 94806 • (510123S.7000