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June 16, 2004

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Publication Date: Wednesday, June 16, 2004

County challenged by health care County challenged by health care (June 16, 2004)

It may not be obvious to many Midpeninsula residents, but San Mateo County is providing health care to virtually every indigent patient who finds his or her way to the hospital, and the numbers are growing rapidly. Most often -- in fact in 95 percent of the cases -- that hospital is the county's own, the recently rebuilt facility at 222 West 39th Ave. in San Mateo.

The hospital, renamed San Mateo Medical Center when it was rebuilt several years ago, is the major piece in the county's health-care delivery system, which also includes numerous clinics. Two of the clinics can be found in Menlo Park -- at the VA complex on Willow Road and in Belle Haven. The largest populations cared for by the hospital and clinics are Medi-Cal patients and the indigent -- many of whom are among the "working poor" who can't afford to buy health insurance.

To operate the hospital alone costs in the neighborhood of $163 million a year, of which about $55 million comes out of county coffers. And with an estimated 5 percent increase in outpatient clinic visits (to 203,000) this fiscal year and a similar jump (up 5 percent to 33,500) in emergency room visits, costs are expected to rise even more. Due to this and other factors, the county has been forced to dip into reserves to balance the hospital's budget, an exercise that concerned supervisors say may fill the gap this coming fiscal year, but not in future years.

There are some good reasons for the deficit, including a quirk in a state policy that denies about $7 million to $9 million in federal funding to the hospital. Payments from this federal fund are made routinely to similar hospitals in the state that provide a disproportionate share of health care to Medi-Cal patients, as does the county hospital. But because the county actually developed a better way to deliver Medi-Cal care to its patients -- the San Mateo Health Plan of San Mateo -- it is ineligible for the federal funding that every other public hospital in the state receives. County officials are working hard to correct this unfair policy, which has a huge, negative impact on the hospital's financial performance.

Couple this serious funding shortfall with the additional $2 million to $3 million the county is spending this year for temporary nurses to fill gaps caused by one of the worst nursing shortages in memory, and the hospital's financial problems come into focus.

The seriousness of the funding shortage led supervisors Jerry Hill and Rich Gordon to warn recently that the county might have to get out of the hospital business, perhaps by leasing the facility to a third party and simply paying for indigent care. But hospital and county officials are not fond of that plan, believing that the county and the patients are much better off if the county owns the hospital.

But it's not only the patients who benefit from the public hospital and its approach to health care. Many of the "working poor" and otherwise uninsured are part of communities at high risk of communicable diseases, such as tuberculosis. All county hospital patients are screened for infectious diseases, and the hospital works with the public health department to control the spread of those diseases, according to Dr. Sang-Ick Chang, a medical director at the hospital. "Providing medical care for them is a safeguard for the whole community," Dr. Chang notes.

Another key factor that contributes substantially to the hospital's funding woes was raised during recent hearings of the county's hospital task force chaired by Supervisor Hill, who told managers of the Palo Alto Medical Foundation and Sequoia Hospital that they were not providing enough care to indigents. Comparing the county's record of taking in 95 percent of hospitalized indigent patients with the 78 percent at San Francisco General, Mr. Hill said he thinks other hospitals in the county can provide more in this area.

Given the financial pressure facing the county's hospital, we believe it makes sense for Sequoia Hospital and the new San Carlos hospital to be built by the Palo Alto Medical Foundation, as well as others in the north county, to open their doors to more indigent patients. As Mr. Hill said, these hospitals do not pay taxes. "When you are a nonprofit, you need to do more. If you want to move into this community, you have to provide charity care in this community. If you want to play in this community, you have to pay in this community," he said.

Hospital managers for Sequoia and Palo Alto Medical said they are willing to work with the county on the issue, and Mr. Hill wants to set up a mechanism to create a strategic plan for hospitals to provide indigent care.

It is a good start, and a necessary one if the county's hospital is to survive. Otherwise, if the financing shortfall continues, the county could feel compelled to lease its hospital to a third party, a move that historically has caused the cost of care to rise and the quality of care to plunge. Such an outcome wouldn't be healthy for the hospitals or the patients.


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