Executives Search for Glimmer of Hope

As the healthcare system limps into 2005, Valley health professionals are simultaneously fighting to get government help to improve access to care and desperately shoring up hospitals for another year of skyrocketing costs. As Carole Gallien starts her year as co-chair of the Valley Industry and Commerce Association’s healthcare committee, she and other members are starting off the year by working with state representatives in extending insurance options for those going without. “We are working very closely with Assemblyman Richman,” Gallien said. “He just did a tour through California in different locations trying to gather up ideas.” “We are going to meet with him in the latter part of January to start our focus on health care coverage,” she said. Gallien said the committee wants to “change the system so that more people have access, and that (healthcare) is more affordable.” She said that the uninsured population remains one of the biggest problems for the healthcare infrastructure, in particular hospitals that see emergency rooms flooded with uninsured patients. She said that every year it gets more difficult for hospitals to post a profit. David Levinsohn, CEO of Sherman Oaks Hospital said that even when dealing with patients who carry insurance, hospitals stand a good chance of losing money. He said that reimbursement from both public and private insurance policies is at best failing to keep pace with rising expenses, and at worst, shrinking. “We are the one industry that, everybody who buys from us tells us what they’re going to pay us,” Levinsohn said. “It’s hard to tell somebody driving past and seeing this enormous edifice and seeing cars driving in and out of it, that this organization is not making much more as they think.” Medicare rates, for example, are increasing at a rate well below the national average, a trend that Levinsohn sees likely to continue given the state budget crisis. But extraordinarily tight budgets are the norm for California hospitals, he said. The situation, he said, is not helped by nurse staffing ratios or state mandated seismic retrofitting requirements. The nurse ratios, Levinsohn said, are forcing hospitals to pay high rates to traveling nurses. Even when they do that, Levinsohn said, there simply are not enough nurses in the state to comply with the ratios. In November, Governor Schwarzenegger supported a delay in the tightening of nurse ratios. In January, the number of nurses serving surgical wards was set to increase from six to five nurses for every patient. The move drew a lawsuit from the California Nurses Association, who said the law was designed to prevent hospitals from basing staffing levels on financial situations. The California Healthcare Association said the decision was justified considering the lack of nurses. Seismic solutions There is currently no assistance in sight for seismic requirements costing hospitals millions of dollars each to meet, Gallien said, although finding a solution to those costs is another of the committee’s priorities. Gallien said she does not expect any more Valley hospitals to close next year despite a bleak financial outlook. “I don’t think we have to worry about that in the San Fernando Valley,” she said. “There has been no scuttlebutt around.” Tenet Healthcare Corporation has put Encino Tarzana Medical Center up for sale along with several other hospitals, but CEO Dale Surowitz said that still, “the future looks bright.” Surowitz said that Tenet’s problems do not affect the quality of the hospital, which in October received scores among the highest in the nation for full-service hospitals from HealthGrades. Surowitz said that Tenet has already turned down offers from companies that want to buy the hospital, and that the parent company is looking for the company that would best run the hospital before selling it. “We’ve had four percent more admissions than we did the prior year, and we’re looking forward to a new owner that has additional capacity to invest,” said Surowitz. Surowitz said the hospital is preparing to unveil a number of new programs in the coming year, and that a new owner will also likely be announced in the early part of the year. Still, Levinsohn said that even if hospitals don’t close their doors, the quality of patient care can still decline. Surowtiz said that Encino Tarzana, like all California hospitals, is having a difficult time filling nursing positions. He said that until colleges and universities start to produce more nurses, there’s no relief in sight. Surowitz said that increasing pressure from managed care companies to either reduce rates or keep them steady is counterintuitive when dealing with the rising costs of new technologies. “In the long term, we won’t be able to afford to keep up with technology,” Levinsohn said. “Something’s going to suffer.” “Nobody’s going to invest millions of dollars in a piece of equipment if the compensation doesn’t give a reasonable return,” he said. “To maintain the level of care that’s supposed to be provided, the money has to come from somewhere.”